Why Virginia’s School Funding Formula Matters for Alexandria
- kellycarmichaelboo
- Jan 21
- 6 min read
January 21, 2026
By: Michelle Rief, Ph.D. (District A) and Ashley Simpson Baird, Ph.D. (District B)
On January 22, the Superintendent will present the FY 2027 Proposed Combined Funds Budget. The FY 2027 “Combined Funds” includes the Operating, Grants and Special Projects, and School Nutrition Funds, which together support ACPS operations for the 2026-2027 academic year. Community members may sign up to speak and share feedback at the Budget Public Hearing on Tuesday, January 27 at 6 p.m.
When Alexandria families talk about class sizes, English learner support, or whether schools can retain experienced teachers, they are really talking about how Virginia funds public education.
Last Thursday, the Alexandria City School Board held a work session focused on that underlying issue. This conversation matters now for several reasons. The General Assembly has just begun its 2026 session. The state commissioned a major study of its K-12 funding formula in 2023. And locally, Alexandria continues to face difficult budget choices, even as our community remains deeply committed to strong public schools.
This post is meant to do three things:
Explain how Virginia’s school funding formula works, in plain language
Share what the state’s own research found
Explain why Alexandria is disproportionately impacted, despite being labeled a “wealthy” locality
How Virginia Funds Public Schools (The Basics)
Virginia primarily funds K-12 education through what’s called the Standards of Quality (SOQ) formula. This is a staffing-based funding approach as opposed to the more commonly used student-based funding model, which is currently used by 35 states (only nine states take the staffing approach).
In simplified terms, the formula works like this:
Staffing assumptions. The state calculates how many teachers, counselors, aides, and other staff are “needed” using a mix of fixed and prevailing staffing ratios, which are then multiplied by student enrollment.
Cost assumptions. Next, the state multiplies the number of staff needed by the assumed salary and benefit costs, and adds other cost assumptions for transportation, utilities, etc.
Cost-sharing using the Local Composite Index (LCI). The total “SOQ cost” is then split between the state and each locality based on the LCI, which is intended to measure a locality’s ability to pay.
The LCI relies heavily on property values, income, and sales tax revenue. Localities with a high LCI are expected to fund most school costs locally; localities with a low LCI receive more state support.
This structure dates back to the 1970s. JLARC found that the formula has not kept pace with current instructional and staffing needs.
What the State’s Study Found on the Virginia School Funding Formula
In 2023, the Joint Legislative Audit and Review Commission (JLARC), a nonpartisan research arm of the General Assembly, completed a comprehensive review of Virginia’s K-12 funding formula.
Some key findings include:
Virginia underfunds public education overall. Virginia spends about 14% less per student than the national average, despite having above-average fiscal capacity
Multiple funding models show a significant gap. Depending on the model used, Virginia school divisions need 6% to 33% more funding than the formula currently provides
Localities are filling the gap. In FY2021, the SOQ formula estimated schools needed $10.7 billion statewide, but divisions actually spent $17.3 billion. That $6.6 billion difference was paid by local governments
This is not an Alexandria-only problem. Every school division in Virginia spends more than the SOQ formula says is required.
Why Alexandria Is Disproportionately Impacted
While the funding system underfunds schools statewide, Alexandria is uniquely affected by how the formula masks student needs and high regional costs.
A “Wealthy” Label That Masks Student Need
Alexandria has the maximum Local Composite Index (0.8000). That means the state assumes the City can fund roughly 80% of school costs locally.
As a result:
In FY 2025, ACPS received $3,731 per student in state SOQ funding, the lowest amount of any school division in Virginia
The statewide average in FY 2025 was $6,978 per student
At the same time, Alexandria serves a student population with higher needs than many surrounding jurisdictions:
Over 52% of ACPS students come from low-income families
About 37% are English Learners, the third-highest percentage in the Commonwealth
Our special education population is comparable to regional peers
In short, the formula treats Alexandria as uniformly wealthy, even though our classrooms reflect significant economic and linguistic diversity.
Higher Costs That the Formula Doesn’t Reflect
It also costs more to operate schools in Northern Virginia. The JLARC study found that:
Alexandria’s labor costs are 38% higher than the state average
The state attempts to account for this through the Cost of Competing Adjustment (COCA), but:
The COCA has not been updated since 1995
It adds only 9.83% to salary assumptions for instructional staff
That adjustment is also run through the LCI, reducing its impact in Alexandria
The result is that Alexandria taxpayers must absorb most of the difference between state assumptions and real-world costs.
Staffing Assumptions That Don’t Match Reality
Virginia’s formula also assumes far fewer staff than divisions actually need. Every school division in the state staffs above SOQ levels.
For example:
In FY21, Virginia school divisions employed 57,900 more employees than the SOQ formula calculated
Roles like counselors, instructional specialists, and mental health supports are undercounted or excluded
In FY23, school divisions employed 3,377 EL teachers, yet the SOQ calculated that only 2,600 were necessary, a 33% gap
Alexandria funds additional staff locally because our students need those supports to succeed.
A Common Misconception About Per-Pupil Spending
One argument that often comes up is that Alexandria’s per-pupil spending appears high, especially compared to other parts of the state.
The JLARC study analyzed this specifically and found that after adjusting for student need, local labor costs, and enrollment, Northern Virginia school divisions look similar to others across the Commonwealth.
In other words, per-pupil spending is higher here because it costs more to educate students here, not because schools are overstaffed or operating inefficiently. Higher costs reflect higher wages, housing, transportation, and service costs in the region, not excess programming.
What “Funding Only the SOQ” Would Actually Mean in Alexandria Schools
To illustrate how the SOQ functions as a minimum standard, it is helpful to consider how staffing levels would differ if divisions operated strictly within SOQ assumptions.
Larger Class Sizes and Fewer Adults in Buildings
The SOQ reflects minimum staffing levels, not what it takes to operate schools effectively.
If ACPS staffed only to SOQ:
Class sizes would increase
Schools would have fewer instructional aides, interventionists, and specialists
Counselors, social workers, and student support staff would be spread more thinly
Every division in Virginia staffs above SOQ levels because the formula does not reflect the real demands of today’s schools.
Less Individual Attention for Students Who Need It Most
Alexandria’s higher-needs students benefit from targeted interventions, small-group instruction, and consistent relationships with trusted adults.
If ACPS staffed only to SOQ levels, students who need more support would receive less.
What This Means for Local Budgets
Due to the SOQ, LCI, and COCA:
Only about 19% of ACPS operating funding comes from the state
Roughly 80% comes from the City of Alexandria
Most Virginia divisions receive 50–65% of their school funding from the state.
A related regional study found that for every dollar Alexandria sends to the Commonwealth, the city receives about 40 cents back in direct support. Public education funding is a major contributor to that imbalance.
This means Alexandria taxpayers consistently step in to fill the gap between what schools need and what the state provides.
Why This Matters for Students and Staff
Funding decisions have direct implications for staffing, compensation, and classroom resources.
The JLARC study found:
Research consistently shows that teacher quality affects student performance more than any other factor
The state does not provide systematic or consistent increases in K-12 salaries, which makes it difficult for localities to do so
Inconsistent pay increases negatively impact teacher retention
Statewide, three-fourths of school staff surveyed said low pay is a serious issue
In Alexandria, 87% of our operating budget is already allocated to salaries and benefits, which is higher than the statewide average (84%). This limits discretionary flexibility in local budgeting decisions.
Board-Adopted Legislative Priorities
The School Board has adopted legislative priorities that reflect both the JLARC findings and Alexandria’s local context, including:
Implementing the JLARC K-12 education funding recommendations
Reforming Virginia’s K-12 funding formula toward a student-based model
Update cost assumptions, including the COCA
Allowing a local 1% sales tax referendum to support school construction, since the state provides no capital funding through the SOQ
Funding reform is complex and affects 132 school divisions differently. Meaningful change often happens incrementally through policy adjustments and sustained investment. Some progress has already been made, including improvements to English Learner staffing ratios and at-risk funding calculations, but much work remains.
Why We’re Sharing This Now
Understanding the funding formula helps explain why budget conversations feel so constrained, even in a community that values education deeply.
Alexandria is doing its part. Our city invests heavily in its schools. Our educators serve a diverse, high-need student population with commitment and care.
The challenge is that the state system has not caught up with today’s realities.
When we talk about state underfunding, we are not talking about frills. We are talking about the staffing and supports that make classrooms functional and learning possible.
How To Stay Engaged
Thank you for taking the time to learn more about Virginia’s K-12 Funding Formula. Here are additional ways you can stay engaged on the FY 2027 Combined Funds Budget:
Contact the School Board and share your feedback on the FY 2027 CF Budget
Contact your State Senator and Delegate to share your feedback about Virginia’s K-12 funding formula
Watch live and recorded School Board budget meetings and work sessions