Trust fund education bill gains OK during first voting

Wednesday, February 12, 2003

JEFFERSON CITY, Mo. -- The centerpiece of the House Republicans' legislative agenda -- equal distribution of gambling revenue to public schools -- won first-round approval after six hours of debate Tuesday.

The bill, which passed on a voice vote, would treat the $205 million a year Missouri generates from legalized gambling as extra money for schools instead of being distributed through the complex formula designed to ensure equitable funding between rich and poor school districts.

Gambling revenue would be phased out of the formula over five years and placed in a newly created Classroom Trust Fund. The money would be given to local districts on a per pupil basis.

However, that would begin to take place no sooner than the 2004-2005 school year and then only if the equity formula is fully funded. Because of the state's budget problems, the formula isn't currently fully funded and isn't expected to be in the near future.

Formula held harmless

The bill's sponsor, House Speaker Pro Tem Rod Jetton, said the safety net provision that sets full funding as a condition before the trust fund is triggered should mollify lawmakers worried about their districts losing money.

"This is not going to take any money from the formula and is actually going to be money on top of the formula," said Jetton, R-Marble Hill.

Democrats predicted financial reality would prevent the removal of gambling money from the formula from ever happening.

"It looks to me like we are going to make a new promise about the foundation formula that is doomed to be broken," said state Rep. Chuck Graham, D-Columbia.

If full funding were to be achieved for the 2003-2004 school year, the state would have to come up with an additional $415 million.

Jetton said a final vote to send the measure to the Senate would likely occur today or Thursday.

Though a priority of House Republicans, the legislation's future in the Senate is less certain. Although the GOP is in control in both chambers, some key Republican senators have expressed concerns with the bill.

Gov. Bob Holden, a Democrat, has indicated he will veto the measure should it clear the General Assembly.

Trust fund supporters said Missourians expected gambling proceeds to be additional money for education when they legalized casinos in the 1990s. They claim that money instead supplanted general revenue that otherwise would have gone to schools.

Opponents said treating that revenue stream separately would threaten equity and spawn a lawsuit similar to the one that led to the current formula.

"Every time we take a dollar out of the formula, it creates a disparity," said state Rep. Rick Johnson, D-High Ridge. "That is what got us in trouble in the first place."

1993 decision

In 1993, Cole County Circuit Court Judge Byron Kinder found that the distribution system then in place was unconstitutional as it favored wealthy schools at the expense of poor districts.

Since local property taxes drive education funding, districts with higher local property values tend to get a better return per penny of tax. The current formula basically equalizes the total amount of money districts receive per penny of property tax by increasing state aid to those with lower property values.

Republicans dismissed concerns about damaging equity.

Under the current version of the bill, all 524 Missouri school districts would get additional money if the trust fund was ever triggered. However, the change has been of particular importance to the 48 so-called "hold harmless" systems like the Cape Girardeau School District. Those districts would have lost money under the formula but were allowed to continue to receive funding at 1992-1993 levels.

The trust fund couldn't have been triggered until the 2006-2007 school year under the bill's original language. However, a floor amendment moved the potential trigger date up by two years.

The bill is HB 288.

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