Education community holds breath on funding

The sweeping financial move by Gov. Jay Nixon on Tuesday has left local school districts watching and waiting to see if the expected increase in their funding will come through.

Scott Holste, the governor's press secretary, said the amount withheld from the foundation formula and higher education represents the increased amount the entities would receive for fiscal year 2015.

"Because of the General Assembly's unfunded tax breaks, failure to act on Medicaid, failure to enact the tax amnesty and counting on tobacco money that won't be there, the governor has had to take these actions to balance the budget. In order to release the restricted funds, the money will have to be there," Holste said in an email.

If the General Assembly overrides the tax break vetoes, it is projected to result in a reduction of up to $425 million annually in state revenue and $351 million annually for local governments, Holste wrote. "The governor's not going to spend money that won't be there," he added.

A veto session will be in mid-September, Holste said. The sessions are conducted if any bill is vetoed late in or after the end of a regular session, according to the Missouri House of Representatives.

For the Cape Girardeau School District, the expected 4 percent bump in the foundation funding formula would mean about $320,000. Cape Girardeau School Board members Monday approved a $53,353,071 budget for the 2014-2015 fiscal year, up from the $50,634,341 budget for 2013-2014. Next year's budget takes effect July 1, just like the state's.

The 2014-2015 plan features an average 2.5 percent across-the-board increase for district employees. Assistant superintendent of administrative services Neil Glass said the governor's action has no effect on paying staff.

Local property taxes are the primary source of district revenue for the Cape Girardeau School District.

At this point, the frozen formula is not affecting Cape Girardeau. "We'll continue to monitor the situation," Glass said, adding if the veto is upheld, Nixon will release the funds and "all will be well."

If not, the district will have to formulate a plan to adjust the budget. The Cape Girardeau School District budget was built around a 4 percent increase in foundation funding.

Last year, Nixon froze about $400 million for education, health care and other programs, releasing the money only after the Legislature failed to override his veto of an income tax-cut bill. This year's round of cuts come after a promise from lawmakers to override Nixon's veto of a slew of tax-cutting bills.

"Unfortunately, this is nothing new for us," Glass said.

If the funds are not released, Glass said the district would have to "take a look at some of those expenditures we have allocated right now and see where we can make cuts.

"It could range," Glass said. "We're not talking about releasing any positions, but we would look at some of our materials and supplies that we'd be able to make it another year without" -- things that aren't essential to instruction.

Wade Bartels, associate superintendent finance/business operations for the Jackson School District, said the district doesn't know how the freeze in the funding formula increase will affect them. The Jackson School Board approved a 2014-2015 budget Tuesday night that included revenue of $45,779,234 and 2.5 percent pay increases for certified teachers, up from the 2 percent that was awarded last year.

District expenses, which include construction of a new elementary school, will run $58,709,748. East Elementary School, 455 N. Lacey St., is being financed with a total of $16 million in bonds, Bartels said.

The 2013-2014 budget was for $43,464,283 in revenue with budgeted expenditures of $59,655,866, including construction of the new campus.

Bartels said the district planned for the funding to be withheld.

"Obviously it's disappointing. ... We sort of anticipated there could be a withholding. There was a withholding last year," he said.

Bartels added the withholdings are not annual events, but things are unpredictable.

"That's why you have to budget conservatively," Bartels said.

Funds for items for Southeast Missouri State University and Three Rivers College were restricted until moneys are available or vetoed, according to information from the state.

Southeast president Kenneth Dobbins said it's been almost a decade since the university has received any capital improvement funds from the state. Projects such as the developmental math labs at Memorial Hall, the Academic Hall restoration and Magill Hall renovation were financed without state support, university officials said.

Three Rivers College president Devin Stephenson, through coordinator of media services Jonathan Atwood, said the veto removed funding that would have matched outside contributions toward the Eastern Campus being built in Sikeston, Missouri. The funds would have given the college an additional revenue stream to service the debt on the bonding Three Rivers has done toward the project.

But the matching funds were not required to finance the Eastern Campus, scheduled to be completed in September, and the debt service on the bonds has already been factored into the fiscal year 2015 budget. The campus will replace the Three Rivers Center at Sikeston, which is operating at maximum capacity.

A proposed program, Three Rivers Southeast Missouri Outreach Program, was vetoed. Atwood said in an email this was an outreach program targeting youths in the Caruthersville, Missouri, area to help with college preparedness.

rcampbell@semissourian.com

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