Officials criticize tax-based funding

Unequal allocations to schools can hinder districts, they say.
Thursday, April 8, 2004 | 12:00 a.m. CDT; updated 8:11 p.m. CDT, Friday, July 4, 2008

JEFFERSON CITY — State education officials said Wednesday that increased local support through property taxes as a result of Tuesday’s statewide voting could increase funding inequities.

Of 114 school districts asking voters to go to the polls Tuesday, 54 approved tax raises and 31 approved bonds for construction. Columbia voters were asked to approve a bond issue only, which they did.

The problem lies in the formula itself, which rewards local taxation effort with more state aid. Generally, the higher the tax rate a school district sets, the more money it can receive — a concept known as “matching.”

But for those districts not increasing their rate, the pot of available money could shrink and their aid levels could, in turn, fall.

“It could potentially reduce equity,” said Missouri Department of Education Commissioner D. Kent King.

This potential consequence highlights the complexity of the public school funding debate currently raging in the House and in a lawsuit filed in January by more than 200 school districts alleging that the formula doesn’t do it’s job.

Increasing property tax can't aid ineffective formula

Widespread property tax increases would not help the already troubled formula become more effective in how it distributes state money, Senate Education Committee Chair Bill Foster, R-Poplar Bluff, said.

“This (increased taxation) would put a lot more pressure on the formula,” he said. “Local revenue increases would ask the formula to divert more, and the formula becomes more and more in peril as taxes rise.”

The state’s current funding setup was built in 1993, upon the tails of a lawsuit challenging the previous method’s fairness. The use of “matching” funds, based on local effort, was thought to encourage a more equitable way of distributing money, said Sen. Charlie Shields, R-St. Joseph, who chaired a committee tasked with revising Missouri’s public school funding methods.

But in this case, he said, equality might be at risk.

“Districts passing these levies will receive a greater share (of state aid), and those not will get less,” he said.

More money needed to fully fund formula

Another potential problem, officials said, is that the total amount of money needed to put the formula at its “fully funded” level would increase, as more local effort requires more state matching money.

At the “fully funded” level, it is thought the formula would function perfectly, distributing aid to schools that need it most.

The formula is funded at about 89 percent of what it ideally should be. Earlier in the year, several education committees heard that it could take additional hundreds of millions of dollars to reach 100 percent.

This complex problem with Missouri’s funding formula, Foster said, highlights why it is vital that the formula gets rewritten quickly.

“It’s time to get the school system back on track,” he said.

Despite the potential impact on the Foundation Formula, though, Missouri educators said they were glad to see some concrete support for public education.

“Of course we’re pleased to see support in a time of need,” said Missouri National Education Association lobbyist Otto Fajen. “But I don’t think anyone is pleased that we’re even in this situation.”

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