P.O. BOX 2120




November 30, 2001





Division Superintendents



Jo Lynne DeMary

Superintendent of Public Instruction



Composite Index of Local Ability-to-Pay for the 2002-2004 Biennium


The purpose of this memorandum is to provide you with information regarding the Composite Index of Local Ability-to-Pay for the 2002-2004 biennium. The 2002-2004 composite index was calculated using 1999 base-year data provided by the Department of Taxation (adjusted gross income, taxable retail sales, and true value of real property), the Weldon Cooper Center for Public Service at the University of Virginia (1999 population estimates), and the Department of Education (March 31, 2000, average daily membership).


The Department of Education will use this composite index in calculating the state share of applicable school division entitlements for the Governors budget for the 2002-2004 biennium. Information on the amount of these entitlements will be made available to you in late December following the release of the Governors 2002-2004 introduced budget.


Attachment A to this memorandum includes the index calculated using the total Adjusted Gross Income (AGI) for each locality.


Attachment B portrays an alternative composite index for those localities in which 3 percent or more of their total AGI is derived from individuals who are not residents of Virginia. The alternative index in Attachment B excludes non-resident AGI from the composite index calculation. As provided in the appropriation act, school divisions whose total Virginia AGI consists of at least 3 percent or more from nonresident income may elect to exclude such nonresident income from the computation of the composite index.


Each school division that elects this option must have certified its intention to do so to the Department of Education on or before January 1, 2002. Attachment C contains the certification form that is to be completed and returned to the Department of Education in order to elect the nonresident AGI exclusion option. Only those school divisions listed in Attachment B meet the 3 percent or greater nonresident AGI requirement and are eligible to submit Attachment C.


Attachment D provides an example calculation of the 2002-2004 composite index.


Downloadable Excel and PDF files containing the 2002-2004 composite index for each school division are available on the Department of Education website at:


If you have questions or need additional information concerning this data, please contact the budget office at (804) 225-2025 or by e-mail (addresses available at