Mo. budget debate leaves education funding in limbo

A record amount of money could be headed to Missouri’s K-12 schools – if the Senate and Gov. Jay Nixon sign on – as the state continues to evolve in how it funds all levels of education.

The Missouri House passed its budget plan last month, including $278 million for education in the nearly $26 billion budget for fiscal 2015, which starts in July. The Senate Appropriations Committee began hearings on the budget April 7, and the two chambers will work out differences before sending the final budget on to the governor in May.

So, will that money still be there?

“At this point, we’re it will be going to the schools,” said Rep. Elijah Haahr, R-Springfield. “Our goal is to get this money directly to kids in K-12. It will be the largest K-12 budget in state history and represent the commitment the House has to funding K-12.”

The money will come from two sources: $122 million in general revenue and $156 million in surplus revenue. The House’s total revenue estimate was lower than Nixon’s this year, and its budget plan would funnel additional money to education.

While it’s a big chunk of money, it won’t fully fund the Board of Education’s foundation formula, and educational institutions have been let down before.

Nixon’s fiscal 2014 supplemental budget request included $44.1 million in general revenue to make up for lower-than-expected revenues from riverboat gaming, lottery and other sources dedicated to education. However, the supplemental budget recently passed by the General Assembly includes only half, or $22 million, of this request, according to the governor’s office. Nixon announced he would spread the funding shortfall across all educational levels: $3.2 million from community colleges, $3.2 million from four-year institutions and $15.6 million from the K-12 foundation formula.

“It’s my understanding that from where we were last year, this would be an increase to the halfway point of fully funding it with the idea that – if we continue to grow – we might be able to get there in the next few years,” Haahr said.

Funding breakdown
Insufficent funding is a situation school districts across the state have grown used to and found ways to work around.

“You try to explain what you feel like should be funded to your representative and your governor, but at the end of the day you have to handle what’s given to you,” Ozark Superintendent Kevin Patterson said. “I worry about it, but I try not to let it consume what I do. What I do needs to be kid focused.”

That means adding programs when the financials allow, holding off when they don’t and depending on the funding that is available from the federal government and local taxpayers.

“In Ozark, we receive 47 percent of our money from our local tax base,” Patterson said. “We receive about 46 percent from the state, then we receive 5 or 6 percent from the federal government. The rest comes from small county items.

“I think local control is really important. Other districts that don’t have as much assessed valuation as Ozark receive more from the state and less from the local.”

The Ozark schools tax levy is $4.14 on $100 of assessed valuation – slightly higher than the neighboring community of Nixa at $4.31 and Springfield at $3.90. It’s that difference in assessed valuations that the foundation formula aims to alleviate.

“The objective of the formula is to be sure that every student in every school district has a threshold level of financial support,” State Board of Education President Peter Herschend said. “A good example would be the difference between the assessed valuation behind each student in the Branson school district and the assessed valuation behind each student in the Bradleyville school district. If you had to go on assessed valuation, and only that, Bradleyville kids would be poverty ridden.

 “What the foundation formula does is provide a system of equalization so that the threshold funding for Branson and Bradleyville is the same, or doggone close to it.”

According to the Taney County Collector’s Office, Branson’s tax levy rate sits at $4.08 for its population of 10,842, and Bradleyville has a rate of $3.91 with a population of 80 residents.

Herschend said the amount of money- going to the foundation formula has stayed the same during the past three to four years, but since the formula increases annually based on things such as inflation, the state has fallen further behind in funding it.

Continued roadblocks
One of the roadblocks in getting the money to the schools isn’t going to change.

“One of the limitations Missouri faces is we have a mandated balanced budget,” Haahr said. “We can’t just borrow money like other states can if we want to fund something. We have to stay in our budget. When we’re trying to deal with education and a variety of other things we fund in this state – transportation, corrections – a lot of times they all need more money, and because of the balanced budget, because some of those dollars are earmarked for specific programs, we are constrained by the amount of revenue that we have.”

It’s a situation Patterson understands.

“I’d like my house to live that way, and that’s how we have to live in the state government,” Patterson said. “At the end of the day, if the revenues don’t come in as projected, you’re going to have to figure out where you’re going to make those reductions.”

According to the Missouri Budget Project, it would’ve taken approximately $3.34 billion to fully fund the formula in 2013 and public schools received about $3.009 billion, a shortfall of about $336 million.

Haahr, Herschend and Patterson all expressed optimism the foundation formula will be fully funded – some day. When that happens, the state would be able to turn its attention to other levels of education.

 “The law right now reads that once the foundation formula is fully funded, then the state foundation formula can start to fund early childhood education – but not until then,” Herschend said. “Springfield, for its part, is doing a great job, and several of the other area schools that I know a little bit about – Branson, Republic, Willard, Rogersville, Nixa and Ozark – are all doing very, very good jobs of bringing early childhood education into their school on their own dime.”

Ozark, for example, has prekindergarten programs ranging from day care up to preschool. Some students receive support from federal grants and title programs, but, for the most part, it is currently paid through tuition.

Beyond K-12
Through new legislation, Haahr aims to make it easier for high school graduates. He introduced a bill to create the Show-Me Future Program, intended to eliminate the sticker shock of college. It’s based on legislation passed recently in the state of Oregon, as well as a program formerly run by Yale University for its students.

“A lot of times, when a student first investigates going to college, they look at tuition, fees, room and board, etc. and it chills their decision to go,” Haahr said.

“What this would do is basically give them the option of, instead of taking out those significant loans up front and having to pay them back later, to instead do the four years of undergrad and pay back a percentage of income.”

That means instead of being inundated with student loan payments as soon as college grads start working, the amount they pay back would increase alongside their salaries. The bill was heard in the Higher Education Committee, but Haahr said it isn’t necessarily going to move. He does plan to amend the language onto Senate Bill 506 and encourage the higher education board to look at the plan and come back next year with a proposal.

Haahr would like to create pilot programs in one community college and one four-year school before expanding to other schools in Missouri.

“What I want to do is create a broader conversation about how we fund higher ed, how we get kids into college,” Haahr said. “The goal of this is basically one more step in the chain to help them.”