Inflation is cutting deep into Missouri school budgets, and districts want a fix
At least 35 school boards have passed resolutions asking the Missouri Board of Education to convene a blue ribbon commission to study the formula for funding public schools, which each year adds up to less and less of their overall budget.
Local education leaders around Missouri say the formula that determines state funding of public schools hasn’t kept up with inflation and other pressures districts face in 2023.
At least 35 school boards have passed resolutions asking the State Board of Education to convene a blue ribbon commission to study the formula, which each year adds up to less and less of their overall funding.
David Buck, superintendent of the Lee’s Summit R-7 School District, has watched state funding dip from 34.4% of the district’s revenue to 26% in nine years. The district’s voters recently approved a higher tax levy to increase teacher salaries to keep up with inflation.
“(The formula) is shifting the financial burden of operations from state to local level, because it’s so flat,” Buck said.
State lawmakers say they “fully fund the formula,” said Mehlville Superintendent Chris Gaines, but that doesn’t account for changes made seven years ago that make it easier to qualify as fully funded.
“They still get to say, ‘We fully funded the formula’ — even as they manipulated the cost to be lower,” Mehlville Superintendent Chris Gaines told The Independent.
The amount of money the state allots as a base cost for educating each student has increased 4% since 2009. The consumer price index, an indicator of inflation, has risen over 33% in the St. Louis Metro during the same period of time.
The call for an update to the foundation formula is felt by lawmakers like state Rep. Brad Pollitt, R-Sedalia, who chairs the House elementary and secondary education committee. He said most education funding formulas last 10 years, and this current formula is past its 17th.
During the legislative session this spring, he steered his committee toward learning more about the formula, but he didn’t feel confident the legislature was ready to tackle the update.
“I think we need to update (the formula), but that’s a pretty heavy lift and not very many people understand it,” Pollitt said. “Very few people understand the formula that are actually in the capital.”
Lawsuits have preceded the past two major changes to the formula, but Missouri superintendents are hoping for edits soon and hoping a blue ribbon commission can help.
How the formula works
The current formula, crafted in 2005 amid litigation, leans on a “state adequacy target,” or the minimum cost of educating each student. This target is recalculated regularly by looking at the expenses of the state’s high-performing districts.
The state adequacy target has been frozen since 2020.
Gaines said he always felt the current formula shorted districts, but changes in 2014 and 2016 worsened the pinch.
“There's always been frustration from the start,” Gaines said. “When the legislature started manipulating and limiting growth in the state adequacy target in order to get the formula to work within a defined amount of money, that just added to it.”
In 2014, state lawmakers passed a law allowing the state to recalculate the target when it didn’t appropriate enough funds. And two years later, lawmakers set a cap on the amount the state adequacy target is allowed to grow.
The target is multiplied by the weighted average daily attendance, or a district’s average attendance with extra funding for students that cost more to educate.
The state sets a threshold based on the average number of students that qualify for free or reduced lunch, receive special-education services and have limited English language proficiency. Then, districts receive additional funding per each student they educate over the threshold.
Districts with more students in the high-needs groups have a higher weight.
A third factor completes the multiplication: A dollar-value modifier. This factor adjusts state funding for an area’s cost of living.
Then, the state subtracts school districts’ locally generated revenue from 2004-2005, based on a tax levy of $3.43. The amount remaining is the state aid that districts get annually from the formula.
The state also gives districts money through Proposition C, a 1% sales tax approved by voters, and the Classroom Trust Fund, a fund that includes gambling revenues.
Lawmakers also include annual money in the state budget to provide for transportation costs and grants to increase teacher salaries.
Gaines said these budget items aren’t as reliable because they seem to be the first cut when state revenue is down.
“If we would fund the formula the way it should be,” he said, “maybe we wouldn't have to be doing these grant programs.”
A call for a commission
Past foundation formulas were crafted before Missouri finalized term limits. Now, state lawmakers are less likely to have a history with the formula when making changes.
Charlie Shields, chair of the State Board of Education, worked on the current formula as a state senator in 2005. He told The Independent that the process took nearly two years.
“You need to do it in years that you have money, which we're blessed right now that the state’s budgets are in pretty good shape. So if you're going to revise a formula, this is probably a good time to start,” he said. “But I can't overemphasize the difficulty factor in doing this.”
He said the state board is ready to assist legislators, but he doesn’t think a blue ribbon commission is the right path.
“It is the legislature that writes the formula, and for us just to come up with a commission that hands a legislature recommendation doesn't seem like that would be a process that would work,” Shields said.
A blue ribbon commission provides studies and suggestions to the State Board of Education and lawmakers, but the state’s elected officials will ultimately write the legislation.
“We understand superintendents and districts wanting us to have somebody looking at the formula,” Shields said. “It doesn't seem an appropriate process in my mind to do that outside of the legislature.”
There is currently a commission studying teacher recruitment and retention that recently made its first round of suggestions. Rep. Ed Lewis, R-Moberly, took many of the group’s legislative priorities as he filed bills.
Midway through the legislative session, his teacher recruitment and retention legislation was merged into one bill and overwhelmingly supported by the House. The bill died, although a plan was crafted to bring it to the Senate floor, during GOP infighting in the Senate.
Legislation proposing additional funding for high-needs students through the formula also made progress this spring but did not get a final stamp of approval.
Pollitt said he doesn’t think the formula should be rewritten entirely, but he does foresee edits. He held a workshop on the formula in his committee this year to begin to get lawmakers ready for changes.
Buck hopes a new blue ribbon commission studying the formula could engage superintendents, the Department of Elementary and Secondary Education and state lawmakers.
“This needs to be a collaborative effort,” he said.
Buck pointed to a recent study of the formula conducted by an expert on state education funding. He said it was a good starting point, but he wants districts to be engaged in the next step of the research.
Studying the formula
The State Board of Education touched on the study in its recent meeting, barely grazing points made in a lengthy report by Bruce Baker, chair of the Department of Teaching and Learning at the University of Miami.
Baker looked at Missouri’s formula this year and found that the current formula hurts districts with the highest amount of low-income students.
He suggested a change to the weighted average daily attendance, saying the weights were “not based on any empirical analysis.”
Instead, he recommended removing the threshold and updating the weights to the actual cost of educating high-needs students.
Currently, the state gives districts an additional 25% of funding costs for low-income students. Baker said his research supports a boost of 111% for low-income students.
Low-income students in cities or the fringe of cities cost 139% more to educate, he said. Baker estimated a weight of 310% for English-language learners, compared to the current 60% boost.
Baker also suggests switching to enrollment rather than attendance as a pupil count.
“It is well understood that average daily attendance rates tend to be lower (relative to enrolled, eligible pupils) in districts that are higher in child poverty and in minority concentrations. As such, when state aid is calculated based on average daily attendance, that aid is systematically reduced in higher poverty, higher minority concentration districts,” he wrote.
Gaines liked the shift away from attendance but wished Baker’s report would’ve looked into the state adequacy target. He said the target is what got superintendents thinking about a path forward.
“The stagnation of this state tag adequacy target was the thing that was driving frustration in a lot of people,” Gaines said. “So that really got us to engage and start having conversations around that formula.”
Pollitt said he hopes to discuss education funding with legislative leaders soon.
This story was originally published by the Missouri Independent.