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Foundation Formula left behind

May 14, 2004
By: Alex Yalen
State Capital Bureau

JEFFERSON CITY -- When it comes to Missouri education policy, what the General Assembly didn't do this session may turn out to be more important than what it did.

Namely, state legislators failed to revise Missouri's $2.4 billion Foundation Formula, the key mechanism through which the state distributes money to its public schools. The formula is also the subject of a major lawsuit involving nearly half of the state's school districts.

"I wasn't at all surprised," said Sen. Wayne Goode, D-Normandy, about the failure to make much headway into fixing the formula. In 1993, Goode played a key role in designing the formula that's currently in question. "The basis (for reforming the formula) was just not in place."

By next session, however, legislators may not be able to put the problem aside. The suit, which was filed in January, challenges the constitutionality of the current funding setup. The legal challenge is presently winding its way through the Cole County courts.

The suit alleges that the foundation formula fails to meet two constitutionally-mandated requirments: it neither distributes enough money, nor does it distribute the money equitably among school districts.

The legislature did convene a panel that began examining Missouri's school funding problem. But the committee's report, released in February, offered few concrete findings.

Both studies reinforced the major problem that more money is needed for the formula -- anywhere from an additional $700 million to $1 billion. Though the formula gained about $100 million in this year's budget, the state is still a long way off from its funding magic number -- a "proration factor" of 1, or 100 percent.

"Dealing with the formula would have required facing the reality that a lot more money is needed to fund schools," said Alex Bartlett, lead attorney for the group suing the state. "I don't think there were people willing to grapple with that."

But leading Republicans, including House Speaker Catharine Hanaway, R-Warson Woods, and Senate President Pro Tem Peter Kinder, R-Cape Girardeau, said that work on the foundation formula had been done, and was only in its beginning stages.

"This is a long process," said Sen. Charlie Shields, R-St. Joseph, who chaired the education finance reform committee. "You have to evolve into it (the new formula.)"

Shields also said he intended to make the committee on education formula a permanent entity.

Another complication was the general election in the fall, Goode said. That may have paralyzed some in government from taking decisive action on the highly controversial formula.

"After statewide general elections, (changes) could happen," he said. "That's the way it was in 1977 and 1993."

But acting on the formula isn't guaranteed to get any easier next session, especially after roughly 60 school districts were successful in raising their local property tax rates in April elections.

Because the formula rewards districts for local tax efforts, Missouri's Department of Elementary and Secondary Education said in April that those rate increases could make the formula more difficult to fund and less equitable.

The General Assembly will also face problems stemming from term limits. Some Senators, including Goode, who is widely regarded as one of the most knowledgable school funding experts in state government, will be forced out of their seats in January.

That means a new crop of legislators will have to be brought up to speed on the intricacies and complexities of the formula -- and there are many of both.

Meanwhile, school districts involved with the suit can only sit and watch as the state tackles -- or avoids tackling -- school finance reform. But there is some reason for optimism on their part, stemming from both legislative and legal precedent.

In 1993, a nearly identical lawsuit was filed against the state. Cole County Circuit Court judge Byron Kinder ordered the General Assembly to fix the formula -- and they produced the massive Outstanding Schools Act of 1993 to do it. That act also produced the largest tax increase in recent years, which could be difficult to do again since tax raises require voter approval.

Neighboring Kansas heard a similar suit over its school funding formula this year, and the courts mandated that Kansas' state legislature create a new funding mechanism -- a feat that they hadn't yet accomplished despite mulling over several different proposals before their session ended.

Now, Missouri schools are stuck waiting to see whether or not their suit will play out in a similar fashion, with the courts leading state government to a new education funding solution.

Both Gene Oakley, a commissioner in Carter County and a leader of the group suing the state, and their attorney Bartlett, said that's what they've been expecting from the beginning.

"The legislature will not act until forced to," Oakley said.