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HB 1101

Local composite index school funding formula; data center revenue.

2026 Regular Session Introduced by Keith Hodges

HB 1101 incorporates data center tax revenue into Virginia's school funding formula's local composite index, potentially reshaping state education aid distribution across districts.

Assigned HED sub: K-12 Subcommittee
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Bill Summary · HB 1101

Legislative bill overview

HB 1101 modifies Virginia's school funding formula by incorporating data center revenue into the local composite index (LCI), which determines how state education dollars are distributed to school districts. The bill appears designed to adjust how local wealth is calculated for funding equity purposes, potentially affecting the amount of state aid different districts receive based on data center tax revenues within their localities.

Why is this important

School funding formulas directly determine resource availability in classrooms—affecting teacher salaries, programs, and facilities. Changes to how "local wealth" is measured can significantly redistribute state education dollars between affluent and less affluent districts, making this a consequential equity issue. Data centers generate substantial tax revenue in certain Virginia regions, so including this in the funding formula could substantially shift funding allocations statewide.

Potential points of contention

  • Geographic disparity: Data centers are concentrated in specific regions (Northern Virginia, parts of Southwest Virginia), which could advantage those localities while disadvantaging rural or less industrialized areas
  • Funding equity concerns: Using data center revenue in the LCI could undermine efforts to equitably fund high-poverty districts if interpreted as increasing their "local wealth" artificially
  • Implementation complexity: Determining how to fairly value and integrate volatile data center revenues into a stable, predictable funding formula presents technical challenges

Compiled from official sources — confirm details with the bill’s official record.

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