BUSINESS UNITS OPPOSE TAX PLANS

THE FUNDING DILEMMA IN HIGHER EDUCATION

(Second in a series)

As legislators debate this week whether to place a record education tax-increase proposal on the November ballot, the question lingers over what Missouri's education priorities should be.

Lawmakers, business leaders and school officials have reached a consensus that an education tax is necessary, but the size of the tax and whether it should primarily fund elementary and secondary education or higher education still is a matter for debate.

A $456 million Senate bill, proposed by President Pro Tem James Mathewson, D-Sedalia, has been increased to $750 million in the latest House substitute of the bill.

The House bill would provide $300 million each for higher education and elementary and secondary education. Mathewson's Senate Bill 353 has proposed more modest allocations, particularly for elementary and secondary education.

But Gov. John Ashcroft has joined some state business groups in opposing both measures, saying they are too large and don't do enough to address the need for education reform.

Bob Knuth, executive director of the Taxpayers Research Institute, a division of Associated Industries of Missouri, said his organization is opposed to both bills. Knuth said AIM and the state Chamber of Commerce consider primary and secondary education a priority over higher-education funding.

"There's too much emphasis on higher education and not enough on elementary and secondary," Knuth said of the proposals.

Jo Frappier, president of the state chamber, said the business community failed to seek agreement on which level of education should be funded with a tax hike.

"We felt that we should proceed from the beginning and do primary and secondary education first," he said. "Higher education clearly has a better lobbying force than primary and secondary do.

"But the business community failed because we never got together and said: `Let's agree on what we're going to do now. Which level of education are you going to work on and what price tag are you going to set?'"

Frappier said the state chamber also has actively lobbied to keep an education tax increase below $300 million.

Ashcroft has said he would lead the way for new funding if the General Assembly agreed to longer school years and other education reforms.

"More classroom time would give Missouri students a significant boost in academic achievement and competitiveness," the governor said. "It is neither the only thing we need to do nor perhaps even the most important thing, but it would permit improvements well worth its costs."

Ashcroft said that neither Mathewson's or Griffin's bills go far enough in the area of reforms.

"If we're going to try to have some excellence, we're going to have to make some tough decisions," he said. "I believe the amount of money in both versions is excessive; it places a monumental burden on taxpayers."

The governor said reforms are needed to provide a state funding system that rewards schools for being productive.

Ashcroft said he disagrees with those who say that increased funding will automatically lead to education reforms. "More evidence supports the contrary view that plentiful funds discourage self-examination, while conditioning funds on requirements of reform and performance can be a powerful incentive for improvement."

The governor said he is opposed to providing increased funding for "business as usual" in education.

Ashcroft said he has been wrongly characterized as being an opponent of teachers and education.

"We've got great teachers," said Ashcroft. "The whole debate has mischaracterized my position; I want to free teachers to teach.

"Some of the reforms would be to try to get us to be performance oriented instead of process oriented," he said.

Ashcroft said that while total enrollment in public schools has declined over the past decade, total spending on state aid to public schools has more than doubled.

State spending for elementary and secondary education has climbed from $748 million in fiscal year 1982 to about $1.7 billion in the current fiscal year, state budget figures show.

Ashcroft said he's not against higher salaries for teachers, but any increased state funding needs to be tied to reforms.

In the mid-1980s, he said, some school teachers in Missouri were making as little as $8,000 a year. "As a result of the Excellence in Education Act, which I signed, there is no public-school teacher in the state of Missouri now earning less than $18,000 a year," said Ashcroft.

The average salary for a Missouri public-school teacher is now more than $28,000, he said.

Ashcroft said Griffin's bill makes only "gestures toward reform."

But Griffin has said Mathewson's $456 million proposal isn't enough to get public-school and higher-education interests to cooperate in passing the proposal at the polls. Also, public-school officials argue that, although a longer school calendar is absent from either bill, there are clear reforms contained in the tax proposals.

Terry Stewart, an assistant commissioner with the Missouri Department of Elementary and Secondary Education, said, "I think there is a significant amount of reform that has already been enacted in previous legislation but has not been adequately funded, and a significant amount of reform in this legislation."

Griffin's bill would fund programs dealing with at-risk children. "There is an increased funding for the Parents As Teachers program," Stewart said. "There is increased funding for adult basic education to combat adult illiteracy."

There would be funding for expansion of vocational-technical programs and money for a minimum salary program for teachers, Stewart said.

School districts across the state are facing a funding crisis, Stewart said.

"We have now over 300 school districts that are deficit spending," he said. That's more than half of the state's 543 school districts.

Stewart said about 90 school districts are deficit spending in more than one fund. "Sixteen or so are flat broke," he said. "They ended last year in the hole."

The financial woes are affecting both urban and rural school districts. One suburban school district in eastern Missouri, with a total enrollment of 5,000, currently has a $3 million deficit, Stewart said.

Faced with tight finances, school districts either must obtain additional revenue or cut programs and services to children. "I'd say a great many of them are telling you they are making budget reductions," said Stewart.

The Griffin bill would increase funding for higher education from $248 million to $300 million and preschool, elementary and secondary education from $184 million to $300 million.

The House committee bill includes some reforms, but doesn't include major reforms called for by business groups and Ashcroft, including the governor's recommendation that the school-year calendar be extended from 174 days to 200 days.

Mathewson said a conference committee will address the issue of which reforms should be included in the bill.

"It's something the governor should play a role in," he said.

Mathewson said his bill has a strong focus on accountability in the entire education system.

The new tax burden created by either Mathewson's or Griffin's bill would be shared by businesses and individuals.

Altogether, Griffin proposed spending $120 million for public-school programs compared to $79 million in Mathewson's bill. The speaker proposed spending $300 million for colleges and universities compared to $248 million by Mathewson.

Another $110 million would be earmarked for increasing the state's foundation formula, through which it computes basic school aid, compared to $35 million in the Senate bill.

It's unclear what final proposal will clear the House and Senate conference committee, but lawmakers have said it likely will be a compromise tax increase of $500 million to $600 million.

Any tax increase proposal would be placed on the November ballot.

(Tuesday: A look at a changing budget at Southeast Missouri State University and what revenue from a tax hike could mean to the school.)