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Consultant sees ways to better school funding

Funding can be made more equitable without raising new money, professor says.
Friday, January 23, 2004 | 12:00 a.m. CST; updated 6:32 p.m. CDT, Saturday, July 19, 2008

JEFFERSON CITY — A legislative consultant said Thursday that Missouri’s method of school funding can be made more equitable without raising any new money.

Craig Wood, a University of Florida professor hired to help legislators improve the state’s school funding formula, gave a preliminary report to the Interim Committee on Education.

The committee plans to propose legislation to tweak the formula this year, but also plans to rewrite the formula in the next three to five years.

Wood said there are simple ways to shuffle money around within the formula to reduce the spending disparity among school districts. Achieving adequacy of school funding is a tougher task and one that many contend would require significant new revenue.

“Spending in Missouri in relation to other states has gone up, but it’s still below average,” Wood said.

Senate leaders have said their goal this year is to avoid cuts to education funding, but they also don’t plan to pour new money into the system.

More than 240 school districts filed a lawsuit earlier this month claiming the state spends too little on education and distributes aid to districts unfairly under the funding formula.

The formula uses several factors to calculate each district’s state aid, such as local property assessments, tax rates and enrollment. The system is intended to give more state money to poorer school districts, but it has been underfunded in recent years, and a wide spending disparity remains.

In the long term, Wood said, the formula’s focus must shift from property taxes to student needs. Such a revision should establish a base spending level for the average student and adjust for such special circumstances, such as a district’s high cost of living or its population of students with disabilities or trouble speaking English.

Wood said changes in the formula would help send more money where it’s needed most — to small, rural districts and large, urban ones.

Wood also suggested that the state should gradually reduce the number of districts that have been “held harmless” against losses they stood to suffer when the Legislature rewrote the funding formula as part of the 1993 Outstanding Schools Act.

About 50 of Missouri’s 524 districts are taking advantage of the law’s “hold harmless” provision, which lets them continue to be funded at their 1992-93 levels.

Wood proposed that the state allow districts to remain in the “held harmless” category but provide them each year with just 95 percent of the funding they received in the previous year.

The change would save about $150 million, legislators were told. The Department of Elementary and Secondary Education expects to receive $2.54 billion for basic aid to schools this year.

Sen. Wayne Goode, D-St. Louis, said the additional money now provided to “hold harmless” districts was a small slice of the education funding pie.

“I don’t see how that $150 million shift gets you enough to do much,” Goode said.

Wood said the change would immediately free up some money that could be redirected to Missouri’s poorest districts. In the long run, he said, it would give all districts an incentive to adopt the current funding formula as they saw their level of state aid drop slightly each year.


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