Missouri schools prepare lawsuit for funds

JEFFERSON CITY, Mo. -- A decade ago when a circuit court judge famously declared that Missouri schools ranged from the "golden" to the "god-awful," state lawmakers overhauled the system for funding public schools to ease the financial disparity between rich and poor districts.

Although they achieved that goal at first, the gap between the haves and the have-nots today is greater than it was in 1993. As a result, another lawsuit is in the works to challenge the system.

Gene Oakley, who as superintendent of the Greenville School District at the time played a prominent role in the earlier lawsuit, said state mandates are one reason school districts are struggling financially and considering additional legal action.

"They gave us money and required new standards. Now they've taken the money away and still require the new standards," Oakley said. "Something needs to be done about that."

Oakley, the Carter County presiding commissioner, is retired from education but is advising the districts preparing to sue the state.

He said more than 100 districts are ready to sign on to the lawsuit, which he expects to be filed in the fall. Though a number of those districts are based in Southeast Missouri, Oakley declined to name them.

While the earlier effort focused on equity -- ensuring that slices of the funding pie were fairly distributed -- the latest legal action is expected to also seek to address adequacy -- increasing the size of the pie.

Equity has always proven tough to define. Under the last rewrite of Missouri's education funding distribution formula, school systems with strong local tax bases, such as Cape Girardeau, had their per-pupil share of state funding largely frozen so money could be shifted to districts that couldn't raise sufficient revenue locally.

However, the affected districts have long characterized the denial of increased state aid as unfair.

Exactly what constitutes adequacy in funding is even more nebulous.

During fiscal year 1993, the last before the distribution system was changed, the total budget for the Department of Elementary and Secondary Education was less than $2.46 billion. Since that time, the department's budget has grown 85.1 percent to more than $4.55 billion for the current fiscal year.

Despite that growth, some contend the state's financial commitment to public schools still isn't as strong as it should be. Because of the state's financial problems, lawmakers have been unable to provide additional money to maintain "full funding" as defined by the formula in the last two state budgets. Current appropriations for DESE fell about $100 million short of what had been approved for the previous fiscal year.

Gerri Ogle, the associate education commissioner for financial services, said the department has never attempted to define adequacy, a determination that is ultimately a question for the judicial branch.

While a circuit court declared the state's old funding scheme unconstitutional, legislative action to fix the system occurred before an appellate court had an opportunity to weigh in and issue a definitive and binding interpretation.

"The Supreme Court never did uphold or rescind the lower court's decision," Ogle said. "It really never said state funding was equitable, adequate, appropriate or anything."

The Missouri Constitution requires a minimum 25 percent of state revenue to be earmarked for education. Lacking court guidance, Ogle said determining exactly what is "state revenue" would require making a number of constitutional assumptions that may or may not prove correct.

Dropping percentage

In the current budget, 36.5 percent of net general revenue, the state's most discretionary funding source, goes to DESE. That is a drop from 42.2 percent in FY 1993, although actual general revenue going to the department has risen by nearly $1 billion.

However, approximately $1.16 billion of DESE's budget comes from "other funds," which include gambling revenue, taxes earmarked for education, cigarette taxes and numerous other sources.

Some of that money could be considered "state revenue" while other portions wouldn't, which makes calculating the department's constitutional percentage difficult, Ogle said.

State Sen. Harold Caskey, D-Butler, said lawmakers traditionally have assumed a minimum 25 percent of general revenue for education achieves constitutional compliance. But Caskey, one of the key architects of the current funding formula, said a strong argument could be made that even special revenue sources such as those earmarked for transportation and conservation are "state revenue" for the purpose of determining education's minimum share.

"I would do that if I was drafting the lawsuit to get a clearly defined statement from the court as to what the constitutional requirement actually means," Caskey said.

The constitutional issue aside, Caskey said it is possible to quantify what constitutes adequate funding by examining the educational standards set by DESE.

"Whatever the costs of meeting those standards are would give you the level of adequacy," Caskey said.

A special legislative committee is slated to study the funding issue in the coming months to prepare a proposed new formula for consideration by the full Missouri Legislature. However, with 2004 being an election year and the state's budget problems expected to be worse, enacting a new formula is anticipated to be a difficult task politically.

mpowers@semissourian.com

(573) 635-4608