Franklin County got a rude awakening recently.
It’s the number 0.4596.
That’s the county’s most recent score on the Local Composite Index, the often-controversial state formula that determines school funding in Virginia. The index attempts to measure a locality’s “ability to pay” — the higher the score, the more a locality is deemed able to pay for its own schools, and the less state funding it receives. In theory, this is supposed to help less affluent communities, and much of the time it does. But then there are the times it doesn’t.
Franklin County is about to experience one of those times.
In some ways, the county statistically looks much like other counties across Southwest and Southside — its median household income and poverty figures don’t make it stand out from its neighbors. Not surprisingly, in recent years the county’s LCI score has been in line with surrounding localities. In the latest computation, though, Franklin County jumps up — way up.
After scoring 0.3953 in 2020-2022 and 0.3982 in 2022-2024, Franklin County’s LCI score now comes in at 0.4596. (The highest score possible is 0.8000). That result says Franklin County is considered more affluent — and therefore more able to pay for its schools — than any locality west of Albemarle County. It also means that Franklin County is considered more affluent than some localities in the urban crescent. For instance, Chesterfield County in the Richmond suburbs comes in at 0.3563. Prince William County in Northern Virginia scores 0.3631.
Franklin County’s increased LCI score translates into a $3.7 million reduction in state funding, which prompted school officials last week to warn that if they had to cut that much money, they might have to close some schools.
So is rural Franklin County really better able to pay for its schools than some suburbs in the urban crescent?
If you look at some economic data, the proposition seems laughable.
Franklin County’s median household income, according to the Census Bureau, is $66,275. In Chesterfield, it’s $95,757. In Prince William County, it’s $123,193, almost twice as high as Franklin County. For good measure, the median household income in Stafford County — another county that is ranked less able to pay than Franklin County — is $128,036.
Now let’s look at another economic measure: the number of students who live in poverty. In Franklin County, 47.29% do, according to the Virginia Department of Education. In Chesterfield County, it’s 34.83%. In Prince William County, 32.69%. In Stafford County, 31.42%. Yet somehow Franklin County is deemed better able to pay than any of those localities. Franklin County’s student poverty rate is almost exactly the same as Bland County, yet Bland County has a much more modest LCI of 0.3046 — although even Bland is rated as having almost twice the capacity as Lee County, which comes in at 0.1712.
So how can this be?
Two things are going on here.
Enrollment factors into a locality’s LCI score. The more students a locality has, the more state funding it gets. The fewer students, the less state funding. That makes sense, but then there’s this twist: Under LCI, if enrollment goes down, the locality is considered better able to pay so the LCI score goes up.
Here’s why that doesn’t necessarily make sense, particularly in rural areas: Whether there are 20 students in a class or 15 or 10, you still need a first grade teacher. You still need a principal. You still need to heat the school. And the bus routes don’t get any shorter, no matter how few students are being picked up. Certain expenses stay the same even if enrollment goes down. It’s easy to say from afar, oh, they should just consolidate some schools, but that’s easier said than done: Franklin County just has one high school and one middle school.
In any case, Franklin County has seen enrollment drop and that has complicated its LCI score. So has this: an influx of affluent new residents along Smith Mountain Lake.
I’ve written about this before: Six localities in Virginia are seeing a wave of newcomers who make more than $100,000 a year. Five of those are in what demographers call “rural resort” communities — three are along the Chesapeake Bay (Lancaster, Mathews and Northumberland) and two are along Smith Mountain Lake (Bedford and Franklin). These newcomers have helped transform Smith Mountain Lake into a distinct community that’s no longer just a summertime retreat; it’s a year-round place to live. They’ve also whacked Franklin County’s LCI score. Property values account for half of the LCI formula. In Franklin County (and probably those places along the Chesapeake Bay, too), property values have exploded. Franklin, though, is very much a tale of two communities: There’s the lake and then there’s everything else. Life around Westlake Corner and Mariner’s Landing is very different from life around Shooting Creek. When you drill down to look at the census tract level, incomes around Smith Mountain Lake are more than twice what they are in some other parts of Franklin County. Sure, the county could raise its real estate tax rate, but that’s also a regressive tax — for low-income earners, an extra dime on the rate constitutes a bigger portion of their income than it does for those in their lakefront homes.
Franklin County’s not the only place where this has happened. Floyd County also had a big jump, from 0.3418 to 0.3513 to 0.4056 — and it doesn’t have lakefront property involved. Richmond also saw a big jump in its LCI score — from 0.4688 to 0.5139 to 0.5740 — which suggests that this isn’t simply a phenomenon in rural areas.
Still, it’s in rural areas where we can see things most clearly. Let’s look at some of those Chesapeake Bay counties that, like (parts of) Franklin County, are now considered “rural resort” communities.
Northumberland County has a median household income of $64,655, slightly lower than Franklin County’s. Northumberland has 59.77% of its students living below the poverty line — yet its LCI score is one of the highest possible (0.7672), meaning that Northumberland is deemed more able to pay for its schools than Loudoun County, by some measures the most affluent county in the country with a median household income of $170,463.
Lancaster County presents an even more extreme example. Its median household income is $62,674, lower than Northumberland which is already lower than Franklin County. Lancaster has 68.3% of its students living in poverty, one of the highest rates in the state. Yet Lancaster scores a perfect 0.8000 on the LCI, meaning it’s better able to pay for its schools than anywhere else in the state — except for Arlington, Alexandria, Fairfax city and Falls Church, all of which also scored 0.8000 and three other small rural systems that also had a perfect score. Those three were Highland County, Rappahannock County and Surry County.
If you look at these numbers and think something is wrong here, you’re not alone. There’s long been unhappiness with the state’s school funding formula, but also great reluctance to tamper with it for fear that any change will make things worse for somebody. Rural areas, in particular, are long accustomed to losing out and while they might benefit the most from some changes, they’re also the most vulnerable if they wind up with less money — as Franklin County is discovering now.
In his State of the Commonwealth Address last week, Gov. Glenn Youngkin declared that “we all agree we can do better than the current … funding formula. My administration is committed to working with you between now and the Nov. 1, 2024, deadline we set to deliver a plan to replace the byzantine … system with a system that puts students first.”
Just what might that new formula look like? That’s anybody’s guess, but Keith Perrigan, superintendent in Washington County and head of a coalition of small and rural school systems, has some ideas. He says that, compared to other states, Virginia “has a dinosaur for school funding” that measures the wrong things.
He’d like to see more emphasis on the type of students a school system enrolls — in other words, how many are coming from poor households? “We know that the more challenges the student’s family has, the harder it is to educate,” he says. That would help places such as Franklin County — and others, where there are lots of students from poor households but the current formula looks instead at numbers generated by the development at Smith Mountain Lake. “The problem is you can’t raise taxes just on the few rich people who bought property around the lake and most of the people in that area can’t afford that hike,” he says.
Virtually all rural areas in Virginia these days are represented by Republicans, which, politically speaking, gives them an incentive to change the funding formula. Democrats, though, might have reasons of their own to want to find a better system. They represent the central cities that also sometimes find the funding formula works to their disadvantage. The LCI says that Richmond is better able to pay for its schools than Loudoun County, even though 70.68% of Richmond students live in poverty but only 16.73% of Loudoun students do.
There’s also something else potentially driving a change to the funding formula: solar farms. Democrats are the most enthusiastic about the Clean Economy Act, which mandates a conversion to a carbon-free electric grid. That requires exponential growth in solar farms (among other things) and, by definition, it’s rural areas that have the land for solar farms. Some counties, though, are pushing back against solar — not because they’re anti-clean energy, and not simply because they worry about too much farmland being taken out of production (although there’s that, too), but because they worry that a bunch of solar farms will skew their LCI scores. Old Man McGrump’s Back 40 may not be worth much now but if you stick solar panels on it, suddenly it’s a lot more taxable — and the LCI thinks the county is a lot more affluent than it really is. I suspect that’s why Surry County — where 58.57% of the students live in poverty — is rated as having the highest LCI score possible. Surry is home to a nuclear power plant.
When I interviewed the chairman of the Senate Agriculture, Conservation and Natural Resources Committee recently, he acknowledged that this is a problem — and an obstacle to expanding solar energy. “We’ve got a lot of rural jurisdictions that are reluctant to do solar projects because if they get wealthier, it affects their LCI score — so maybe we need to exempt clean energy from LCI,” said state Sen. David Marsden, D-Fairfax County.
Once you start writing in exemptions, it’s not that big a jump toward rewriting the whole thing.
Perrigan offers just one caution, and it’s a big one: “If you want people to sit down at the table, and get the best formula, you have to have some assurance that all ships will get lifted.” Nobody wants to see their funding go down.