School leaders eye more state funds

A leadership change in the Missouri Legislature and the consideration of a new education funding bill from the House could mean long-awaited financial relief in the state's 62 hold-harmless school districts, including the Cape Girardeau School District.

For Cape Girardeau school superintendent Mark Bowles and other educators in such districts, a change would be welcome. A coalition of administrators in hold-harmless districts and their lobbyists will gather in St. Louis today to discuss their game plan for the upcoming legislative session.

Bowles, who isn't attending the meeting but is a member of the coalition, said the hold-harmless status has created a huge burden for local taxpayers because it has forced the district to increase the tax levy, which now stands at $3.99 per $100 assessed valuation.

"This complex mathematical model isn't working equitably when it requires our local district to pay 70 percent of its education costs," Bowles said.

Hold-harmless school districts receive more state money than they are entitled to under the complex foundation formula used to distribute state education funds. However, their funding is tied to the per-pupil amount they received for the 1992-93 school year -- the year lawmakers last changed the formula.

The Cape Girardeau School District received $739.38 per eligible pupil in state funds during the 1992-1993 school year. In 2002, the district will receive $890.17 per eligible pupil.

That increase is minimal compared with districts like Jackson, which received $1,588.74 per eligible pupil in 1992-93 and $2,877.31 in 2002.

Hold-harmless school districts are not asking to be taken off the hold-harmless list. Under the current foundation formula, those districts would actually lose money if they didn't have the designation. Instead, they're asking legislators to change the foundation formula so that the hold-harmless status no longer exists and they receive an equal amount of state money as other districts.

Currently, the Cape Girardeau School District depends on local funding from property tax revenue to make up 70 percent of its annual budget. In districts that are not hold harmless, the percentage of property taxes making up the budget is much less.

Financial problems for hold-harmless districts have appeared as their status has not allowed them to keep up with rising costs.

Sandy Elfrink, who serves on the Cape Girardeau district's finance committee and is also secretary at Franklin Elementary, said while the district has been blessed with numerous grants to purchase new technology and equipment in recent years, maintenance on those items costs money too.

"The money available to buy things like ink cartridges comes from the regular budget," Elfrink said. "And because our funding for that budget hasn't increased, it's hard to keep up."

"Irregardless of inflationary cost increases, we've been held at the same funding level for several years, and that has really hurt the district," Elfrink said.

Original goal

The original goal of the 1993 foundation formula changes was to equalize overall funding for all Missouri school districts. Districts with a lower guaranteed tax base were given more state funding than they'd previously received, while districts like Cape Girardeau with a high guaranteed tax base -- meaning high property assessments -- were given less than they'd previously received or no additional funding.

To offset the funding losses, those districts with the higher tax bases were labeled hold harmless and allowed to maintain the amount of state funding they received during the year the foundation formula was changed.

According to Richard McIntosh, a governmental consultant for the Hold Harmless Coalition, which represents hold harmless schools across the state, the change to a majority-Republican Statehouse could lead to additional funding for those districts.

It also increases the chance of passing the Classroom Trust Fund bill, which was first introduced in 2001 and calls for money from gambling boats and unclaimed lottery proceeds to be distributed equally on a per-pupil basis, bypassing the foundation formula, to schools to be used for construction, teacher recruitment, professional development, technology and school safety.

According to McIntosh, the basic premise behind hold harmless is that school districts with high assessed valuations are inherently wealthy and can therefore generate more money from local taxpayers.

"It's a misnomer to say they've got easy access to all this local support, because they don't," McIntosh said. "Assessed valuation does not translate to dollars at the schoolhouse door."

Funding lawsuit

During the early 1990s, several Missouri school districts filed a lawsuit over the funding inequities caused by the state's foundation formula, which is used to distribute state education money to Missouri's 524 public school districts.

The result of the lawsuit was Senate Bill 380, also known as the Outstanding Schools Act, which re-wrote the foundation formula and created 62 hold-harmless school districts based on their assessed valuation.

McIntosh said about four years ago, school districts and taxpayers woke up to that fact that the hold harmless status was costing them money.

"We've had relatively low inflation across the '90s, but after ten years, it starts to add up," McIntosh said. "Hold-harmless districts are starting to see some real material differences in their ability to educate kids.

"They're losing teachers to schools on the formula because those schools are better funded now," he said.

McIntosh said most Missouri schools that are on the foundation formula have seen a 50-percent increase in per-pupil funding since 1992. Hold-harmless districts have only seen an estimated 12-percent increase in the past 10 years, he said.

The reason for the unequal growth is a foundation formula that is outdated, some school officials say. This is why they hope lawmakers will take action.

Legislative opposition

In the past, bills to change the foundation formula and adjust the amount of funding hold-harmless districts receive met with strong opposition once they reached the Senate floor, McIntosh said.

"We're very optimistic with the change in leadership we'll be more successful in moving bills out of the House and Senate education committees," McIntosh said.

The Missouri Legislature will face a major challenge during its upcoming session because the current state budget will not allow for a fully-funded foundation formula during fiscal year 2004.

According to Jim Morris, director of public information with the Missouri Department of Elementary and Secondary Education, this means the formula may have to be prorated, with the end result being that not all districts receive an equal amount of money.

The problems created by prorating the foundation formula have some state legislators considering the possibility of re-writing the formula.

"The formula is so complicated and so politically volatile that changing it is always hard," Morris said.

In the past, the foundation formula has only been changed during a year when the state increased education funding. If the Classroom Trust Fund bill passes, Morris said the formula might have to be adjusted to reflect those changes.

Senate President Pro Tem Peter Kinder, R-Cape Girardeau, said the difficulty of re-writing the foundation formula should not be underestimated.

"It's a very knotty, complex and difficult political problem to solve," Kinder said.

Prior to the 1993 changes, Kinder said the formula had not been changed for about 17 years.

While he doesn't believe hold-harmless districts are getting their fair share of funding, Kinder said now is not an optimal time to re-write the formula because of Missouri's current budget crunch.

"A re-write always involves spending more money so that school districts are assured they're not losing funding," Kinder said.

Kinder said he sees the Classroom Trust Fund bill as a very promising means of addressing the problems facing hold harmless districts.

cclark@semissourian.com

335-6611, ext. 128