Dominion Resources is leading a consortium of Virginia utilities to build a 500-megawatt, coal-fired electricity generating station in St. Paul. The expected boost in the local economy carries with it the potential for a change in Wise County's composite index, the funding formula applied by the state to determine the level of state funding to each locality based on a locality's ability to pay.
The state supplies Wise County with more than half of the school division's annual operational budget needs, far more when federal funds and other flow-through monies aren't taken into account.
Federal funds go toward specific programs and can't be spread across the budget like most state funds to fill needs.
This school year, the state provided nearly $34.8 million to Wise County's school division. Budget projections for next year are for almost $36 million in state funds, an increase of almost $1.2 million. The total projected operations budget for 2007-08 is nearly $72 million, including $14.6 million provided by county taxpayers - an increase of just over $600,000 over the current fiscal year - and $9.5 million in federal money, $6.6 million in sales tax revenues, and $5.1 million in other funds.
The composite index was created by the Virginia General Assembly to dole out state school dollars based on the relative affluence, or lack thereof, of each locality.
Wise County's current composite index ensures a significant financial prop for its school division every year.
In a resolution to be considered by the Board of Supervisors next week, the board will ask the Virginia Coalfield Economic Development Authority (VCEDA) for grant funds to pay for an economic impact study by Virginia Tech centered around the power plant project.
The Dominion-led consortium plans to invest about $1 billion to construct the new power plant, which is to be operational by 2012. Construction should begin later this year.
"The proposed project could potentially substantially increase the general fund revenues of Wise County," reads the supervisors' resolution in part, "and have a potential impact on state educational funding."
Supervisors want a clear picture of "the potential impact (in) the anticipated increase in general fund revenues of the proposed project on long-standing state funding formulas, community housing and county services, and ... a specific concern is how the economic shift of Wise County will impact the state's school funding formula, called the composite index."
The resolution addresses an intent to contract with Virginia Tech to conduct a community and economic impact study, and an intent to prepare a grant application to VCEDA to fund the study.
Big Stone Gap Supervisor John Peace II said there should not be a problem securing VCEDA funds and predicted Virginia Tech specialists will "get started (on the study) this summer and maybe have it ready by November or December."