State audit report says school funding still not equitable

Thursday, April 17, 2003

JEFFERSON CITY, Mo. -- Missouri's formula for distributing aid to public schools is less equitable than a system found unconstitutional a decade ago, a state audit released Wednesday said.

State Auditor Claire McCaskill found that the state aid disparity between wealthy and poor school districts has widened since lawmakers rewrote the funding formula in 1993.

"We have not done a good job of making up the difference between the haves and have-nots," said McCaskill, who gave the formula a grade of "F."

McCaskill also said the formula is too complex and that many lawmakers simply don't understand it -- a situation likely to worsen as term limits force veteran legislators from office.

The state Department of Elementary and Secondary Education uses the formula to calculate and distribute basic state aid to Missouri's 524 public school districts.

Factors such as enrollment, local property tax levies and the number of low-income students are weighed in determining each district's aid. The greater a district's wealth, the less state funding it receives.

The goal is to ensure that all schools receive a similar amount of combined state and local money when compared on a per-pupil, per-tax rate basis.

But McCaskill said that isn't happening, which could open the door to another lawsuit.

Former legislator Gene Oakley was part of a group that successfully challenged the previous formula in court, leading lawmakers to rewrite it in 1993. He said Wednesday there have been talks in recent weeks among educators and attorneys about another lawsuit.

Oakley, currently the presiding commissioner in Carter County, said McCaskill's audit should aid those who want to challenge the formula.

"There wasn't a lot of oversight" following adoption of the current formula, Oakley said, "and gradually the disparity began to grow larger and larger."

Kent King, commissioner of elementary and secondary education, said he also has concerns about the current formula. Budget troubles kept the state from providing the full amount called for by the formula this year, and the aid could fall short next year as well.

"The formula is not meeting equity in the sense that we are funding it at less than the full amount, and the farther we get from that amount the less equitable it is," King said. However, he said, "I would not say this formula is worse than the one it replaced."

But with numerous districts frustrated by their financial situations, King said, "I would not be surprised to see a lawsuit filed in the not-too-distant future."

Sen. Harold Caskey, who sponsored the 1993 Outstanding Schools Act, said any perceived inequities in the formula will have to be addressed by the courts.

"It's probably no longer equitable, but we won't know that until a court makes that decision," said Caskey, D-Butler.

The 1993 law contains what is called a "held harmless" provision, allowing districts to be funded at their 1992-1993 per-pupil level if it exceeds the amount they would receive under the formula.

Districts that are "held harmless" are generally in fast-growing suburbs with low percentages of poor students. Superintendents in such districts say their schools deserve more money than they are provided.

Regardless, because these schools are not funded through the basic formula, they are not as greatly affected by a state funding cut.

Initially, there were just 10 districts considered "held-harmless." Now, 54 school districts are considered "held-harmless" from the reductions they otherwise would receive under the funding formula.

McCaskill said the "held-harmless" districts received a revenue advantage of about $244 million in the 2001-2002 school year -- contributing to the inequity among schools.

Since 1998, some "held-harmless" districts have been receiving money in excess of their 1993 levels because of an increase in state funding for the number of at-risk students they serve.

The Clayton School District, considered "held-harmless" under the formula, had total expenditures of $13,748 per pupil last school year. The McDonald County School District spent a total $4,561 per pupil -- the lowest amount in the state.

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On the Net:

State Auditor: http://www.auditor.state.mo.us

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