COLUMBIA — Both returning and newly appointed state lawmakers will have to deal with a contentious, yet vital, issue: how to fully fund the foundation formula that determines how much state aid Missouri's public school districts get.
Lawmakers and Gov. Jay Nixon this year approved more than $3 billion for elementary and secondary education. That amount, however, still falls about $250 million short of what education officials said was required. By fiscal year 2014, the foundation formula will face an estimated $700 million shortfall.
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The formula divides public schools into two main categories known as "hold harmless" and "formula" districts. "Hold harmless" districts are those that rely more on local property taxes and receive the same amount of state aid per student every year. Aid to formula districts, which rely more on state funding, is recalculated every year.
Although Missouri education officials have begun implementing a plan to help fund public schools, the state remains without a long-term solution to the problem.
What candidates are saying
Candidates for local seats in the Missouri House and Senate agreed not only that K-12 funding is a priority but also that the foundation formula is complicated and confusing. Newcomers to legislative campaigns said they will have to look to others with more experience before developing fully informed opinions about what should be done. The consensus among most of the candidates is that the state needs more revenue, but some have suggested the state could throw more money into education by tweaking its budget.
State Senate District 19
Incumbent Sen. Kurt Schaefer (R) said education funding has to be a priority, second only to paying off Missouri's public debt. "You can close the gap (in the formula) with funding from other areas in the budget," said Schaefer, who is the chair of the Senate Budget Committee. Still, he expects stagnant economic growth over the next couple of years will make funding the foundation formula a continuing challenge.
- State Rep. Mary Still (D) said the state could "tinker around with hold harmless and not hold harmless, but it becomes increasingly unfair" to some schools. She would like to look at increasing state revenue and adjusting education funding to find more "viable options" for fixing the funding disparity.
- Mike Becker (R) suggested school districts could save money by not building lavishly constructed schools. "We need to build simple multipurpose buildings. Schools should be a place of education, not a place of glamour."
- Caleb Rowden (R) said lawmakers have to find a way to be "transparent" about how schools are funded and keep pushing to find a proper fix for the formula. Rowden said he's open to finding more revenue, but is "not a big fan of increasing revenues more than you have to."
- Chris Dwyer (R) conceded he knows "very, very little" about the formula and said he would talk to members of the legislature's education and budget committees to learn more. Dwyer also said the state should look at how private and home-based schools manage on smaller budgets.
- Former state Sen. Dennis Smith (R) said lawmakers should take a closer look at the overall budget. "We need to narrow our financial obligations in other parts of the budget and put the extra money into education."
- Former state Sen. Ken Jacob (D) said that the foundation formula is a "major problem facing the state" and that proposed solutions would only be a marginal stopgap. "You can't succeed in a knowledge economy when you rank near dead last in education funding."
House District 45
- Incumbent Rep. Chris Kelly (D) could not be reached for comment. He is unopposed in the primary and in the November general election.
House District 46
- Incumbent Rep. Stephen Webber (D) said the answer "is that we need to fully fund the formula." Because the formula has been underfunded, Webber said Columbia residents are having to pay higher property taxes to fund schools.
- Fred Berry (R) said he would wait until he had the opportunity to speak with state budget and education officials before offering a solution. "You have to look at each element ... this is not something you want to hip-shoot."
House District 47
- Former state Rep. Nancy Copenhaver (D) said that the new formula "needs to be tweaked" and that "it hasn't been doing what it was supposed to be doing" since its inception. "We can't keep cutting money," she said, adding that legislators also must find new revenue streams. "The problem is we don't have fewer and fewer students, we don't have less complicated situations."
- Neither John Wright (D) nor Mitch Richards (R) could be reached for comment.
House District 50
- Incumbent Rep. Caleb Jones (R) said state lawmakers have to make sure "we get students a good opportunity" to attend school and receive an education. He added that it is necessary to reevaluate funding for schools that are performing poorly and "we should give kids the opportunity to go somewhere else (if they are attending a poorly performing school) and take their funding with them."
Explaining the foundation formula
Missouri's foundation formula is used to calculate how much money the state's 559 local education agencies — which include 520 school districts and 39 charter schools — should receive. School systems get additional funding from various statewide and federal programs, but the foundation formula is the main source of money besides local property taxes.
Funding amounts are determined by a variety of factors, including local wealth, student attendance and property tax rates, and a "state adequacy target," established by the Missouri Department of Elementary and Secondary Education, that sets a desired amount of average spending per student each year.
The adequacy target now is $6,131 per student; it was supposed to rise to $6,423 this school year and to $6,716 in fiscal year 2014. Budget woes and lawmakers' inaction, however, prompted the education department to freeze the adequacy target.
State lawmakers adopted the most recent foundation formula in 2005, replacing a previous formula that relied heavily on local property tax revenue as a way to determine how much state aid school districts would receive. The new formula has been phased-in over the past seven years and was scheduled to take full effect this school year.
Chris Nicastro is the state's commissioner of education. She explained the decision to freeze the adequacy target in a May 23 letter sent to Missouri's public and charter schools. "The fiscal challenges now facing Missouri prohibit full funding of the current formula, resulting in the potential of extreme funding shifts for school districts," she wrote.
Past work and the effect on Boone County
Although leaders in the General Assembly touted full funding of education as a top priority for the 2012 legislative session, lawmakers ultimately failed to find a fix due to disagreements over how the legislation would affect school districts. Some worried about the disparity in the impact on urban vs. rural districts, others about the impact on hold-harmless and formula districts.
During the session, Rep. Mike Thomson, R-Maryville, and Sen. David Pearce, R-Warrensburg, sponsored measures intended to fix the funding issues and "minimize the winners and losers." The bills died, however, requiring the education department to step in.
Roger Dorson, the department's coordinator for financial and administrative services, said the "across-the-board" approach meant all school districts bore the burden of the budget shortfall. Deputy Education Commissioner Ron Lankford told the Associated Press in early June that more districts would see cuts rather than increases.
Thomson and Pearce's legislation would have cut less aid from hold harmless districts than formula districts. Still, debate over the fairness of their bills brought them to a standstill.
One-hundred and sixty of Missouri's school districts were considered hold harmless in fiscal 2012. Of the five districts in Boone County, only Sturgeon is hold harmless; Centralia, Columbia, Harrisburg, Hallsville and Southern Boone have formula district status. Columbia and Hallsville used to be hold harmless but became formula districts in 2010 and 2011, respectively.
Regardless of status, every district in the state shared in the lack of funding in fiscal 2013. That means they either suffered cuts or received smaller increases than proposed under law. The Centralia, Harrisburg and Hallsville school districts received slight increases; Columbia and Sturgeon were cut.
Dorson said the freeze is intended to be in place only this year, but the department might be forced to extend it. "We don't know what fiscal year 2014 will bring."
Several potential avenues for increasing state revenue have stalled in the legislature. They included a mechanism that would allow the state to collect taxes on Internet sales, which would generate an estimated $20 million to $40 million annually as well as a $70 million tax amnesty program that would have encouraged people to pay back taxes without penalty. The Internet sales tax was never scheduled for floor debate in the legislature. The House passed tax amnesty, but the Senate held it up.
Lawmakers also have had extensive debates on paring back the state's tax credit programs, but the House and Senate couldn't find agreement. State officials estimate Missouri will redeem $685 million in tax credits this fiscal year.
Pending a legal challenge before the state Supreme Court, Missourians might get to vote in November on whether to increase the state's cigarette tax, which is 17 cents per pack. The 73-cent increase proposed by the initiative would generate between $283 million and $423 million to the state's coffers. The money would be used for K-12 and higher education and for tobacco-cessation programs.
Missourian reporter Jordan Shapiro contributed to this report.
Supervising editor is Scott Swafford.