The online hub of the Missouri School Administrators Coalition.

Additional Funding Needed to Avoid Funding Redistribution

Administrators and school district supporters should be aware of a looming issue for the 2015-16 school year. In December, DESE sent this administrative memo to school districts and a simulation detailing the impact of HB 1689 on school districts for the next school year if additional funding is not appropriated during the 2015 legislative session and budget process.

To recap, HB 1689 was passed last year Representative Kathy Swan (R - Cape Girardeau) and was designed as an early childhood bill allowing unaccredited and provisionally accredited districts to begin counting preschool students that qualify for free and reduced lunch in the district’s average daily attendance in their formula calculation in the upcoming years. The bill also allows all districts to receive state aid for this same preschool population once the formula becomes fully funded.

During the legislative process in the Senate, there was language added to the bill that went beyond its original scope that could lead to a substantial redistribution of funds between school districts if certain funding levels are not met during the 2015 legislative session. The provision is found in subsection 8 of section 168.031 and reads as follows…

8. Notwithstanding any provision of law to the contrary, in any fiscal year during which the total formula appropriation is insufficient to fully fund the entitlement calculation of this section, the department of elementary and secondary education shall adjust the state adequacy target in order to accommodate the appropriation level for the given fiscal year. In no manner shall any payment modification be rendered for any district qualified to receive payments under subsection 2 of this section based on insufficient appropriations.

The effects of this statute means that…

The proration factor districts have become accustomed to over the past several years will go away. Instead, only the State Adequacy Target will be adjusted to accommodate available state revenues, thus affecting only formula districts.

One hundred ninety-three "hold harmless" districts will see no proration factor going forward. Because all districts were seeing approximately a 96.8% proration factor during the current year, this means that most hold harmless districts are guaranteed to receive a 3.2% increase next year.

Additionally, thirty-two districts fall off the formula and become hold harmless meaning they gain between 0 and 3.2% in state aid.

Two hundred ninety-five formula districts will lose money at varying degrees ranging from just less than flat funding all the way up to a loss of nearly a 10% drop in state aid.

Below are documents detailing the impact on each district in the state for the upcoming year if NO new money is appropriated to the formula next year.

How to fix the problems caused by HB 1689…

It is unlikely that the provision passed in HB1689 can be repealed. This means that fully funding a State Adequacy Target of $6,131 is extremely important for formula districts. In order to ensure that all districts are funded at equal levels, the General Assembly must appropriate approximately $125 million more toward the foundation formula than was appropriated for the current fiscal year. This will fully fund a State Adequacy Target of $6,131.

Resources to help you discuss this issue with your boards, employees, parents, communities and legislators are below…

One Page Summary
Word Document
PDF Document

Comprehensive Data
Excel Document (Sortable)
PDF Document