When then-governor Bob Holden presented his last budget plan in early 2004, it relied on extra revenue from tax increases that would have required voter approval sometime in the future. The Republican-controlled legislature kept its word by limiting spending increases rather than base a budget on unlikely voter support for tax increases.
When Gov. Matt Blunt unveiled his budget plan early this year, it relied on yet-to-be-determined savings from the future implementation of government streamlining. Again, the GOP leadership in both the House and Senate left no doubt that basing budgets on the unknown wasn't fiscally prudent.
Now the Missouri General Assembly is nearing completion of a new school funding formula that dramatically increases state spending for public schools based on the hopes that tax revenue will increase because of an improving economy and on higher -- but not yet proposed -- taxation of the state's gambling casinos. For some legislators --mostly Democrats -- and others who are knowledgeable about state budgeting, the unknown factors in this school funding formula are cause for concern.
Spending and taxes
When the state legislature last rejiggered the school funding formula in 1993, the plan hinged on a $310 million tax increase -- an increase so large that the state's voters were moved three years later to adopt a constitutional amendment stripping the legislature's authority to increase taxes significantly without voter approval. In 1993, legislators -- Democrats were in control at the time -- were motivated by a lawsuit filed by school districts that challenged the constitutionality of the formula.
Now nearly 300 school districts have joined in another lawsuit, again claiming the way schools are funded by the state is unconstitutional. In plain language, what the districts were saying in 1993 and are saying now is simple: We want more money.
Legislators once again appear eager to satisfy that demand. The task of putting together a funding formula that is fair, practical and affordable is one that almost defies success. But Republican legislative leaders say they have a plan that comes close. And many school officials and educator professional organizations agree.
Much more, not less
Why wouldn't they? The new formula, which is down to the fine-tuning stage, promises that no district will get less money than under the current formula, and all but 41 of the state's 524 districts would get more -- in some cases much more. The Jackson School District, for example, would get $5.9 million more in the 2010-11 school year--when the new plan is supposed to be fully funded -- than it is receiving this year. The Cape Girardeau district's increase would be $3.3 million.
But will the formula ever be fully funded? Look at the record of funding schools in Missouri. The current formula hasn't been fully funded for more than three years -- part of the reason for the current lawsuit. And the whole state has watched as the legislature this year adopted a Medicaid reform bill that reduces the number of Missourians who qualify for assistance. Why? Because without bringing Medicaid under control, it was on course to consume all of the state's general revenue in the not-too-distant future.
The new school funding formula could, if fully funded over the next six years, eat up every dime of increased state revenue unless the state's economy shows more of a recovery than the past two or three years when state revenue has been almost flat, leaving elected officials no choice but to cut many programs just to pay for essential state services.
And the new legislation for school funding leaves many questions unanswered: Will the lawsuit go away if the new plan is adopted? How will money be allocated to school districts if the state's finances prevent full implementation of the new plan?
Even with all of this, there are parts of the new formula that make sense. The formula includes such factors as a district's cost of educating special-needs students and the cost of hiring teachers. There is also language that would affect oversight of charter schools, require more details about administrators' compensation and review how unevenly taxes are assessed from county to county.
With just a matter of days left in this legislative session, there is much work to be accomplished. Let's hope legislators, in their rush to adjourn, will take whatever time is necessary to address the concerns they have raised in their new school funding plan.