Holden frees education funds

JEFFERSON CITY, Mo. -- Area school officials said Gov. Bob Holden's action Tuesday to release $83 million he previously withheld in state education spending as a budget-balancing measure will provide welcome relief, although they remain concerned about their financial futures.

The governor's move was made possible after the federal government agreed to move up a Medicaid reimbursement that Missouri otherwise wouldn't have received until the next state fiscal year.

The extra federal funds allowed state general revenue to be shifted from Medicaid to education. Public school districts will get $75 million and higher education $8 million.

The exact amounts that will flow to individual area school districts won't be known for several days. Southeast Missouri State University will get back a little more than $412,000 of the $1 million Holden withheld from its appropriation in the summer.

"That is wonderful, and we are very pleased," said Southeast president Dr. Ken Dobbins. "That will help us balance this year's budget, but it is not going to do it all."

The university still has a $1 million shortfall in this year's budget, Dobbins said, since the money restored by the governor is from one-time funding and not part of the school's base budget. Cuts approved by Southeast's board of regents last month won't be changed by the governor's decision since the cuts came from the school's base budget, Dobbins said.

Perry County School District superintendent Beverly Schonhoff said the governor's action will ease some financial woes. The district gets more than half of its budget from the state.

"We have truly learned the benefit of careful budgeting, and that is probably a good message," Schonhoff said.

Jackson School District superintendent Ron Anderson said the money will allow the district to avoid dipping into its reserves as much as planned. However, he is worried a shortfall in next year's state budget, which has been estimated as high as $1 billion, will lead to further reductions.

"That is a major concern to districts like ours that get a lot of state aid," Anderson said.

Districts such as Cape Girardeau that receive most of their money from local sources will still get a share of the released funds, though proportionately it won't be as much as school systems that are more dependent on the state.

Holden, a Democrat, repeated his call for additional state revenue, though he didn't say if he will again propose tax increases and other ideas rejected this year by the Republican-led legislature.

"While this is good news for school districts throughout the state this year, it in no way solves the basic budgetary challenge we continue to face in 2004 and that we will face in 2005," Holden said.

The released funds represent a third of the roughly $220 million Holden withheld from education in July to keep the overall budget balanced.

In recent weeks, House Republican leaders have said actual state revenue collections have exceeded expectations during the first months of the fiscal year.

House Majority Floor Leader Jason Crowell, R-Cape Girardeau, said the governor's action was a good first step.

"I now strongly urge the governor to take a further step by releasing the rest of the $222 million withheld from elementary, secondary and higher education," Crowell said.

Holden said it is too early to tell if the state will actually have the revenue to cover the remaining portion of the withholding.

The extra federal money results from a change in the Medicaid reimbursement schedule to the state for "uncompensated care," such as hospitals that treat patients without insurance, said Mary Kahn, a spokeswoman for the federal Centers for Medicare and Medicaid Services. Instead of receiving a payment annually, Missouri will receive a portion of the money quarterly -- something which many states already do, she said.

"It's just an accounting change that has brought them income that they otherwise are entitled to," Kahn said.

Because the federal government has agreed to continue the quarterly payment schedule in future years, this year's financial gain will not result in a loss next fiscal year, Holden said.

The Associated Press contributed to this story.

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