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Bulletin #18: Legislature Begins Final Week of 2014 Session

2015 Budget Finalized

For the first time in several years, significant increases were seen in the amount of money appropriated to public education. By passing the state budget for fiscal year 2014-2015 this past Thursday, the General Assembly beat the Constitutional deadline to pass the state budget by one day.

On the heals of Governor Jay Nixon calling for an increase of $278 million to the state’s foundation formula during his State of the State address in January, the Legislature appropriated a $115 million increase from general revenue to the formula. Because legislators did not agree with the revenue estimate that Governor Nixon used to craft his initial budget, the General Assembly appropriated the additional $163 million to the formula through a newly created fund called the Surplus Reserve Fund. If state revenues exceed 4.1% growth (the estimate used by the Legislature) in the coming year, then that surplus revenue would flow into the Surplus Revenue Fund and the Governor would be able to direct up to $163 million to the state’s foundation formula.

The other major increase is found in public school transportation, which saw a $15 million increase in the Legislature’s final budget.

Also included in the budget was an additional $16 million dedicated to pay for Missouri’s new assessments that, among other things, calls for one free administration of the ACT for every junior enrolled in a public school in the state. Most of the new assessment funding will go to purchasing Missouri’s new MAP tests from the Smarter Balanced Consortium at no cost to local school districts. The package will also include a test bank that teachers can utilize to individualize instruction in their classrooms.

After Yearlong Battle, Tax Cut Becomes Law

Last week, the Legislature was able to override Governor Nixon’s veto of SB 509. This year’s version of a tax cut. This concludes a yearlong battle dating back to last session and HB 253. The Republican majority of 108 members was able to attain a single Democrat to crossover and support the override attempt, giving the House 109 votes and the two-thirds majority that is needed to pass legislation over objections by the Governor.

SB 509 will not take effect until 2017.At that time, Missouri will begin phasing in a personal income tax cut of a .5% over a five-year period. Additionally, the businesses will see a 25% deduction begin to be phased in over the same five-year period. The cut will be triggered only if Missouri’s general revenue collections exceed $150 million in a single fiscal year. The total cost of SB 509 will be $620 million once fully phased in.

Many thanks to each of you who have made calls, hosted meetings, and traveled to Jefferson City to raise concerns about how a tax cut bill would impact future funding of education. Unfortunately, we were standing in front of a runaway freight train. We slowed the issue down by sustaining the veto on HB253, but we were not stopping the SB509 train. If SB509 did not pass, there was a good chance that the legislature would have quickly passed a resolution to put a deeper tax cut proposal on the November ballot.If they had done so, the Governor would not have had any veto power over such a resolution.

Here are some positives that have emerged from the tax cut discussion:

  • SB509 does not impact the state budget as much as HB253 would have. It is also better than many other bills that we have seen last year and also during this session.
  • Education funding has been elevated to a major topic of discussion in the Capitol. The conference committee has agreed on a $115 million increase in the formula funding (Chris Straub is estimating a proration from 97% to 98%) and a $15 million increase in transportation funding (15% increase) for the 2014-15 year. It has been over 10 years since we have seen this level of increase.
  • There is now more pressure on the legislature to prove that they can fund education after passage of SB509.

Common Core, Student Transfers On Agenda for Final Week of 2014 Session

Today begins the final week of the 2014 Legislative session. As many of you know, the final week is when 75% of all bills pass. With the tax cut issue and state budget out of the way, there are two major issues still outstanding for administrators to follow: Common Core and student transfers.

First, HB 1490, sponsored by Rep. Kurt Bahr, will likely be taken up early this week. This bill, that initially started out as a straight repeal of Common Core in Missouri, has been scaled back significantly. The bill preserves the work that Missouri districts, administrators, and educators have embarked on for the past four years and instead of repealing Common Core, creates working groups to monitor its implementation in the state. In addition, HB 1490 requires the state to pilot Smarter Balanced assessments next year. The new assessments will not be utilized for high stakes accountability and cannot be used to lower a district’s accreditation level. The current version of HB 1490 allows school districts to try out the new MAP assessments, which are a significant change from the current MAP assessments and are given online, without the added pressure of high stakes accountability for the district looming over their head.

The other, equally important bill to watch is SB 493, sponsored by Sen. David Pearce (R – Warrensburg) dealing with student transfers from unaccredited school districts. SB 493 does several things that are positive for the transfer situation like giving districts the right to set reasonable class size numbers and limit transfers to students attending unaccredited buildings in unaccredited districts. Unfortunately with these reasonable approaches, there were several problematic provisions added, primarily the allowance of vouchers to allow students to attend private schools in their school districts that would be paid for utilizing local tax levy dollars.

The voucher provision is one of the largest differences between the House and Senate versions of the SB 493. The House of Representatives required that private schools accepting students would be limited to only receiving 70% of the local school district’s tuition rate. Also, before any voucher program could be implemented local voters in an unaccredited district would have to vote to authorize it. Private schools that wanted to accept students would also be required to give MAP tests to transfer students while also falling under several statutes that govern public schools. The Senate version contained no such restrictions.

The other issue to watch surrounding SB 493 is going to be the tuition rate to be paid by an unaccredited district to a district that receives students. The Senate version allowed for 100% tuition of the receiving district to be paid, while the House version limited the amount to 70% of the sending district’s tuition to be paid to the receiving district. The House version also applied this 70% calculation to K-8 district tuition to be paid to K-12 districts that receive high school students.

The House and Senate are expected to begin public negotiations this afternoon that could continue into the evening and possibly tomorrow.