Senators Question Nixon’s School Finance Plan (MO)

January 28, 2011

School finance officers will likely spend the weekend puzzling over conflicting charts showing the potential impact of Gov. Jay Nixon’s complicated education budget proposal.

The question: Would state funding for public schools remain stable under his plan next year, as the governor says, or would most districts actually lose money?

As is often the case with school finance, the answer is murky.

In a nutshell, Nixon wants the Legislature to pass a bill this spring to give schools an extra $189.7 million in federal money that has strings attached and must be spent this school year.

But Nixon wants schools to hold the money they net out of the deal until the 2011-2012 school year, to offset a cut in that budget.

Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, distributed a chart to colleagues today that shows most of the state’s 522 school districts would lose money under Nixon’s plan.

For example, St. Louis Public Schools would get an extra $4.2 million this year but $14.1 million less next year, for a net reduction of $9.9 million, according to calculations by Senate staff.

However, a district-by-district chart prepared by the Department of Elementary and Secondary Education shows all districts coming out even.

&# x0A;What’s the difference? Chalk it up to varying assumptions.

It turns out that Nixon’s proposal shorts schools by about $24 million this year compared to the amount appropriated. In raw numbers, they will receive an extra $88.4 million in extra federal funds this year but must save $112.2 million to come out even.

But here’s where it gets really tricky: The state runs the formula to calculate what each district should receive based on various factors, then distributes the money based on what’s available, pro-rating each district’s amount.

Nixon’s budget director, Linda Luebbering, says schools wouldn’t have received — and aren’t counting on — all the appropriated $3.004 billion this year. Because of fewer students enrolled in summer school and other factors, they’re expecting $2.98 billion.

So they’re being asked to save the $24 million they weren’t expecting.

There’s one more wrinkle: To make all districts come out even over the two years, the Legislature must pass a bill freezing the phase-in of the new foundation formula. The formula changes the way districts’ shares are figured.

Currently, 72 percent of the money goes through the new formula and 28 percent goes through the old one. Next year, that split was supposed to go to 86 percent and 14 percent.

But if that happens, some districts would lose and some would gain under Nixon’s plan. So his plan requires that the Legislature delay the phase-in.

Clear?

Schaefer sees a way to avoid the confusion: Hold the federal money until after July 1, when the next fiscal year begins, and put it in schools’ budgets then.
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"Is that permissible? We haven’t been given a definitive answer," the senator says.

Luebbering says waiting that long to spend the money would be illegal under federal law. Congress approved it to rescue teaching jobs and intended that it be spent this year.

Sen. Jim Lembke, R-Lemay, has another idea. Give the money back to help with the federal deficit.

The money would just go to other states, Luebbering responds.

"All that does is short the schools our $189 million," she says. "So I don’t think that’s a solution."