JEFFERSON CITY - A planned lawsuit against the state's system for financing local schools is dividing Missouri's school districts.
Although the lawsuit is being prepared by a group of more than 200 districts, other districts warn that a successful lawsuit could lead to deep cuts in state funding for school districts in areas of economic growth.
Hold harmless school districts suffer smaller cuts when state funding to education is frozen because they are located in the areas of higher economic growth and property taxes.
By a provision in the Outstanding Schools Act, the bill that created the current school funding system, districts essentially are protected from getting less state funding than they did in the 1992-1993 budget year.
That protection, called the "hold harmless clause," was adopted in order to win support from legislators representing districts with high economic growth.
The number of hold-harmless districts has increased from 10 in 1993 to more than 70. Since the funding law prevents cuts in state funding for those "hold-harmless" districts, the only way to provide funding increases for districts of declining economic conditions is to boost the total amount of state funds appropriated by the legislature -- an increase that has become financially impossible given the state's overall stagnant economic growth.
"The more the formula is underfunded for what it needs to provide an equal amount to all school districts, the more schools are going to fall into the hold harmless category," said Denise Pierce, Director of School Finance for the Missouri Department of Education.
Superintendents of hold harmless school districts caution their boards of education not to become party to the suit. "I just can't recommend that they jump on a bandwagon that might actually inflict more harm than good," said Mark Bowles, leader of the Hold Harmless Coalition. Bowles is also the superintendent for Cape Girardeau schools.
While districts planning a court challenge point to the need of the courts to intercede in order to propel the legislature into action, hold harmless schools maintain that the best avenue for action is through the legislative process.
"I think legislatively we have a better chance to come up with compromises that will benefit everybody than we will through anything that's happened court ordered," Bowles said. "I challenge anyone to find me a successful court ordered resolution to school finances anywhere."
"Hold harmless schools are not a part of the lawsuit because by and large we have not heard that they are going to talk about both equity and adequacy," McIntosh said.
Two charges are at issue in the suit. One is that the state is not providing enough money to education--a charge school officials call adequacy of funding. The other charge is that the formula by which the state funds are distributed leads to unequal levels of educational quality across the state--a charge school officials call equity.
"The state has increased standards over the past 10-11 years and can unaccredit our schools, but cannot send us dollars to achieve those standards," McIntosh said. "The only way we can achieve those standards is by asking the local property owners to continue to increase their taxes."
An audit conducted by the Missouri State Auditor's Office found that for the 2002 school year, hold harmless districts received additional revenue of $244 million while schools on the formula faced withholdings.
The Missouri Education Department maintains that hold harmless districts are at an advantage. "In this economic time, being hold harmless is a very good thing," said Pierce.
While hold harmless districts are prevented from cuts in state funding, Richard McIntosh, a lobbyist for hold harmless schools, says they've suffered from near static levels of state funding since 1992-1993.
"I do not see how that situation is good for any of the 200,000 plus students in hold harmless schools," McIntosh said.
But a few of the superintendents involved with the group planning a challange to the funding system have little regard for the complaints of their hold harmless counterparts.
"I have no sympathy for hold harmless schools in the last two years because they have been exempt from the majority of the cuts when schools that were not hold harmless were given hundreds of thousands of dollars of cuts," said Bruce Johnson, superintendent Stanberry R-II district.
Attorney Alex Bartlett said that he hoped hold harmless districts would not go against the suit because many of them are dealing with the same issues, especially coming up with resources. "Many hold harmless districts are just hold harmless on paper," Bartlett said.
McIntosh said that hold harmless districts might intervene in the lawsuit, while continuing to push for an increase in the amount of funding given to hold harmless schools.