UPDATE: Missouri House budget proposes two-tier school funding

Wednesday, March 5, 2014 | 4:36 p.m. CST

JEFFERSON CITY — A state funding increase for public schools would be partly contingent upon a strong economy under a new spending plan outlined Wednesday by the top budget writer in the Missouri House.

The proposal by House Budget Chairman Rick Stream, R-Kirkwood, seeks to bridge the gap between differing revenue projections embraced by the Republican-led legislature and the Democratic governor.

If Missouri revenues come in as Republican lawmakers expect, Stream's budget would provide a $122 million increase on top of the current $3 billion of basic aid for public K-12 school districts. If revenues meet Gov. Jay Nixon's more optimistic projections, public schools could get a total of a $278 million increase under Stream's budget plan.

"It's a lot of money for education," Stream said. "We basically have taken the governor's recommendation for K-12 funding and put it in the budget."

Nixon had proposed a $278 million increase in basic school aid without any contingencies. But lawmakers have criticized Nixon's proposed budget as overly optimistic.

The 2015 fiscal year begins July 1 in Missouri and runs through the following June 30. Although multitiered budgets have been used in other states, they are not common in Missouri.

Under Stream's plan, school officials would have to wait until near the end of the budget year to know whether state revenues exceed the legislature's projections and thus trigger the additional funding. That means schools probably could not plan on spending the extra money during the 2014-15 school year and could have to carry over the money to the following year.

A Nixon spokesman did not immediately respond to a request for comment about Streams' budget plan.

Stream's proposal, which is to be considered next week by the House Budget Committee, also includes numerous other differences from Nixon's recommendation. Public colleges and universities would get a smaller funding increase in their operating budgets than proposed by Nixon. Instead, Stream would redirect some of that money toward university construction projects that would require the institutions to raise matching funds from donors.

Stream's plan would allot a total of $25 million to fund one construction project at each of the four campuses of the University of Missouri System, with an additional $38 million going to other university construction projects contingent upon state revenues meeting Nixon's higher projections.

Nixon had proposed a $20 million increase in preschool funding and an $8.6 million increase in the state's main financial needs-based college scholarship dubbed Access Missouri. Stream essentially reverses that. He proposes a $20 million increase in Access Missouri funding and $8.2 million targeted only to preschool programs in schools lacking full state accreditation. Stream also proposes $3.5 million for reading programs in those poorly performing schools.

Stream's plan would provide a 1 percent pay raise for state employees instead of Nixon's proposed 3 percent increase.

His budget plan omits Nixon's recommendation to draw down $1.7 billion of federal funds by expanding Medicaid eligibility to about 300,000 low-income adults.

But Stream proposes to add dental coverage for adult Medicaid recipients at a cost of about $17 million in state funds. Adult dental coverage was eliminated when Republicans scaled back the state's Medicaid program in 2005. Stream said the state nonetheless has spent hundreds of thousands of dollars annually to treat dental problems in hospital emergency rooms. He described the provision of dental coverage as "Medicaid reform and transformation."

"All of us have had toothaches and dental problems — it affects our other health, too," Stream said.

Among other things, Stream's budget includes $4 million for Kansas City if it succeeds in winning a competition to host the 2016 Republican National Convention. Stream said the money was requested by Kansas City officials to help them reach a local fundraising goal of $10 million.

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