JEFFERSON CITY — School districts suing to get more state funds lost their first court fight Monday.
A Cole County circuit judge upheld Gov. Bob Holden’s power to withhold $190 million from state funding to local schools because of estimated revenue shortages.
The decision came less than a week after Judge Richard Callahan heard arguments from Kansas City-area school districts charging that Holden’s education withholdings violate the Missouri Constitution. Attorneys for the challenging school districts said that they would appeal the decision.
“We realize that this is a necessary step in ultimately getting the Missouri Supreme Court to render a decision,” said Larry Ewing, Fort Osage School District superintendent.
Holden used the court decision supporting his withholding to repeat his attack on the GOP-controlled legislature.
“While today’s court decision resolved an important legal question, it did nothing to ease the pain of local school districts that are suffering the devastating effects of the legislature’s failure to fund education,” Holden said.
But Republican leaders say that, because of an unexpected growth in revenue collections, the governor’s withholdings no longer are justified.
House Speaker Catherine Hanaway, R-St. Louis County, said that state revenues for the first four months of this fiscal year have been collected beyond expectations.
Withholdings have forced some Missouri school districts to take drastic measures.
“We have reduced teachers, administrators, support staff, cut programs and services, and we’re still going to deficit spend about $1.3 million,” said Ewing. About $3 million in state funds were withheld from Columbia schools for the 2003-04 budget year that began in July.
At issue are two sections in the state’s constitution concerning the governor’s budget powers.
One section prohibits the governor from reducing the public schools budget through his line-item veto powers when signing the education budget bill.
Another section of the constitution, however, gives the governor power to withhold appropriated funds when revenue collections fall below the original estimates.
The school districts argued the line-item veto restriction prohibited withholding funds from education.
However, Callahan ruled that the section in dispute applies only to the use of the governor’s limited “line item veto” powers and does not undermine the governor’s authority to balance the state’s expenses and revenues.
The judge said that the governor has a duty in the event of revenue shortfalls “to spend less than the total amount of any appropriation ... to ensure that the state’s actual expenditures do not exceed its actual revenues.”
In July, Gov. Holden ordered that $190 million be withheld from the Department of Elementary and Secondary Education after administration revenue projections indicated that actual revenue collections would be several hundred million dollars below what would be necessary to finance the budget the governor had signed.