Ronald Reagan famously asked: Are you better off now than you were four years ago?
We all know how that question worked out for him — and also for Jimmy Carter.
Instead of four years, though, how about 10 years?
A while back, I wrote several columns looking at some oddities in the state’s school funding formula, the Local Composite Index. Those columns looked at how an influx of new, high-income residents was skewing funding formulas for some rural counties by making it look like they’re richer than they are — and therefore, in the neutral eyes of the LCI, don’t need as much state funding as they once did.
The result: Some rural counties with high levels of student poverty are deemed better able to pay for their schools than Loudoun County, the most affluent county in the country.
I’ve continued to play around with the data that goes into the LCI, which isn’t quite as mysterious as it sometimes seems — the “true value of real property” accounts for 50% of the score, adjusted gross income counts for 40% and taxable retail sales are the remaining 10%.
I took each of those figures from 2024 and compared them to the ones from 2014. What I found helps paint a picture of economic (and demographic) changes across the state that go well beyond the question of how much money the state should provide for local schools. More specifically, that comparison shows in painful detail how much some rural counties, especially in Southwest Virginia, have failed to share in the economic growth across the state.
Real estate values
Over the past decades, property values across the state have risen 54.39%. If you’ve gotten a real estate assessment lately, you already know this.
That growth hasn’t been even. That also likely won’t surprise you. However, the degree to which that growth hasn’t happened in some places might.
Keep in mind the tyranny of small numbers: They can show a big percentage increase that looks impressive even if the actual dollar amounts involved aren’t. That helps explain why Greensville County, one of the least affluent counties in the state, has seen the largest growth rate in property values: 184.26%. Likewise, we see unusual jumps in Brunswick County and Alleghany County/Covington (whose data is combined since they have a joint school system).
Otherwise, the biggest growth rates are exactly where we’d expect them: the counties that have seen the biggest population increase over the past decade. Generally, those are in and around Northern Virginia, the northern Shenandoah Valley, and the counties between Richmond and Northern Virginia.
In Manassas Park, property values are up 99.5%. In Rockingham County, 91.02%. In Frederick County, 90.74%. In Loudoun County, 90.6%. In Orange County, 88.07%.
However, my eye goes toward the places that have shown little change in property values — or even a decline.
Dickenson County has stayed almost flat; its real estate values are up just 0.26%.
Three localities have seen property values decrease:
Highland County: -1.53%
Bath County: -4.59%
Buchanan County: -20.53%
Those first two surprised me. Both those counties have a lot of second homes and both have seen modest population growth, entirely through new people moving in (rather than births). Numbers don’t lie, though.
Buchanan County isn’t a surprise. That county, hit hard by the downtown in coal employment, has consistently seen the biggest population declines, on a percentage basis, of any place in the state. Buchanan has been particularly beset by more people moving out than moving in. We shouldn’t be surprised to find that has depressed property values.
Another way to look at this, though, is this: Many counties across the state, especially in Southwest and Southside, have been losing population. Most of that is because deaths outnumber both births and the number of people moving in. However, even in the relative handful of localities that are seeing more people moving out than moving in, real estate values have still gone up in every community except one: Buchanan County. If there’s one locality in the state that needs some economic help, it would seem to be Buchanan County.
Total income
This might be a better measure of how a locality is faring — how its adjusted gross income has changed. Keep in mind this measures the total income, not an average, so a locality that’s gaining population will naturally see its figure go up while one that’s losing population will see its figure go down — unless the people who remain are making more money.
Here’s how I look at this number: This shows how much money is available to the local economy. It’s not all going to get spent there, but here’s a case where a rising number is undoubtedly better than a declining one.
The locality with the biggest percentage increase is Rappahannock County — 141.08%. There’s a lot of money moving into Rappahannock. Another income growth hotspot is around Albemarle County and Charlottesville — Albemarle is up 124.83%, and Charlottesville 112.14%. The Richmond area is another — Richmond is up 115.35%, and Goochland County is 112.54%.
When we map this we see some distinct places where income growth has lagged well below the state average of 63.76% — primarily in the Southwest and Southside, particularly in the westernmost counties of the Southwest.
Five localities have seen the total adjusted gross income in their communities decline over the past decade, Emporia in Southside and the rest in Southwest:
Tazewell County: -0.01%
Wise County: – 0.76%
Emporia – 2.76%
Buchanan County: -14.74%
Norton: -16.81%
Once again, while many localities are losing population, most are still gaining income but these five aren’t. The places have both fewer people and less money sloshing around the economy than they did a decade ago.
Taxable sales
There’s one final set of figures we can look at retail taxable sales. These aren’t a big factor in the school funding formula, accounting for just 10% of the mix. However, for our purposes here today of looking at the economic health of each locality, it’s a good measure. As with others, this often tracks with population growth: More people means more people buying stuff, which means more taxes collected. Inflation also helps drive up taxable sales, since sales taxes are based on a percentage of the sale price. If prices go up, so do tax collections.
Not surprisingly, then, we see the largest percentage increases in taxable sales come in the counties around Richmond, where we now see the largest population increases. Leading the pack is Powhatan County, where taxable sales are up 154.34% over the past decade, followed by Charles City County at 140.97%.
Also, not surprisingly, we see sluggish growth in taxable sales in some rural areas, particularly in Southwest Virginia. In Norton, sales went up just 1.12% over the past decade. In Bath County, just 0..67%. In Buchanan County, 0.26%.
Six places have seen taxable retail sales decline over the past decade. That’s not a good sign, economically. Five of these don’t particularly surprise me: Hopewell (-0.15%), Buena Vista (-0.34%), Dickenson County (-4.71%), Wise County (-5.06%), Surry County (-.8.37%). The sixth one, and the locality that’s seen the biggest percentage drop in taxable sales, does: Arlington’s taxable sales have fallen by -16.44% over the past decade.
That’s shocking, but maybe it shouldn’t be. We see slow growth in taxable sales (although growth nonetheless) in Alexandria (up 8.27%) and Fairfax County (up 13.55%) against a state average of 33.26%. You can see in the map above how Northern Virginia stands out for its relatively low increases in taxable sales. That’s in line with other data we’ve looked at previously — Northern Virginia is now losing population, and that population loss is driven entirely by the fact that more people are moving out than moving in. Given the size of the Northern Virginia economy, that might be of more concern to Virginia than rural areas that are falling even further behind the rest of the state.
