ANALYSIS: Missouri wrestles with federal school money

Sunday, February 6, 2011 | 4:20 p.m. CST; updated 7:39 p.m. CST, Sunday, February 6, 2011

This story is the latest installment in a joint project by The Associated Press and Associated Press Managing Editors on the fiscal crisis facing U.S. states and cities, how state and local governments are dealing with severe budget cuts, and how American lives will change because of it

JEFFERSON CITY — Just days before the current school year began, President Barack Obama signed a law providing $10 billion to help pay the salaries of staff at the nation's financially strapped public schools.

At that same time in Missouri, about four-fifths of the school districts were reducing their staff — teachers, classroom aides, custodians, cafeteria workers, bus drivers, nurses, secretaries and counselors included.

Six months later, that federal money — which was intended to save jobs during the current school year — has yet to make it to Missouri's 522 public school districts. And Missouri's elected officials are at odds over what to do with it.

Some Republican senators want to reject Missouri's $189 million allotment as a symbolic statement of discontent with the rising federal deficit. Some have suggested saving it until next year. House budget leaders have proposed using it to replace state money already allocated for schools, essentially holding total school funding flat. And Gov. Jay Nixon has proposed a give-and-take scenario in which schools would get a funding boost this year but a reduction in aid next year.

Schools, meanwhile, are well into their second semester of uncertainty.

At the Capitol last week, some members of the Senate Appropriations Committee wondered how much it really mattered. The senators said they hadn't heard much of an outcry from school officials over recent state funding cuts.

Ron Lankford, deputy state education commissioner and a former superintendent at the Webb City School District, assured lawmakers that many local schools were indeed financially pinched.

Last August, the Missouri Department of Elementary and Secondary Education surveyed schools about the impact of state and local budget cuts for the 2010-11 academic year. Of the 319 school districts that responded, 88 percent said their budgets had been reduced from the previous year, and 83 percent said they had reduced their staff, according documents provided to The Associated Press.

School administrators, given anonymity by the survey, complained: "We are cut to the bone and the only area to really make a financial difference is cutting staff," "We will not buy buses" and "This is the first year in well over 15-20 years that this district had no summer school." Their comments referenced numerous specific cuts.

Cuts are exactly what some senators say must occur, especially because Missouri is only starting to recover from a couple of years of declining tax revenues. Sen. Jim Lembke, R-St. Louis, is one of those who want Missouri to say 'no' to the federal education dollars; he contends the money is merely driving up the federal debt.

But budget leaders for the House, Senate and governor all say it makes little sense to reject the federal education money because it would merely be redistributed to other states — not go toward paying down the federal debt.

"You can make a statement by not taking the money, but by doing that, all you're doing is penalizing grade-school kids," said Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia.

Schaefer would prefer to deposit the $189 million federal payment in a state fund, then save it to distribute to schools during the next state fiscal year, which starts July 1.

But that may not be allowable under the federal law, which requires the money to be awarded to local elementary and secondary schools for the 2010-11 school year.

House Budget Committee Chairman Ryan Silvey, R-Kansas City, has filed legislation that would use the federal money this school year. Part would make up for revenue shortfalls in other school funding sources, such as casino taxes. But most of the federal money would be used to supplant other funds budgeted for schools, freeing up about $152 million that could be saved and given to schools next year.

South Dakota has done something similar with its $26 million allotment under the federal law. So have some other states.

The National School Boards Association, citing concerns that states weren't following the spirit of the law, asked the U.S. Department of Education last October for guidance on whether such fund switches are allowable. The school board group says the federal agency hasn't replied.

That silence is being interpreted as acceptance by some officials in South Dakota, and now in Missouri as well.

"Certainly the spirit of the law is that the money would be spent on education," Silvey said. "To think that the federal government is going to come and say, 'No you can't,' I doubt it."

Nixon's budget director, Linda Luebbering, said some concern remains about whether the fund switch could run afoul of a federal prohibition against using the money to supplant state funds in a manner that finances a rainy-day fund. That's one reason she says Nixon came up with the more complicated plan of using the federal money to boost school aid this year, then enacting a larger cut in aid next year and asking schools to carry over some of their money to make up the difference.

But, Luebbering added, "we're working with the House and Senate. If there's a different way of doing this, we're very interested in coming to some agreement."

By now, it's probably too late for the federal money to restore jobs during the current school year. But the money could still help schools avoid future cuts.

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