The online hub of the Missouri School Administrators Coalition.

Bulletin #14: House Passes Common Core Compromise, Tax Cuts On Fast Track

After two weeks of intense debate regarding Common Core State Standards in the Missouri Senate Education Committee, the Missouri House of Representatives took up HB 1490 last week. After many negotiations between proponents and opponents of Common Core, the House finally settled on a compromise and overwhelmingly passed a bill.

When it was filed, HB 1490 would have banned Missouri from aligning the state's standards to the Common Core and going forward would have required the Missouri Legislature to sign off on all changes to state standards. However, the bill was amended on the floor of the House last week. 

As it reads now, HB 1490 allows for the Missouri Learning Standards to stay in place. Additionally, the new 2014-2015 MAP tests that are developed by the Smarter Balanced Consortium will be given as a statewide pilot and the state is prohibited for utilizing the results for high stakes district accountability or teacher evaluations. This means that districts will be able to test out the new test system and test style for one year with out the added pressure of school accreditation being tied to the test results. 

HB 1490 also requires the State Board of Education and Department of Elementary and Secondary Education to convene work group or practitioners and policy makers whenever new standards are developed. The Department is also required to convene two workgroups, one of kindergarten through sixth grade and the other for seventh through twelfth grade to study the implementation of the Missouri Learning Standards and make recommendations to the State Board of Education for changes to the standards. The changes would not be required to show up on state assessments for up to three years after they were adopted. 

After changes were made, the bill ended overwhelmingly passed by a 132-19 margin. 

SAC supports these changes and will continue to fine tune the bill as it moves to the Senate. 

Legislature Puts Tax Cuts on Fast Track

SB 509, which was passed by the Missouri Senate early last week, was heard in the House Ways & Means Committee late last week and immediately passed by the committee. The bill could be brought up for consideration by the entire House of Representatives as early as this week. As we have discussed before, SB 509 does the following...

  • Missouri's top income tax rate would be cut from 6 to 5.5 percent.
  • Businesses would receive a deduction of 25 percent on their income taxes each year.

  •  Individuals making less than $20,000 would see an increase to their personal exemption of $500.

According to various estimates, the overall cost to the current version of SB 509 ranges from $620 million to $700 million.

The consideration of SB 509 comes at the same time Kansas is reaping the consequences of their decision to eliminate income taxes two years ago on passthrough businesses like LLC's and sole proprietorships.  An analysis by the national Center for Budget & Policy Priorities has found that...

  • The large revenue losses extended and deepened the recession’s damage to schools and other state services.  Most states are restoring funding for schools after years of significant cuts, but in Kansas the cuts continue.  Governor Sam Brownback recently proposed another reduction in per-pupil general school aid for next year, which would leave funding 17 percent below pre-recession levels.  Funding for other services — colleges and universities, libraries, and local health departments, among others — also is way down, and declining.
  • Deep income tax cuts caused large revenue losses.  Kansas’ tax cuts this year are costing the state about 8 percent of the revenue it uses to fund schools, health care, and other public services, a hit comparable to a mid-sized recession.  State data show that the revenue loss will rise to 16 percent in five years if the tax cuts are not reversed.
  • The tax cuts delivered lopsided benefits to the wealthy.  Kansas’ tax cuts didn’t benefit everyone.  Most of the benefits went to high-income households.  Kansas even raised taxes for low-income families to offset a portion of the revenue loss; otherwise the cuts to schools and other services would have been greater still.
  • Kansas’ tax cuts haven’t boosted its economy.  Since the tax cuts took effect at the beginning of 2013, Kansas has added jobs at a pace modestly slower than the country as a whole.  The earnings and incomes of Kansans have performed slightly worse than the U.S. as a whole as well. 
  • There’s little evidence to suggest that Kansas’ tax cuts will improve its economy in the future.  The latest official state revenue forecast, from November 2013, projects Kansas personal income will grow more slowly than total national personal income in 2014 and 2015.

SAC is opposed to SB 509.

2014 Supplemental Budget Bill Becomes Law

Missouri schools will be shorted nearly $15 million after the Missouri Legislature approved the 2014 supplemental budget without filling in the shortfalls in gaming and lottery revenues that policy makers overestimated when they approved their budget last year. Governor Jay Nixon announced the withholdings late last week. 

Last year, the Missouri General Assembly over estimated the amount of revenue that would be generated by a new casino in Cape Girardeau. This allowed policy makers to argue that an additional $66 million was going to education. However, actual revenues have come in nearly 9% below those estimates, forcing Governor Nixon to request a $44 million transfer of general revenue into the Classroom Trust Fund to make up the shortfall in the 2014 supplemental budget. Despite ample general revenue dollars being available during the current fiscal year, the legislature chose to only appropriate half of that amount, $22 million. 

In response to the move, Governor Nixon issued the following statement late last week...

“This $22 million cut to our K-12 classrooms and higher education institutions is an unnecessary and entirely avoidable consequence of the General Assembly’s failure to include the funding that I repeatedly requested,” Gov. Nixon said. “These are real cuts that will affect all Missouri students, even though there is sufficient general revenue available right now to cover the shortfall and make our schools and higher education institutions whole.  That is why, while it is too late to fix this problem for the current fiscal year, I call on legislators to right this wrong by including additional funding to make up for this loss in the Fiscal Year 2015 budget.”

Administrators should be aware that while $15 million is being withheld from the Classroom Trust Fund, it is likely that your district's proration factor will likely increase. That is because the Department of Elementary and Secondary Education was already restricting payment due to the uncertainty of gaming revenues until the supplemental budget was passed and the situation was cleared up. 

The final supplemental budget also approved $2 million for the Normandy School District to ensure that the district is able to stay solvent until the end of the school year. 

2015 Budget Moves Forward

The Missouri Senate Appropriations Committee moved forward on the 2014-2015 state budget last week. The only major changes the Senate Committee made to the HB 2002, the education budget, was to reduce the assumed lottery revenues by $7 million dollars and reduce the amount of money dedicated to state assessments by $7 million. 

The reduction in lottery revenues means that the overall amount of increase of general revenue dollars in the 2014-2015 budget for the foundation formula would be reduced to $115 million from the $122 million increase that the House of Representatives approved. The Senate instead transferred the $7 million assumption from lottery and placed it in the Supplemental Revenue Fund. If you recall the Supplemental Revenue Fund was created by the House of Representatives to deal with the differences that existed between the Legislature and Governor on the amount of revenues the state of Missouri would bring in for the 2014-2015 school year. 

The Senate committee also reduced the amount of money for a new state testing contract by $7 million. Missouri's current test contract is up at the end of this year and the Department of Elementary and Secondary Education has requested $26 million from the Legislature to purchase a new test from the Smarter Balanced Consortium. That amount also would pay for one administration of the ACT for every public high school junior in the state of Missouri. With the budget for this cut back to $19 million, it is uncertain what that means for testing in the coming year as it is DESE's contention that the $26 million is the cheapest option for implementing the Missouri Learning Standards. 

House Likely to Fast Track Voucher Bill This Week

Administrators need to be aware that the House may move very quickly in an attempt to pass a voucher bill this week. SB 493, the Senate transfer bill sponsored by Sen. Pearce, was heard last week in the House Elementary and Secondary Education Committee and House leaders are currently re-writing the bill. It is expected that the version that the committee will move forward will contain several attacks on public education, particularly vouchers. 

Administrators should expect SAC bulletins this week informing you of the developments and notifying you if there is a need to contact your State Representative.