State error causes problem for Lunenburg, other school districts

VICTORIA – On January 1st, Virginia abolished its food tax. There was only one problem. This tax had provided millions of dollars to fund school districts across the state, including Lunenburg County. Notably, the current two-year state budget earmarked $201 million, money that was to be used from the food tax to fund schools. Districts planned their share of that money in the back of their minds, expecting it to come because no one had told them otherwise.

That’s why the superintendents were surprised last Friday when they all received a letter from the Virginia Department of Education. It explained that there had been a mistake and now, more than three quarters of the current school year, counties would not receive all promised government funding for this year or next.

It’s making a difference, local superintendents say, because budgets are already tight.

“Any reduction in funding for an organization can have an impact,” said Dr. Chip Jones. He serves as Superintendent for Cumberland County Public Schools. “[It matters] especially when trying to hire and retain staff, maintain student and staff opportunities, and cope with the rising cost of goods and services.”

How much will Lüneburg and others lose?

According to Virginia Department of Education communications director Charles Pyle, Lunenburg County Public Schools will lose $92,000 this year as a result of the bug, with another $288,000 lost in fiscal 2024. We are in the 2023 financial year, so this refers to the current school year.

The news isn’t much better for the districts around here. Prince Edward County is expected to move $131,000 this school year, with another $325,000 lost when classes start up again in the fall. Cumberland County is losing $76,000 in state funding this year and $187,000 next year.

The news isn’t good for Buckingham County either. Originally, the school district expected to lose a total of $200,000. Now, Pyle says they’ll lose $116,000 this year and $287,000 in fiscal 2024. Nearby Charlotte County will lose $106,000 this current fiscal year and another $263,000 next year.

How did it happen?

The biggest question is how did this happen? It comes down to two errors. First, from the end of Governor Ralph Northam’s term until the beginning of Governor Youngkin’s term, there were efforts to eliminate the state food tax. That finally happened last year, remotely as part of the budget negotiations. This is where the problem comes in. Several members of the assembly had said the schools would be “kept harmless,” meaning the state would find another source to give them the $201 million over two years it took away. However, this promise never ended up on paper. In the final budget signed in June 2022, there was no alternative source for this funding.

And so the state had $201 million less than before to give to schools. But the Ministry of Education also made a calculation error. Each year they give districts a budget tool, a mathematical formula that district officials use to determine how much each district would receive from the state over the next two years. The department didn’t account for the $201 million loss, so their tool reported incorrect numbers.

The districts then used this false information to budget, plan, pay salaries, and make repairs.

Virginia Department of Education communications director Charles Pyle said it was just a simple human error.

“We discovered the bug in the tool just last week,” Pyle said. “We briefed staff on Wednesday on both House appropriations and Senate finances.”

That was last Wednesday, January 25, and school district leaders received an email two days later about the situation.

A rock and a hard place

Now the counties know there will be a shortage. However, the state cannot yet say exactly how much it will be. And it could be a few days, if not weeks, before that changes.

So how do you fix such a problem? Virginia State Superintendent Jillian Balow has promised that each district will receive an updated estimate later in February once the Virginia House and Senate approve a budget revision. But first the state legislators have to agree. Sometimes that’s a one-day agreed vote. Other years it took days to negotiate an agreement in the congregation. At the moment, the Department of Education is telling districts to expect updated numbers by February 9th.

And yes, Virginia currently has a $3.6 billion federal surplus, which could cover the $201 million deficit. However, this would have to be negotiated in the assembly. Also, this is a one-time solution. In the long run, the elimination of the food tax means that districts will either have to face significantly lower government revenues or the congregation will have to find a permanent source of income to replace the lost one.

“We are currently looking at a way to complete the school districts,” said Virginia State Senator Frank Ruff.

The problem, Ruff said, is that state legislatures are catching up. Despite the fact that DOE officials said they had notified the House and Senate, actual full membership was only learned from the public.

What happens for Lunenburg, other districts?

Another problem is that Lüneburg and other districts are now trying to work through their budgets for next year. This change means that all districts are stuck until they see how much money, if any, the congregation will give to cover the deficit.

Ditto for other school districts in the area, all of which said they were in a wait mode. For some, that means putting public hearings on the budget on hold.

“I’m not sure about the impact on this year’s budget or next year,” said Dr. Robbie Mason, Charlotte County Superintendent. “I’m not sure how we’re going to fill the gap until I know the exact amount.”