CAPITOL REPORT: NEW LOOK AT S.B.380

Even though it's thicker than a pocket dictionary -- and far more complicated -- Missouri's new school reform law, S.B. 380, is already scheduled for revision in the next session of the General Assembly that begins Wednesday, Jan. 5. When the "Outstanding Schools Act of 1993" was enacted earlier this year, it was hailed by sponsors and many educators as the session's premier achievement, one destined to put Missouri on the way to major school reforms.

With the law barely in effect six months, there are already signs that S.B. 380 was flawed, so badly in one case that a loophole threatens to siphon as much as one-half the funding increase. A provision permitting local school districts to convert long-term capital improvement bonds to lease-purchase agreements, thereby becoming eligible for additional state funding, has been targeted for revision by both Gov. Mel Carnahan and several of the measure's sponsors.

Whether the loophole was an oversight, or whether it was purposefully inserted in S.B. 380, still remains something of a mystery. But if allowed to stand, some officials believe it could reduce regular school foundation payments by as much as $400 million a year. While some legislators have denied the loophole was intentional, several critics have noted that an official of the Missouri Department of Elementary and Secondary Education (DESE) informed officials in several districts of the provision and advised them to take advantage of its benefits.

State Sen. Harold Caskey (D-Butler), a co-chairman of the joint committee that rewrote the foundation law in this spring's session, says he was unaware of the escape clause and has vowed to change it in the 1994 session. One DESE official has said several lawmakers knew the loophole was in the bill and were aware of its ramifications. The controversial provision, by one estimate, could halve the expected per-student payments to districts that did not convert their bonded indebtedness to a lease-purchase plan.

Some critics of S.B. 380, such as Sen. Peter Kinder (R-Cape Girardeau), contended during this year's earlier debate that the reform measure was too complicated to be fully understood and considered in the short time allotted it during the final days of the session. "The result," Kinder says, "is a deeply flawed bill whose ramifications are still being revealed to the puzzled legislators who voted on it, and still bewildering the Department of Elementary and Secondary Education whose unenviable task it is to sort out legislative intent."

Several attempts have been recently made by the Cape Girardeau lawmaker and others concerned about flawed ramifications of S.B. 380 have sought to inform others of the school law flaws but little publicity has surfaced. The law's loopholes have generally been ignored by the state's major media and have attracted little public notice.

Sen. Caskey has said he has already written correcting amendments for S.B. 380, which was so widely hailed when it was signed into law just a few short months ago.

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HANCOCK HUSTINGS: Promising relief for harassed taxpayers, a revised tax-limitation version of the Hancock Amendment is now making its way throughout Missouri, with signatures being sought from 130,000 citizens so the revision can be placed on next fall's general election ballot.

The appearance of the amendment comes 13 years after the first proposal was narrowly approved by voters during the Teasdale administration. In appearances around the state, the proposed amendment's principal sponsor and namesake, U.S. Rep. Mel Hancock (R-Springfield) claims his revisions of the original law, Article X of the Missouri Constitution, were precipitated by legislative enactment of S.8. 380, the so-called "Outstanding Schools Act."

As was the case in his first amendment, Hancock does not call for statewide votes on every tax increase, only those that exceed a proscribed limit. Hancock claims this limit has been exceeded several times since 1980, the most recent being the increases called for in S.C. 380.

Here's the revision of the tax increase formula proposed by Hancock in the referendum now being circulated throughout the state. The new formula, more than a little complicated, reads: "This revenue limit shall be calculated for each fiscal year and shall be equal to the product of the ratio of Total State Revenue in fiscal year 1980-81 divided by the Personal Income of Missouri in calendar year 1979 multiplied by the Personal Income of Missouri for the calendar year most recently completed or for the average of the three most recently completed calendar years, whichever is greater." (Note: It's not the kind of formula most of us can carry around in our heads.)

The current amendment, also called "Hancock II," states that in the event a tax increase exceeds the above formula by

percent or more, there shall be a distribution of excess revenues, on a pro rata basis, to persons filing state income tax returns. If the tax increase is less than 1 percent but exceeds the above limitation formula, the excess is to be transferred to the state's general revenue fund.

The Springfield Republican further stipulates that in the event his proposed amendment is found unconstitutional, then Missouri's director of revenue shall be ordered to reduce the state sales tax levy in an amount equal to the designated excess revenue.

The amendment retains the original provisions that include fee, levy and tax increases by local, district, county and regional jurisdictions, defining what shall constitute a fee or levy in these areas .

IMPROVING INDICATORS: Economists at the University of Missouri's College of Business & Public Accounting predict sizable gains for the state's economy in the year ahead. A quarterly report prepared by the college forecasts overall growth in 1994, ending many of the weak spots that have appeared in the current year. Employment and personal income will both be up, they believe, along with commercial and home construction.