HOLD HARMLESS STATUTES PROMPTING TAX VOTES

Some Missouri lawmakers don't want to hear pleas for more state aid from school districts like Cape Girardeau's, which they believe already are receiving more than their fair share.

"It's an issue of equity," said Sen. Harold Caskey, D-Butler, one of many lawmakers who oppose sending more money to communities that have seen their state funding frozen because of a strong local tax base. They believe that indicates those districts are able to foot the majority of the bill for educating local schoolchildren.

Cape Girardeau is one of 56 school districts in the state receiving more state aid than it would be allowed under a complex formula used to calculate the amount of per pupil funding schools receive.

The districts, referred to as "hold harmless" because of their frozen aid status, have found few friends in the General Assembly when they say it's not enough and request more state aid to keep up with increased costs for new programs and inflation.

In fact, the requests for more money have been countered by some lawmakers with demands that the hold harmless designation be removed and the districts receive what the state funding formula says they deserve. They say the small number of schools indicates there's little need to change funding rates.

But officials in hold harmless schools say when the state says no to additional aid, they must ask their communities for the money.

The Cape Girardeau school board will ask voters to approve a 58-cent increase to the operating tax levy during elections Aug. 7.

Schools superintendent Dan Steska said the tax increase would ensure the district continues to provide the quality programs and instruction the community has come to expect. Until the state decides to provide more aid, the district must continue to look locally, he said.

"If you want a more expensive anything, there's always an increased price, and education is no different," Steska said. "If you don't have the equipment, the supplies, the course offerings, you can't expect to provide students with the breadth and depth of quality of education that's offered here."

Nearby Perryville School District, which also is considered hold harmless, will ask voters to approve a 25-cent operating levy increase in August. For Perryville, it would be the first tax increase in more than 25 years.

"It is a crisis in hold harmless schools because our taxpayers are paying and the money we send to Jefferson City doesn't come back to us," said lobbyist Greg N. Johnston of Jefferson City, Mo. He petitions lawmakers to support additional funding for hold harmless schools.

District coalition

Cape Girardeau was one of about 60 hold harmless districts that formed a coalition three years ago to lobby the General Assembly for more state aid.

Johnston said efforts to get legislation passed has been stonewalled by Caskey and other lawmakers.

Two years ago, the state Senate approved legislation that would provide annual cost-of-living adjustments, but the legislation died on the House floor on the last day of the session "for issues that had nothing to do with us," Johnston said.

In the most recent legislative session, debate over a similar proposal became so fierce in the Senate the issue never again made it to the floor.

Caskey, who said at least two school districts in his legislative district are considered hold harmless, said the first priority of state funding is to "equalize expenditures per pupil" and ensure the money doesn't flow back into richer districts.

"When it becomes that inequitable, we're subject to litigation or lawsuit," he said.

But Steska said inequity is in the eyes of the beholder. While the district's state aid has been frozen at nearly the same rate for eight years, they have seen additional mandated special education and other programs, as well as higher standards for student achievement and programs for at-risk students.

Funding formula

The state education funding formula, also called the foundation formula, is intended to provide equal access to state funding for school districts regardless of local wealth.

Districts annually complete a financial worksheet that takes into account enrollment, local assessed valuation, the number of at-risk and poor students and the local tax rate.

All factors are considered using a complex formula, and a number is produced to tell districts how much they should receive in state aid for each student.

If the amount is less than a district received during the 1992-93 school year, the district is considered hold harmless and gets the latter amount.

Programs like summer school and after-school literacy classes, which are money makers for many districts because the state pays double the per-pupil amount due to the increased educational benefit for students, provide only limited benefits to hold harmless districts because of aid restrictions, Steska said.

"Even though it's a little more than the foundation formula would have allocated, it doesn't account for the expectation that our districts will add programs the state promotes and that cost-of-living expenses are going up," he said. "The foundation formula was meant to equal things out, but they really just changed the inequity."

The situation has existed since 1993, when a judge ruled the school funding formula unconstitutional due to inequities in the per pupil funding between school districts with a strong local tax base and poorer districts.

When lawmakers rewrote the funding formula to give poorer districts more state aid, districts like Cape Girardeau -- which had higher local tax collections and were receiving a healthy dose of state aid -- were given a hold harmless designation.

For Cape Girardeau, that means the district is allowed to receive $864 per student whenever the yearly formula calculations say they should receive less. The current per-pupil amount is about $100 more than the original hold harmless level because of a slight adjustment to the formula two years ago.

The district still spends more than a $1,000 less than the state average for per-pupil expenditures.

Local vs. state

Caskey said local taxpayers should be paying the lion's share of the costs to educate their children. And Dale Carleson, director of finance for the Department of Elementary and Secondary Education, said educational spending shouldn't be separated into local and state allotments.

"We don't look at state aid in exclusion of other money. You have to look at them together," Carleson said. "There are few districts that have not benefited from this formula."

Steska acknowledged the need for more money to go into poorer districts, but he said it's unfair to ask local taxpayers to pay the majority of local educational needs and send money to the state for other school districts who don't or won't cover their educational costs.

Johnston said the best chance for additional money could come from a rewrite of the funding formula. Lawmakers will create an interim committee next month to determine whether the formula should be adjusted or rewritten.

Senate President Pro Tem Peter Kinder, R-Cape Girardeau, said any rewrite would probably take several years to accomplish, which wouldn't provide the immediate relief hold harmless districts seek.

"It's a task of such arduous nature that all the planets and stars and moons have to line up," said Kinder.

In the meantime, he said he will continue to support legislation that provides cost-of-living adjustments to hold harmless schools.

Hold harmless districts

These are the hold harmless districts in Missouri for the 2000-2001 fiscal year:

Shell Knob 78

South Callaway Co. R-II

Camdenton R-III

Climax Springs R-IV

Cape Girardeau 63

N. Kansas City 74

Cole Co. R-II

Jefferson City

Washington

Strafford R-VI

South Iron Co. R-I

Belleview R-III

Center 58

Joplin R-VIII

Crystal City 47

School of the Osage R-II

Moniteau Co. R-V

New Madrid Co. R-I

Maryville R-II

Couch R-I

Thornfield R-I

Cooter R-IV

Perry Co. 32

Pettis Co. R-XII

Boncl R-X

Platte Co. R-III

Park Hill

Westran R-I

Centerville R-1

Bunker R-III

Lesterville R-IV

St. Charles R-VI

St Charles Co. R-V

Roscoe C-1

Ste. Genevieve Co. R-II

Pattonville R-III

Rockwood R-VI

Kirkwood R-VII

Lindbergh R-VIII

Mehlville R-IX

Parkway C-2

Affton 101

Bayless

Brentwood

Clayton

Ladue

Maplewood-Richmond Heights

University City

Valley Park

Webster Groves

Scott Co. Central Schools

Bell City R-II

Reeds Spring R-IV

Branson R-IV

Hollister R-V

NE Vernon Co. R-1

Source: Missouri Department of Elementary and Secondary Education