Anne Holton

Virginia Secretary of Education, Anne Holton told JLARC that Virginia schools face a "trifecta of challenges."

A new legislative report shows a decline in state spending on K-12 public education in the past decade, with 7 percent less spent per pupil since 2005.

In a report released Monday, the Joint Legislative Audit and Review Commission found an increasing financial burden on local school divisions, a decreasing ratio of teachers to students, and fewer support services for teachers faced with a huge swell in the number of students living in poverty or unable to speak English.

“I think there are a lot of canaries in the coal mine in this report,” Secretary of Education Anne Holton told the commission after the staff presented an overview of the 112-page report.

Holton described “a trifecta of challenges” — reduced resources, more students who require extra effort to teach, and higher expectations for success. “I am concerned we will not continue to maintain our high-quality education if we continue to starve” local school divisions, she said.

The report, “Efficiency and Effectiveness of K-12 Spending,” notes that spending on school operations declined from $10,927 per pupil in 2005 to $10,148 in 2014, after adjusting for inflation. The change represents a decline of 7.1 percent.

Many school divisions already find it harder to hire and retain qualified teachers, Holton said, and the gap is growing in achievement between the best-performing school divisions and those that face greater challenges in helping students who live in poverty or face other barriers to achievement.

The number of students living in poverty increased by 45 percent in the past 10 years, while the number of students not proficient in English soared by 69 percent, the report found.

“We’ve got to figure out how to bring up our bottom,” said Holton, who emphasized that Gov. Terry McAuliffe has made public education the top priority of the two-year budget he will propose in December.

Despite the downward trend in state spending, Virginia still ranked higher in per-pupil expenditures than 34 other states that have faced similar budget challenges since the recession, the report said.

But after adjusting for inflation and increased enrollment, Virginia spent 9 percent less on K-12 instruction in 2014 than it did in 2005.

“The spending did not keep pace with growth in enrollment or in inflation,” said Jamie S. Bitz, chief legislative analyst and leader of the study.

The report estimated that more than 4,000 additional teachers would be necessary to maintain staffing at 2005 levels and almost 6,000 more to keep staffing at 2009 levels, the peak before sharp spending cuts in the recession.

Almost 90 percent of the state’s local school divisions — educating 98 percent of Virginia students — reduced their spending on instruction, most of them by more than 10 percent.

But local school divisions now supply 56 percent of funding for K-12 education, compared with 38 percent from the state and 6 percent from the federal government. Virginia has the 11th-highest share of local funding for public education in the country.

Local school divisions also pay 100 percent of the cost of teachers and other instructional expenses beyond the minimum requirements of the state Standards of Quality, which represented an additional $3.6 billion in the fiscal year that ended June 30, 2014.

“Our localities can’t afford to give anymore,” said Meg Gruber, president of the Virginia Education Association, in an interview after the presentation.

In the 2013 fiscal year, for example, Chesterfield County spent an additional $105.3 million, or almost 93 percent more than required by state law. Richmond spent an additional $56.5 million, or 86 percent more; Henrico County an additional $55.3 million, or 45 percent; and Hanover County an additional $29.3 million, or 67 percent.

“Everybody understands there’s been less funding available for K-12 education,” Sen. John Watkins, R-Powhatan, chairman of JLARC, said in an interview. “The question is, who is keeping up with the funding level and who isn’t, and why?”

Watkins said he has high hopes for online learning, which the JLARC report said could save money on education but is still too limited and unproven to expand greatly.

“That’s part of the answer, I think,” he said.

The biggest decline came in spending on teacher support services, which fell 13 percent. Those support services include help for teachers in fashioning curriculum that aligns with the state Standards of Learning and how to help students who require more resources to teach.

The report recommends that the General Assembly provide funding to the Virginia Department of Education to hire staff to help local school divisions on teacher training and curriculum development.

Still, the proportion of spending on instruction grew by 2 percentage points — to 65.1 percent — as school divisions made deep cuts in spending on facilities and, to a lesser degree, transportation. School divisions spend 70 percent less to operate and maintain facilities than they did 10 years ago.

Some reductions have increased the efficiency of non-instructional spending, but others may increase the long-term costs to school systems by deferring maintenance of facilities and equipment, and postponing facility renovations and construction.

Spending on transportation has declined less, but many school divisions have cut spending on new buses. As a result, the long-term costs of operating the buses may increase while their reliability decreases. The report said the reduced spending on new buses has had “no measurable impact on safety yet,” but it noted that 1,900 school buses are operating beyond their recommended life, or 16 percent of the fleet statewide.

“We’re seeing the report verify that our school systems are under extreme stress,” said Gruber, of the VEA.

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