Formula aims to fix state’s gap in funding

At least $6,117 would be spent per pupil under the proposed formula.
Thursday, April 21, 2005 | 12:00 a.m. CDT; updated 7:23 p.m. CDT, Wednesday, July 9, 2008

Revamping the formula used to distribute state money to schools has been a long and winding road for Charlie Shields, the Senate floor leader who served 16 years as a school board member.

Shields’ proposal, which cleared the Senate last week, calls for school districts across the state to spend at least $6,117 per student and would base state support on the characteristics of a district’s students rather than tie it to local property tax receipts.

Lawmakers say the current formula is vulnerable to inequity when under-funded, as it has been since 2001, and is impossible to fully fund now. Several years of budget shortfalls have resulted in a $700 million funding gap that lawmakers predict will increase to $1.2 billion in five years.

“We will never, ever fully fund the formula,” said Shields, R-St. Joseph.

Sen. Chuck Graham, D-Columbia, said Republican mistakes created the problem.

“Two years ago, when the Republicans took the House over, I warned them that if they fell behind in funding the formula, it would be very difficult to make that up,” Graham said.

Wide differences in per-pupil spending — from $4,400 to $14,000 — has emerged in public school districts across the state.

Shields said he knew his plan would not satisfy everyone but that it spreads money to districts based on the actual costs they incur to educate children.

“I’ve dealt with school superintendents all my life, and if someone is getting $13 million and someone is getting $1 million, then the one getting $1 million is going to say that this isn’t fair,” he said. “The most dangerous place to be is between a school superintendent and a dollar.”

Opponents of Shields’ plan point to the large tax increases that accompanied the creation of the foundation formula in 1993 and question why no such funding mechanism is included with Shields’ bill.

“We need a real funding source where we can say how we’re going to get this money for our schools,” Sen. Joan Bray, D-St. Louis County, said. “Otherwise, it’s just hocus-pocus.”

Shields said natural economic growth, along with higher loss limits at casinos and increased taxes on casinos’ gross receipts, should provide sufficient funding, but he argued that the formula and funding should remain separate. Republicans, including Shields, have opposed these funding mechanisms in recent years, and some who voted for the new formula in the Senate said they will continue to oppose higher loss limits.

Changes to the current funding formula, if passed, would include:

  • It would cost an additional $690 million over five years.
  • It would set $6,117 as the minimum per-pupil spending in public school districts.
  • It would give additional money to districts whose numbers of students in special education, with low English proficiency and in free- and discount-lunch programs exceed the state average for the best-performing districts.
  • It would include extra funding for districts in counties that have higher average wages than the state average.

The Columbia delegation in the General Assembly has criticized the plan because it would require Columbia Public Schools to become a hold-harmless school district. These are districts that require a separate calculation to ensure they receive more money than they receive under the current formula.

But Rep. Ed Robb, R-Columbia, said this distinction would effectively cap state-funding increases for Columbia at about $1.4 million every two years.

Graham said he favors fully funding the existing formula over creating a new one. He has presented simulations from the Missouri Department of Elementary and Secondary Education showing that Columbia would receive almost $15 million less under Shields’ formula — if it were fully funded — than it would under a fully funded existing formula.

Shields, however, dismissed these simulations because they presume the budget for 2007, when the formula would begin to be implemented, would allocate an extra $600 million for education. That would be a tall order. By comparison, the House’s version of the 2006 budget calls for only a $113 million increase.

Some legislators have also aggressively protected regional interests, especially for property taxes and assessments of property value.

Shields’ plan previously required a certificate of value to ensure accurate property value assessments while limiting the extra funding going to counties with the greatest wage averages. Removing the restriction on extra funding mainly helps the Kansas City and St. Louis areas but adds $15 million to the cost.

Rural lawmakers, however, adamantly opposed a certificate of value; Shields said he removed the provision because “it doesn’t move money in the formula.”

The change drew fire from Graham and senators from St. Louis and Jackson counties. Several St. Louis County senators complained that rural areas receive more state support because they under-assess property.

“My citizens are being discriminated against because they assess their property correctly,” said Sen. Tim Green, D-St. Louis County.

Local property taxes are subtracted from the amount of state money a district receives. Shields’ formula would be calculated on the assumption that each district’s property tax levy is $3.35. This helps districts with higher levies because less local funding is subtracted from state aid than those districts actually generate.

With three weeks remaining in the session, testimony on Tuesday night in the House committee assigned to the issue focused on Senate amendments that opponents said did not relate to school funding. Chairman Brian Baker, R-Belton, predicted a vote would come Monday.

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