The LCI hurdle
One of the biggest budget hurdles that Rappahannock County Public Schools (RCPS) faces is its Local Composite Index (LCI). That’s the complex formula used by Virginia to determine how much funding each county receives from the state to pay for public education.
Each county’s LCI is based on the following three factors, each given a di erent weight:
► The true value of real property (50%)
► Adjusted gross income of county residents (40%)
► Taxable retail sales (10%)
It also takes into account what’s known as Average Daily Membership (ADM), which is comparable to enrollment, although it doesn’t reflect all the students a school district is responsible for educating. In the past seven years, RCPS’s ADM has dropped from 869 to 715.
While RCPS’ declining student population results in lower state support, the county’s high property values and average income level drive its LCI up to .80, which means the county is expected to pick up almost 80% of the school district’s budget. That’s near the top of the state’s rankings, up with wealthy and highly commercialized counties such as Fairfax and Arlington.
The catch, however, is that what the county collects in property taxes is considerably lower than the “true value” of its real estate. Close to a third of the county is taxed at a lower rate because it’s under conservation easement or is in a land-use program. In short, the LCI overestimates the county’s revenue from real estate taxes.
As for the adjusted gross income component, that’s skewed by the fact that much of the income goes to a relatively small number of county residents .According to data from the Economic Policy Institute, the di erence between what the top 1% of county residents earn and what the bottom 99% earn is among the highest in the country.