understanding the local composite index (lci)
DESCRIPTION
Understanding the Local Composite Index (LCI). December 5, 2013. Facts to Keep in Mind. 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) - PowerPoint PPT PresentationTRANSCRIPT
Understanding the Local Composite Index (LCI)
December 5, 2013
Average Daily Membership (ADM) Component =
Local True Values Local Adjusted Gross Income Local Taxable Retail SalesLocal ADM Local ADM Local ADM
.5 + .4 + .1
State True Values State Adjusted Gross Income State Taxable Retail SalesState ADM State ADM State ADM
Population Component =
Local True Values Local Adjusted Gross Income Local Taxable Retail SalesLocal Population Local Population Local Population
.5 + .4 + .1
State True Values State Adjusted Gross Income State Taxable Retail SalesState Population State Population State Population
Local Composite Index =
((.6667 x ADM Component) + (.3333 x Population Component)) x 0.45
COMPOSITE INDEX FUNDING FORMULA
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
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
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%
.0073 1.06% ($163,303)
Local Population
State Population
2.85%
2.12%
- .0011 - .16% $24,607
TOTAL - .0181 - 2.64% $404,900
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
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
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
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%
.0073 1.06% ($163,303)
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%
.0073 1.06% ($163,303)
Local Population
State Population
2.85%
2.12%
- .0011 - .16% $24,607
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%
.0073 1.06% ($163,303)
Local Population
State Population
2.85%
2.12%
- .0011 - .16% $24,607
TOTAL - .0181 -2.64% $404,900
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)
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
Understanding the Local Composite Index (LCI)
December 5, 2013