Districts have funding option: levies

Sunday, October 28, 2007

The $3.2 million that has been spent by Missouri school districts in a legal battle to get more state funding has been lamented in this space before. Now that a judge has ruled the lawsuit pursued by about half of the state's 524 public school districts has no merit, the districts are considering an appeal to the Missouri Supreme Court. They would better serve their students and the local taxpayers who support them by spending their money on textbooks and facilities.

Cole County Circuit Judge Richard Callahan ruled recently that all of the tests by which the suing districts hoped to prove the state has failed to provide adequate school funding were without merit. More than that, the judge concluded: "The evidence demonstrated that the state exceeds the 25 percent requirement [of the Missouri Constitution] under every reasonable method" of calculation.

One of the witnesses in this trial was Joesph Haslag, a research fellow at the Show-Me Institute, a public-policy think thank that keeps tabs on Missouri government. In a blog posted on the institute's Show-Me Daily Web site, Haslag discussed his computations of the Missouri Legislature's obligation under the constitutional expectation that the state will direct 25 percent of its revenue to public schools. His calculations show "the state has spent more than 35 percent of its discretionary budget on K-12 education in each of the last three years."

(Missouri's basic funding for schools this year is $2.8 billion. The school districts in the lawsuit would like $480 million to $1.3 billion more.)

Haslag also ponders whether the suing districts' expense of $3.2 million on legal fees was worth the gamble. "From the school districts' perspective, the return is negative 100 percent, so far," he said in his blog. However, "I cannot accurately forecast how this trial will affect Missouri's legislature. Hence, it is possible that the school districts will realize significant gains in the future."

If legislators have been moved by the lawsuit to increase future school funding, the immediate concern would be a basic question: Where will the additional funding come from? Highways? Social services? Construction projects? Prisons?

There is another source of additional funding for school districts: local tax levies.

A review of the levies in area school districts that were part of the lawsuit shows two of them, Woodland and Zalma, have local levies at the lowest rate allowed: $2.75. (Levies are for each $100 of assessed valuation, which is 19 percent of market value for residential property. Thus, a $2.75 levy on a house with a market value of $100,000 would be $522.50.)

The maximum school levy currently allowed in Missouri is $6, but no district in this area comes close to that. The highest levy among local districts is Cape Girardeau's $4.16. The Cape Girardeau district was initially part of the lawsuit but opted out two years ago after a change in the state's school funding formula increased the flow of money to the district.

Here are the levies for local districts, by county, that are still plaintiffs in the lawsuit:

Bollinger County -- Meadow Heights $3.10, Woodland $2.75, Zalma $2.75.

Cape Girardeau County -- Delta $3.63, Jackson $3.80.

Scott County -- Chaffee $4.02, Oran $3.50, Scott City $3.24, Scott County Central $3.89, Scott County R-4 $3.17, Sikeston $3.44.

Stoddard County -- Bernie $3.24, Bloomfield $2.75, Dexter $3.32, Puxico $3.54, Richland $3.60.

None of Perry County's districts are part of the lawsuit.

So why aren't school districts asking their voters to approve levy increases? One reason is because it's hard enough to get voters to approve bond issues for buildings and other needs. Some school districts reason that increasing the local levy would doom any future spending projects.

But districts like Cape Girardeau's have demonstrated that it's possible to win voter backing for well-planned levy increases when the revenue is targeted for something specific like bringing teachers' salaries in line with other districts in the area.

Missouri's school funding formula at times seems even more complicated than the IRS Tax Code, and districts have a right to be diligent about how the formula is being applied. But districts that want more money to spend have the option of turning to local taxpayers rather than authorizing millions of dollars for lawsuits.

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