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CHARLOTTE COURT HOUSE – On Jan. 1, Virginia eliminated its grocery tax. There was just one problem. That tax had provided millions of dollars in funding for school districts across the state, including Charlotte County. Specifically, $201 million had been set aside in the current two-year budget, money that would go from the grocery tax to help fund schools. Districts like Charlotte County schools budgeted with their share of that money in mind, expecting it to come because nobody told them otherwise. 

That’s why superintendents were surprised last Friday, when they all received a letter from the Virginia Department of Education. It explained there had been an error and now, more than three fourths of the way through the current school year, districts won’t receive all the state funding that had been promised, for this year or the next. 

“I cannot remember an instance in which state funding numbers were decreased in the middle of a fiscal year,” said Charlotte County Superintendent Dr. Robbie Mason. “This creates special issues for us, as we are over halfway through our budget year.” 

How did this happen? 

The biggest question is how did this happen? It comes down to two mistakes. First, from the end of Gov. Ralph Northam’s term to the beginning of Gov. Youngkin’s, there has been a push to get rid of the state’s grocery tax. That finally happened last year, removed as part of budget negotiations. Here’s where the problem comes in. Multiple members of the Assembly had said the schools would be “held harmless”, that is the state would find another source to give them the $201 million over two years it was taking away. That promise never ended up on paper, however. In the final budget signed in June 2022, there was no alternative source for that funding to come from. 

And so, the state had $201 million less than before to give schools. But the Department of Education also made an accounting error. They didn’t take out the $201 million when doing budget calculations about how much each district would receive from the state over the next two years. Then they sent out the incorrect calculations to the districts, each of which used it to plan, to pay for salaries and make repairs. 

Virginia Department of Education Director of Communications Charles Pyle said it was just simple human error. 

“We did not catch the error until last week,” Pyle said. “We notified staff of both House Appropriations and Senate Finance on Wednesday.” 

That would be last Wednesday, Jan. 25, with school district superintendents receiving an email about the situation two days later. 

Charlotte County schools stuck waiting

So now districts are aware that there will be a shortfall. However, the state can’t tell them exactly how much it will be yet. And it could be a few days, if not weeks, before that changes. Some districts have rough estimates about how much will be lost, guessing based on previous years. For others, a shift in population numbers and other changes make it harder to guess correctly. And in a situation like this, you don’t want to be wrong, so they’re stuck in a holding pattern. 

Virginia State Superintendent Jillian Balow has promised each district will receive an updated estimate in February, once the Virginia House and Senate agree to budget revisions. But first, state lawmakers have to agree. Sometimes that’s a one-day agreed upon vote. In other years, it’s taken days to negotiate a deal in the Assembly. At the moment, the Department of Education is telling districts to expect updated numbers by Feb. 9.

Now yes, the state does have a rainy day fund and other sources that could cover the $201 million, but that would have to be negotiated in the Assembly. But that’s a one-time solution. Long-term, this switch means the districts will have to either expect to receive significantly less from the state or the Assembly will have to find a permanent revenue stream to replace the one that was lost.

As for this year, budget discussions are in full swing here for Charlotte County schools and across the state. This announcement means all districts are stuck, until they see how much money the state will actually give.

Until then, Mason said Charlotte County is stuck in a wait and see mode. 

“I am not certain as to the impact on this year’s budget, or next year’s,” Mason said. “I am not sure how we will fill the void until I know the exact amount.”