Bill > HB1167

This bill, effective July 1, 2026, will change how the composite index of local ability-to-pay is calculated for public school funding in Virginia. The composite index is a measure used to determine how much local governments can contribute to school funding based on their wealth, considering factors like the true value of real property (land and buildings), adjusted gross income of residents, and taxable retail sales. The key change is that the value of certain real property that is exempt from property taxes will now be excluded from this calculation. Specifically, this includes property owned by veterans with a 100 percent service-connected, permanent, and total disability, and property owned by the surviving spouse of an armed forces member who died in the line of duty. This exclusion is applied before the state adjusts each school division's contribution to ensure that local governments collectively pay 45 percent of school funding and the state pays 55 percent.

Budget and Finance

https://lis.virginia.gov/bill-details/20261/HB1167