Section 22.1-98.2, Code of Virginia, provides additional state funding to school divisions serving fewer than 1,100 students in the prior school year, in a locality that has a local composite index of 0.6000 or greater, and has 65 percent or more of its local taxes coming from real estate taxes, if they enter into a cost-saving or service-sharing agreement with a contiguous school division that meets criteria established by the Board of Education. A copy of the current criteria approved by the Board of Education is attached. Section 22.1-98.2, Code of Virginia, further authorizes the Virginia Department of Education (VDOE) to provide the additional state funding to the qualifying school division by calculating its state Basic Aid entitlement using the lowest composite index of the contiguous school divisions involved in the agreement. The statute also requires the Governor to approve any adjusted Basic Aid payments before they are distributed to the qualifying school division and VDOE to report annually to the Chairmen of the House Appropriations and Senate Finance Committees the cost-savings agreements made and the adjusted state shares so approved.

For fiscal year 2018, Highland County Public Schools and Rappahannock County Public Schools met the criteria established in Section 22.1-98.2. Highland County submitted a cost sharing agreement made with Augusta County Public Schools and Rappahannock County submitted a cost sharing agreement made with Madison County Public Schools. Copies of both agreements provided by the school divisions. pursuant to the Board of Education's criteria and Section 22.1-98.2, are attached. The submitted agreements were reviewed VDOE and found to meet the criteria established by the Board of Education.

Governor McAuliffe approved Highland County's and Rappahannock County's requests for the adjusted Basic Aid payment. Consequently, Highland County received a supplemental state Basic Aid payment in fiscal year 2018 in the amount of $769,300. This payment was based on Augusta County's fiscal year 2018 composite index of 0.3508 in lieu of Highland County's composite index of 0.8000. Rappahannock County did not receive a supplemental state Basic Aid payment in fiscal year 2018. This was due to language in Chapter 589 of the 2008 General Assembly which stated that the sum of the Basic Aid and Supplemental Basic Aid payments to Rappahannock County shall not exceed its fiscal year 2007 Basic Aid payment of $1,129,280. The Basic Aid payment to Rappahannock County for fiscal year 2018 already exceeded the cap established in Chapter 589, so it was not eligible for a Supplemental Basic Aid payment last fiscal year.

If you have questions or require additional information, please do not hesitate to contact Kent C. Dickey, Deputy Superintendent for Finance and Operations, at (804) 225-2025 or kent.dickey@doe.virginia.gov.

/s/ James F. Lane, Ed.D.
Superintendent of Public Instruction