RICHMOND—All three local public school divisions would see further reductions in state funding next year if Gov. Bob McDonnell’s proposal to update the index that determines how much state money each district receives is approved by the General Assembly.

The local composite index, which is normally readjusted every two years to reflect economic conditions, is set for adjustment this year. However, former Gov. Tim Kaine recommended freezing the index for one year — a move that would save the state $29 million and prevent 97 of the state’s school divisions from losing additional state money.

McDonnell announced Monday that he would not support freezing the index.

“Every time the index is readjusted some school systems gain funding, while others receive less,” McDonnell said. “This has occurred for nearly 40 years, and local officials understand the routine and objective biennial implementation of the index.”

A higher score on the index means fewer state dollars. Approximately 30 school divisions, primarily in Northern Virginia, stand to collectively gain $128 million in additional state funding if the index is updated, while 97 of the state’s school districts would lose funding.

Locally, Isle of Wight County Public Schools stands to lose nearly $800,000 in funding. Southampton County would lose about $638,000. Figures were not immediately available for Franklin.

“For nearly 40 years, the Local Composite Index has been an impartial means by which to determine state and local responsibility for education funding in Virginia,” McDonnell said. “The application of this index has always been done in an objective manner, using the most recent fiscal data to most fairly apportion state resources,” McDonnell said.

Local school officials weren’t surprised by the move.

“This matches what we were predicting,” said Katherine Goff, a spokeswoman for Isle of Wight County Public Schools. “We were prepared for this.”

The division stands to lose nearly $800,000 in state funding next year if the index is updated, according to Goff.

Isle of Wight Schools Superintendent Dr. Michael McPherson presented the school board with a list of proposals to close the division’s multimillion-dollar anticipated budget gap last month. The proposals assumed that the composite index would be adjusted as scheduled.

“He had a few things that he had highlighted that would be moved back in the event that the freeze did take place,” Goff said. “None of that would be able to be placed back into the budget at this time.”

Charles Turner, superintendent of Southampton County Public Schools, said that the division would lose about $638,000 next year if the index were updated — on top of more than $1.4 million in already anticipated state cuts.

“It will have a devastating effect on us here in Southampton County Schools,” he said. “The smaller school divisions ultimately are impacted very severely when something of this nature occurs.”

Franklin City Schools Superintendent Dr. Michelle Belle said the division was already expecting “major decreases” from the state.

“When you talk about the composite index going up, it means less state money for us, but we’re anticipating that anyway,” she said.

Belle said the school division is waiting to see what “the bottom line” will be once the final budget is approved. She didn’t have an estimate of how much state funding the school division would lose if the composite index were updated.

“The thing we’re waiting on is his actual budget,” she said.

Local school officials say that they have been in contact with state delegates and senators from the region.

“School divisions in the Hampton Roads region are working strategically to work with local delegations to convey the local impact of this action,” Turner said.

To cover the $29 million price tag of updating the index, McDonnell will recommend to the General Assembly the transfer of $13 million from Literary Fund balances; $8 million through the use of available balances in the Health Insurance Fund to reduce state health insurance premiums; $5.2 million will be found in Real ID savings and an available $3 million will be captured in additional Non-General Fund balances.

McDonnell’s composite index proposal, along with other budget recommendations, must be approved by the General Assembly.

“We’re just watching and developing our budget based on the best practices we can, while we anticipate receiving more information from the state and the localities about what the funding will be,” Goff said.

On the Senate floor Friday, Sen. Louise Lucas, D-Portsmouth, discussed Gov. Bob McDonnell’s support for recalculation of the Local Composite Index (LCI). The LCI determines the amount of state support for local school districts, and its recalculation will give more money to some localities, while taking $115 million from 97 localities.

Her remarks are now available online at Youtube.