School funding plans have short shelf life
Monday, May 9, 2005
JEFFERSON CITY, Mo. -- Former state Sen. Harold Caskey, a chief architect of Missouri's existing education funding formula, often used to say that such formulas only have a shelf life of about a decade before they become obsolete.
The legislature last did a major rewrite of the formula in 1993. Sure enough, by 2003 most lawmakers acknowledged the system had become constitutionally out of whack.
Public school officials agreed and in mid-2003 began mobilizing to sue the state on claims that the formula provides too little state money that is unfairly distributed among local districts. The suit was filed in January 2004 and remains pending. Nearly 300 districts are participating.
The case served as an impetus for lawmakers to tackle the issue this year. A formula bill has cleared the Senate and is awaiting House action. Gov. Matt Blunt last week gave lawmakers an ultimatum: Fix the problem before the legislative session ends on Friday or be prepared to stay after class and resolve it this summer.
The state currently distributes $2.75 billion a year to local schools through the formula plus add-ons for transportation, special education and other purposes. The latest version of the proposed formula, which incorporates the add-ons, calls for an additional $940 million. The new money, however, would be phased in over seven years and the phase in wouldn't begin until a year from now.
Given the conventional wisdom about the short lifespans of education formulas, some school officials wonder if the proposed system will be nearly obsolete by the time it is fully implemented eight years from now.
"This phase-in is probably because they are worried about where they are going to find the funding," said Ron Anderson, the Jackson School District superintendent. "Good or bad, we don't know how that is going to play out."
Because of a radical change in the underlying principle of the proposed formula, Senate Majority Floor Leader Charlie Shields, R-St. Joseph, said it should maintain its integrity substantially longer than previous formulas.
'It will last awhile'
The funding formula traditionally has been driven by local tax rates and property values. As property values increase over time, the assumptions and calculations on which the formula is based eventually become invalid. The proposed formula aims to distribute funds based on what it costs to adequately educate students in a given district and greatly reduces the influence of property values.
"This one is kind of different in that it's based on student needs and not assessed valuation," Shields said. "It has a built-in growth rate in it, so my guess is it will last awhile."
Under the Senate version, which has undergone House changes, all but 41 of Missouri's 524 public school districts would receive more state aid and none would lose money. Supporters of the legislation have touted those increases as a key selling point.
Many districts, particularly wealthier ones such as Cape Girardeau whose state funding is frozen at 1992-1993 school year levels, would see their share of state funding increase. However, some superintendents wonder whether elementary and secondary schools would really be any better off.
If the proposed formula is fully funded through the 2012-2013 school term, the final year of the phase-in, total state aid to local schools would increase by an estimated $940 million. However, during the last seven years school funding has gone up by nearly $900 million, and the current formula is still about $790 million below full funding.
'We need support now'
Dr. Kenneth Jackson, the Dexter School District superintendent, said the increase lawmakers are discussing basically equates to natural growth districts would expect to see anyway.
"We need support now," Jackson said. "When someone says they want to provide almost $1 billion in growth over seven years, that's not a new amount."
Full funding, however, is whatever the formula says it is. Most lawmakers agree the growth called for by the current formula isn't realistic. But there are also numerous questions as to whether the state can afford the less expensive formula under consideration.
Shields said that by boosting education spending by between $120 million and $160 million a year, full funding can achieved through existing revenue streams. But it would be much easier, he said, if the legislature provided a dedicated funding source.
Shields suggests lifting Missouri's unique $500 loss limit for gamblers and boosting taxes on casino operators. Both House Speaker Rod Jetton, R-Marble Hill, and the governor have ruled out those ideas. Blunt said the state can afford the proposed formula without raising taxes or expanding legalized gambling.
"These are reasonable funding milestones over the course of the next seven years," Blunt said.
Although Blunt downplays the significance of the pending lawsuit, lawmakers hope enacting a new formula would halt the case. The House version would require the lawsuit to be dropped before a replacement formula would take effect. However, Blunt opposes the provision because it could allow a handful of holdout districts to keep the proposed formula in limbo indefinitely.
During the phase-in period, the existing formula, which almost everyone agrees is unconstitutional, would still be partially in place. As a result, Jackson said the issues that prompted the case won't be totally resolved.
"I don't feel like that is going to change minds about the lawsuit," Jackson said. "That increase is so far out in the future, you may receive the money or you may not."
The bill is SB 237.