Isle of Wight school debt modest

Published 8:34 pm Tuesday, February 5, 2019

Virginia average nearly twice per capita load here

By Diana McFarland

Managing editor

Isle of Wight may be eighth among Virginia’s 95 counties for overall debt, but it has considerably less debt related to education than other localities in the Commonwealth, according to the 2017 comparative report of local government revenues and expenditures, published by the Virginia Auditor of Public Accounts.

The perception has always been that schools constitute the bulk of local costs. That’s still true for many localities, and it’s true statewide of counties generally. Of the total debt obligated by Virginia counties in 2017, 58 percent was for education. 

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But not so in Isle of Wight. Here, only 28 percent of the total debt was for education as of 2017. The bulk of what local taxpayers owe — 72 percent — is committed to a variety of other county projects.{mprestriction ids=”1,2,3,4,5,6″}

The per capita obligation for education is another way of measuring education debt commitments. Virginia counties averaged $3,292 per capita for education projects in 2017, but in Isle of Wight, the education debt is only $1,803 — about 55 percent of the statewide average.

Fairfax County, which came in second in total outstanding debt among Virginia counties, and which is rated as having one of the state’s top public education programs, carried $4,883 in per capita debt for education in 2017, more than half of its $9,151 total per capita debt, according to the report. 

  Isle of Wight County Administrator Randy Keaton pointed out that a good portion of Isle of Wight County’s overall debt is for items other than bonded debt, and that’s accurate. Bonded debt in Isle of Wight is 66 percent of the total. Across Virginia, bonds account for 43 percent of the debt owed by counties.

Keaton referred to the county’s annual audit report, which breaks down the figure in several categories. 

Of the $238.6 million in overall debt for fiscal 2017,  $151 million was from general obligation bonds — a funding tool used for items such as buildings, the new 911 radio system and other capital projects. 

Overall indebtedness also includes the county’s PACE program and net pension liabilities for both the county and the schools — that is, if everyone decided to retire at the same time — as well as other items, said Keaton. 

The state-sponsored Purchase of Agricultural Conservation Easement program, or PACE, was an attempt by the General Assembly to counteract the loss of the state’s farmland. Landowners in the program agree not to develop their property in exchange for interest paid on its value for 30 years. After 30 years, the landowners receive the principal, with any capital gains deferred until that time. 

The program, which began in 2006, has a balance of $4.3 million that represents the cost of the development rights that will be paid to landowners in 2040, said Keaton. Each year, Isle of Wight makes  $209,000 in interest payments, said Keaton. 

Isle of Wight suspended the program in 2014. 

Since the comparative government report for fiscal 2017 was posted online, the county’s overall debt has since decreased about $4.4 million and its bond debt dropped by $5.8 million to $145.2 million, according to Isle of Wight’s audit report for fiscal 2018. 

However, since all Virginia counties are required to report the same material, Isle of Wight’s distinction of being eighth for overall debt is likely correct, said Keaton. 

Isle of Wight debt at a glance

Education as percent of all debt

All counties 58 percent

Isle of Wight 28 percent

Education per capita debt

All counties $3,292

Isle of Wight $1,803

Looking back to 2009, Isle of Wight County’s per capita debt for education has increased by 65 percent, but overall per capita debt has increased 146 percent. 

IW education debt per capital in 2009   $1,090

Percentage of education debt to all in 2009  42 percent

Bonded debt as a percent of total debt

All counties 43 percent

Isle of Wight 66 percent

Per capita debt increase for Isle of Wight

2009 $2,618

2010 $3,293

2011 $4,214

2012 $4,089

2013 $4,081

2014 (total debt sheet was dropped by the state)

 2015  (same as above)

2016 $6,035

2017  $6,436