School Board Adopted FY 2013 Budget - Fluvanna County Public ...

Appendix C
Composite Index of Local Ability to Pay
The Composite Index of Local Ability to Pay (“Composite Index” or “LCI”) is a formula contained in
the annual Appropriation Act passed by the Virginia General Assembly that adjusts how much public
education funding a locality receives based on the formula. The principal factors used in the formula are:
a) True values of real estate and public service corporations;
b) Adjusted gross income;
c) Sales subject to the state general sales and use tax;
d) Average Daily Membership (“ADM”);
e) Population.
The formula is composed of two calculations that are combined. The first is the “index of wealth per
pupil” or ADM calculation and the second is the “index of wealth per capita” or Per Capita calculation. The
parts have different weighting assigned to them, ADM being 2/3 of the final figure and Per Capita 1/3 of the
final value.
The LCI for a locality is recalculated on a biennial basis. The data that is used in the calculation
“lags” significantly. For example, the factors detailed above that were used to determine the 2012 – 2014
Biennial LCI are from 2009: true values of property; adjusted gross income; general sales and use tax; and
population. A copy of the trend analysis sheet included in the LCI distribution spreadsheet follows the two
pages containing the LCI calculation for Fluvanna County.
Fluvanna’s LCI for the 2012 – 2014 biennium is 0.3924, which means that Fluvanna is responsible for
39.24% of the state – calculated costs of educating its children and the state share is 60.76%.
The formula with factors used in the computation of the Fluvanna LCI for the 2012 – 2014 Biennium is
shown on the following two pages.
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