1. Understanding the Local Composite Index (LCI) December 5, 2013

3. Local Composite Index (LCI) is a wealth indicator  Ratio of locality wealth per capita relative to the state Numerators:  Wealth Factors (with weights) Real Estate Values (.5) Adjusted Gross Income or AGI (.4) Taxable Sales (.1) Denominators:  Average Daily Membership or ADM (.67)  Population (.33) Facts to Keep in Mind

4. Charlottesville’s LCI Decreased From.6861 to.6680 When LCI decreases, state funds increase For 2015, there is a decrease of 1.81 percentage points, or - 2.64%  This decrease is due primarily to a relatively small increase in Charlottesville’s Adjusted Gross Income (AGI) compared to the state, relatively small decrease in real estate values compared to the state and a higher than average increase in enrollment compared to the state Using this year’s funding formula, the decrease in the LCI increases state funding by $404,900

5. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84% -.0145- 2.11%$324,367 Local Taxable Sales State Taxable Sales.22% 3.80% -.0041-.60%$91,717 Local Real Estate Values State Real Estate Values -0.42% -2.79%.00731.06%($163,303) Local Population State Population 2.85% 2.12% -.0011-.16%$24,607 TOTAL-.0181- 2.64%$404,900

6. Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS

7. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84%.0145- 2.11%$324,367

8. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84%.0145- 2.11%$324,367 Local Taxable Sales State Taxable Sales.22% 3.80% -.0041-.60%$91,717

9. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84%.0145- 2.11%$324,367 Local Taxable Sales State Taxable Sales.22% 3.80% -.0041-.60%$91,717 Local Real Estate Values State Real Estate Values -.42% -2.79%.00731.06%($163,303)

10. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84%.0145- 2.11%$324,367 Local Taxable Sales State Taxable Sales.22% 3.80% -.0041-.60%$91,717 Local Real Estate Values State Real Estate Values -.42% -2.79%.00731.06%($163,303) Local Population State Population 2.85% 2.12% -.0011-.16%$24,607

11. FACTOR% CHANGE TO FACTOR % POINT SHARE OF LCI CHANGE OVERALL % SHARE OF LCI CHANGE EFFECT ON STATE FUNDS Local ADM State ADM 2.00%.91% -.0057-.83%$127,512 Local AGI State AGI 1.85% 7.84%.0145- 2.11%$324,367 Local Taxable Sales State Taxable Sales.22% 3.80% -.0041-.60%$91,717 Local Real Estate Values State Real Estate Values -.42% -2.79%.00731.06%($163,303) Local Population State Population 2.85% 2.12% -.0011-.16%$24,607 TOTAL-.0181-2.64%$404,900

12. Numerators:  Wealth Factors (with weights) Real Estate (.5) Adjusted Gross Income or AGI (.4) Taxable Sales (.1) Denominators:  Average Daily Membership or ADM (.67)  Population (.33)

13. Key Points to Remember Relative value of real estate local to state and ADM affect the LCI the most. AGI also had a significant impact this biennium. When the LCI decreases, state funds increase The LCI is computed each biennium by the DOE

14. Understanding the Local Composite Index (LCI) December 5, 2013