St. Louis deseg payments take large bite out of state budget

JEFFERSON CITY, Mo. -- Despite a tight budget that's forced cuts in education funding, Missouri must still pay $70 million to the St. Louis Public Schools over the next six years as part of a four-year-old desegregation settlement.

Under the terms of the 1999 agreement, the Kansas City School District was to receive no additional state payments, while St. Louis schools were to receive capital improvement payments on a sliding scale until 2009.

While Gov. Bob Holden was forced to withhold $190 million that had been appropriated for public schools for the budget year that began July 1, the St. Louis School District this year will receive $16.5 million as part of the desegregation settlement above what it receives in basic school funding from the state.

Currently, basic state aid to schools is distributed through a formula that considers such things as local tax levies, property values and student attendance.

Sen. John Russell, chairman of the Senate Appropriations Committee, said Tuesday he remains skeptical about the state's continued financial responsibilities in the St. Louis desegregation case.

Given the current state of the Missouri budget, the Republican from Lebanon said having the additional money could have provided at least a little budget relief to a $19 billion spending package that included $4.55 billion for the Department of Elementary and Secondary Education.

"It would have been real nice to have had that money to spread around the school foundation formula," Russell said. "It would have made a solution to our problems a little easier."

When the settlement was reached in 1999, the state was to pay a total of $180 million over 10 years. The settlement specified the funds could only be used to acquire land or build new schools.

Bruce Ellerman, chief executive officer of Voluntary Interdistrict Choice Corp., which administers the settlement agreement program, said the state payments being made now are far less than they would have been before the agreement.

For example, Ellerman said that additional state payments to the St. Louis School District in 1996 topped $100 million for things such as transportation and support for magnet schools.

"The state is infinitely better off now even with those extra payments than it would have been if a new settlement hadn't been reached in 1999," said Ellerman, who added that the state payments will provide funding to meet growing infrastructure needs in St. Louis.

Gerry Ogle, associate commissioner for administrative and financial services at the Missouri Department of Elementary and Secondary Education, said having the desegregation money in the state budget would have little impact on the overall crisis.

"I would suspect that given the overall state budget problems, this $16.5 million is just a small percentage," Ogle said. "Having that money available would be helpful, but it doesn't go far in addressing the state's overall budget needs."

Last month, the city school board announced a deal with the state attorney general that would allow the district to borrow settlement money to cover general operating expenses, including salaries that must be paid immediately. School officials estimate they could end up borrowing as much as $30 million that would have to be paid back by Oct. 1.

Plaintiffs in the case objected to the borrowing plan but a federal judge refused to immediately stop it because there was nothing that specifically prohibits it in the agreement.

Last week, another federal judge ended a separate 26-year-old desegregation lawsuit against Kansas City schools. The attorney for the plaintiff schoolchildren is appealing the decision.