For the first time in the history of Missouri’s current school funding formula, the state will be able to say it is fulfilling its financial obligation to public schools.
Tens of millions of new money has gone to the effort — dating back more than a decade — to ensure that children at even the poorest districts have access to adequate funding.
But reaching that goal also required a kind of legislative short cut — a change approved last year that drastically reduced the price of the plan.
Even so, public education officials are applauding the $27.8 billion budget plan the Legislature is sending to Gov. Eric Greitens this week. The budget would fully fund the school formula, cancel millions in cuts to school transportation that Greitens had planned to make and, for the first time, eventually trigger up to $62 million in preschool funding for public schools statewide.
“It’s fair to say that it’s a better funding picture than we expected,” said Brent Ghan, deputy executive director for the Missouri School Boards’ Association, which advocates for public schools.
While Greitens still has to sign the budget, the state constitution prevents him from using a veto to reduce funding for public schools. But he can decide later to withhold money from schools if revenue is lower than expected.
“The state’s revenue picture does continue to be quite uncertain, so we’re cautioning our school districts to not necessarily count on receiving the full funding amount and to be cautious in budget planning,” Ghan said.
Seeking a target
Lawmakers created the school funding formula in 2005 with the idea that every school district should have a minimum amount of money per pupil.
That minimum amount, called the state adequacy target, is based on what successful school districts are spending. Initially, the goal was $6,117 per child per year, with additional cost-of-living adjustments added in some districts.
The idea was a major boost to poorer school systems that lacked the local tax revenue needed to reach that target .
But the price tag for the plan — which was estimated at $800 million — was more than Missouri legislators thought the state could immediately pay.
The plan was to be phased in over seven years. Initially, it all went well, and per-pupil spending rose by as much as 20 percent in some of the neediest districts.
But then the recession threw a wrench in that effort, hampering the state’s ability to keep up with the plan.
So, too, did other factors — including one legislative change in 2009 that is widely viewed as a mistake today. That’s when lawmakers removed a 5 percent cap on formula spending growth from the original plan, believing casino revenue would rise to cover the cost increase. It didn’t.
The removal of the cap shot up the state adequacy target from $6,117 per pupil in 2009 to $6,716 in 2012 and 2013.
The result was an expanding hole that lawmakers couldn’t fill, even as they poured hundreds of millions more into the formula. The situation forced the state education department to approve a temporary fix in 2012 .
“When I got here five years ago, we were $400 million behind. Then we added $300 million and we were still $400 million behind,” said Rep. Scott Fitzpatrick, R-Shell Knob, and House budget committee chair. “We were making every effort to fully fund the formula every year that I’ve been here. But it was just out of reach.”
Fitzpatrick also cited Medicaid spending as a major competitor to school funding. He said Medicaid spending rose by more than $1 billion since the funding formula was established.
To finally bring the goal of fully funding the formula within reach, the Legislature last year reinstated the 5 percent limit on spending growth. At the time, the formula was underfunded by more than $500 million.
The move allows the Legislature now to consider the formula fully funded even while pledging the smallest new investment — $48 million — in the formula since 2013. That’s compared to $85 million in the current budget and $115 million in 2015.
The current plan sets a target of $6,180 in annual per-pupil spending, said Roger Dorson of the Missouri Department of Elementary and Secondary Education.
The fully funded formula will be good news for some school districts, but not most in the St. Louis area.
That’s because many school districts are classified as “hold-harmless,” meaning they are already receiving more state aid than they need to meet the adequacy target. Often, districts are hold-harmless because they have a large local tax base . As a result, they do not benefit from further investments in the formula. That group includes St. Louis Public Schools, Clayton and Ladue.
But districts such as Bayless, Affton and Ritenour are beneficiaries of the formula and any money added to it.
Leaders at Bayless and Affton say that when the formula was underfunded, they had to raise local taxes to support high-quality schools. If the formula had been fully funded in the budget approved last year, they each would have received at least $150,000 more.
“We are looking forward to an increase in state funding,” said Ron Tucker, superintendent of Bayless schools.
Ritenour is expecting an $800,000 increase once the formula is fully funded, said Superintendent Chris Kilbride. But the increase still won’t solve all the district’s budget troubles, because more of its revenue comes from local taxes, which have decreased for the past several years.
“While we will expect some increases in state funding and local effort, it’s just not enough to go right away from deficit spending,” Kilbride said.
A law passed in 2014 established that fully funding the school aid formula would trigger millions of dollars for public preschools statewide in the following year.
Starting in the 2019 fiscal year, all districts can claim state aid for preschool for up to 4 percent of their students who qualify for free or reduced-price lunch, a measure of poverty. The law has already applied to unaccredited and provisionally accredited districts since 2015, including Riverview Gardens and Normandy Schools Collaborative.
But this would be the first time Missouri allocates money in the formula to all public schools for pre-kindergarten.
Studies overwhelmingly suggest that educational gaps originate in disadvantaged and minority children long before they enter kindergarten, and that effective preschool shrinks those gaps and benefits all children.
“The formula really speaks to what is the set of kids that we are committed to educating,” said Otto Fajen, legislative director for the Missouri National Education Association teachers union. “It’s really making a statement that we’ve moved beyond kindergarten to at-risk 3- and 4-year-olds.”
But the Legislature may decide to phase in the funding over multiple years to ease in the transition.
Missouri currently ranks 35th in pre-kindergarten spending, according to a January report by the Education Commission of the States. Missouri spends about $17.2 million on early childhood development programs and grants for pre-kindergarten programs, the report says.