Education money a factor in Missouri's budget woes

JEFFERSON CITY, Mo. -- For several years after the enactment of the 1993 Outstanding Schools Act, the new taxes imposed by the law raised revenue in excess of that needed to fully fund elementary and secondary education.

Starting in FY 1999, however, those dedicated taxes for the first time proved insufficient to cover the always increasing cost of the complex formula that distributes state education funds to local school districts.

Veteran budget analyst Jim Moody said that fact should have set of alarm bells among lawmakers and education officials. Instead it went largely unnoticed by policy makers.

Lawmakers boosted formula funding by $800 million since 1999 to 2003, while over the same span general revenue collections grew by only $113 million.

Moody told members of the Missouri State Board of Education on Thursday that the days of annual, automatic increases in education funding are over for the foreseeable future and that even maintaining current levels will be difficult with existing revenue.

"It's hard for me to see elementary and secondary education getting virtually anything," Moody said.

Moody said the unrestrained growth in education spending played a large role in contributing to the state's current financial woes.

The school board invited Moody, a lobbyist and former state budget director, to discuss the finding of his recent report on the state's financial problems. In the study, which is cited often in government circles, Moody calls for a 15 percent across-the-board state spending cut.

Over the course of a decade, per pupil state education spending increased 129.1 percent from 1993 to 2003. That translates to a 13 percent increase every year.

"We should have looked at our numbers and asked when is this growth going to halt because you can't sustain 13 percent growth every year," Moody said.

'Somehow, some way'

School board member Patricia Sharp of Kennett told Moody she has great respect for his opinion budget matters but that she believed his solution was too tilted in favor of spending cuts.

"I wish you would advocate for an increase -- somehow, some way -- on the revenue side," Sharp said. "The problem will take a balance of both" reduced spending and new money.

Moody said a tax increase of any significant magnitude is all but impossible, thanks to a byproduct of the Outstanding Schools Act.

The tax increase established by the law at the time was called the largest in state history. Since the legislature enacted it without voter approval, it sparked a public backlash that led to a 1996 constitutional amendment that forces any sizable tax increase on to the statewide ballot.

Recent history shows voters are in no mood for new taxes, Moody said.

Board president Thomas Davis of Kansas City suggested repeal of the amendment to help the state to better cope with its financial problems.

For better or for worse, Moody said the amendment is reflective of the general anti-tax philosophy Missouri citizens.

"I don't think it is repealable," he said.

mpowers@semissourian.com

(573) 635-4608