Schools lose state money for textbooks

Saturday, September 6, 2003

When Cape Girardeau School District officials decided to delay the purchase of textbooks this year to save money, they thought it would bring some relief to a starving budget.

Now, even the money they thought they were saving has been cut.

Officials in both Cape Girardeau and Jackson school districts recently received word that they'll lose around $80,000 each this year in free textbook funding from the state.

It's just another drop in a bucket already threatening to overflow as local school districts also face millions of dollars in cuts to regular state aid this year.

The state's free textbook fund, which schools use to purchase instructional supplies, library books and, of course, textbooks, comes from an annual tax on insurance companies that do business in Missouri but have out-of-state headquarters.

In what state officials say may be the biggest decrease in the fund's history, the amount available to Missouri's 524 school districts dropped from $83 million last year to $66 million this year.

Money from the textbook fund is distributed on a per-pupil basis every year in late September. By that time, most districts have already purchased supplies for the year and therefore have already spent the money anticipated from the fund.

In Cape Girardeau, officials had decided as a cost-saving measure to delay textbook purchases and instead transfer the free textbook funding to the regular operating budget.

Because that money is earmarked by the state for specific purchases, it cannot be transferred to the general operating fund until the end of the school year.

According to chief financial officer Rob Huff, the district normally receives between $330,000 and $370,000 in free textbook funding each year.

Huff budgeted $340,000 this year for the free textbook fund, but the district will get only $260,000. That averages to about $65 per student for the entire year.

"It seemed a safe amount going in," Huff said. "There just wasn't a precedent for this, so there was nothing to help us predict that this might happen. No one had even talked about the possibility of that money being cut."

Huff said the $80,000 will either be cut from somewhere else in the budget or will come from the district's limited reserve fund balances.

Steady increases

Gerri Ogle, associate commissioner of administrative and financial service with the Missouri Department of Elementary and Secondary Education, said the free textbook fund cut was especially surprising because that money had been steadily increasing over the past few years.

From 2001-02 to 2002-03, the fund jumped from $71.7 million to $83 million. For this school year, that amount fell to $66 million.

"It's not a big source of revenue for school districts, but at this point, any cut creates the need for more belt-tightening," Ogle said.

Insurance companies not based in Missouri initially pay the taxes based on estimates of revenue generated by policyholders in the state. When the actual figures are calculated, the state determines whether the companies owe more or are entitled to a refund.

Ogle said the drop in textbook fund revenue this year was the result of more refunds being paid out and more companies taking advantage of tax credits.

The Jackson School District had already ordered supplies and books for the year when assistant superintendent Jim Welker learned of the textbook fund loss.

Jackson normally receives between $400,000 and $425,000 annually in free textbook funding, and Welker had budgeted for $420,000 this year.

The district will only see around $340,000 of that, which comes to around $75 per student. That's on top of the $1.4 million loss in regular state aid the district is expecting this year.

To make up the deficit, money will have to be taken from the district's already-tight operating funds, Welker said.

"With as much bad news as we've heard in the past several months, this was just another hit. They just keep coming," Welker said.

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