Missouri school funding system inherently unfair
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Missouri school funding system inherently unfair

Date: April 11, 2012
By: Stephanie Ebbs
State Capitol Bureau
Links: SC89010, SB 1740, SB 454

JEFFERSON CITY - While the Missouri General Assembly has moved several education issues forward, the two issues affecting the most people have not been resolved.

The Senate moved forward its substitute for a bill that would eliminate teacher tenure, instead lengthening the amount of time before a teacher is tenured from five to ten years. The Senate also gave preliminary approval on a bill to change charter school regulations, which would allow charter schools to expand throughout the state. The House approved a measure to allow students to attend a a school outside their district if that school is closer to their home than the school they would normally attend.

The most significant issues are an adjustment to the formula used to determine public school funding and how to deal with students trasferring out of the unaccredited St. Louis school district.

Funding Formula

In 2005, a group of school districts called the Committee for Educational Equality challenged the formula in the Missouri Supreme Court, saying that this philosophy was unconstitutional. The committee argued that the state's funding was not enough, despite allocating more than 30 percent of the budget to education; and that funding needed to be equitable, matching the constitutional language requiring the state provide "a general diffusion of knowledge."

The schools' argued that constitutional language required equal funding, but in 2009 the Supreme Court ruled against them. According to the court's decision, the "general diffusion" only applies to the opportunity of education, not how that education is achieved or funded. It also argued that no part of the constitution requires that the amount districts spend on their students has to be equal across the state. The court held the state to the constitutional language requiring the state to allocate 25 percent of the budget to education and said the state could not be required to allocate more.

The formula change in 2005 sought equal funding for all schools. However, schools with a high tax base, such as Ladue or Clayton, did not need that aid as badly as rural schools. In 2005, the formula was changed so a portion of the calculation relied on local property tax wealth.

Graduation rate
Percent in college
Per pupil spending
Free/reduced lunch
Avg. teacher salary

The discrepencies in state and local funding mean that urban and rural districts have a lot of other differences. The Ladue school district in St. Louis, and Cabool, a district in the Ozarks, provide a contrast on several different levels.

The formula is based on attendance in each district, local wealth and an "adequacy target" to determine what amount of spending per-pupil is enough to ensure a solid education. This "adequacy target" is calculated by averaging per-pupil expenditures of the highest and lowest spending districts in the state.

One justice on the case, Mike Wolff, spoke out against the new formula's philosophy. He said in a recent interview that it was fundamentally unfair to use local wealth to determine school funding. According to Wolff, local taxes make up 60 percent of local school funding and the state is responsible for the other 40 percent.

"It's very hard to argue that the Missouri Constitution requires equality when the system is set up to ensure inequality," Wolff said.

A former supreme court justice, Mike Wolff, was the only dissenting voice in the 2005 case. He says that the formula is fundamentally unfair because some districts cannot raise taxes or simply do not have the necessary local wealth.

"If you depend upon local school districts for the bulk of education funding, that is highly dependent on the goodwill of the voters in that district" Wolff said.

He mentioned the public school district in Kansas City, which recently lost state accreditation. If voters are not invested in the local school, Wolff said they aren't willing to fund it. In suburban areas such as Ladue, however, tax increases have a better chance because the quality of schools increases property values.

While Wolff argues that equality has become an unattainable ideal, some legislators are trying to even out the discrepancies. Rep. Mike Thomson, R-Maryville, and Senate Education Committee Chairman David Pearce, R-Warrensburg, have proposed similar legislation they say would make funding more equal.

This legislation would use the current $268 million deficit in education spending to move state money away from rich, suburban districts, Thomson said. By decreasing the funding of schools that have not received an increase, the rural schools who have less wealth and don't benefit from a growing population, would have their funding cut at a smaller rate than schools that received an increase in the last seven years, he said.

This attempt to "minimize the winners and losers," as some lawmakers put it, would determine how to distribute cuts but would not change the reliance on local taxes, which Wolff calls a fundamental inequality in the formula.

On the other side of the argument, Republican Sen. Eric Schmitt said the formula "fix" is unfair to schools who fund their education through local dollars. In one of the schools in his district, Kirkwood, local taxes pay for 95 percent of the school budget. That's a per-pupil expenditure of $13,000, only $300 dollars of which comes from the state, he said. He attributed that difference to local support, rather than inequality.

"To say then we're gonna penalize those people, I just don't think that's equitable," Schmitt said. He said if it was up to him, he'd rewrite the formula from scratch.

With 5 weeks left in the current legislative session, the legislation has not made progress in the House or the Senate, . There is no constitutional provision for how to deal with an underfunded formula. If no "formula fix" is adopted, some schools could face sharp funding increases and others drastic budget cuts.

"It will help negate the negative effect of what will happen if we don't do it," said a supporter of the fix, Rep. Sara Lampe, D-Springfield.

"We're at a point where we're going to have huge discrepancies between schools in terms of state funding. This formula fix will help that and make it not so severe."

The Senate bill sponsored by Pearce failed to pass out of committee. The House bill sponsored by Thomson is part of a package education bill that has not yet been debated by the House.

Turner v. School District of Clayton

The "Turner Fix" refers to the issues facing students living in the unaccredited St. Louis public school district. Missouri law states that students living in an unaccredited district have the right to transfer to other public schools at the expense of their former district. A University of Missouri-St. Louis professor released a study reporting that 16,000 students would transfer out of the St. Louis district if they had the chance.

A lawsuit against the Clayton school district, which refused to admit a student living in St. Louis, brought up the desire for changes to these laws. County school districts have claimed that they can't make room for all the students that would leave the unaccredited district.

The responsibility has fallen on the legislature to decide how county schools can determine how many students to admit. A Supreme Court case filed by the Webster Groves school district also brought up the dilemma of the large number of students living in the unaccredited districts in St. Louis or Kansas City, but paying tuition to attend private or parochial schools.

The transfer issue has been considered crucial to legislators from St. Louis and Kansas City, but has led to concern from lawmakers from other districts. While the two are the only major unaccredited districts in the state, the changes would apply to any school district that became unaccredited in the future. Thomson said the transfer issue is being used to "hold the state hostage," referring to the funding formula issue that would affect every public school in the state.