Last week was highlighted by several actions on both the 2014 and 2015 state budgets by members of the Missouri House of Representatives. First, the House passed HB 2014, the supplemental budget for the current, fiscal year. As you know, the estimated casino and state lottery revenues that both the Governor and the Legislature used in crafting the 2014 budget have thus far come in well below their projections. This prompted the Governor to request a $44 million transfer of state general revenue surpluses into the Classroom Trust Fund to make up for the shortfall.
However, last week the House finalized their version of HB 2014 with only an increase of $22 million, meaning that the Classroom Trust Fund is still at least $22 million short of the appropriated amount. Administrators should monitor HB 2014 very closely as it moves to the Senate in the coming weeks. There is concern that the $44 million shortfall that was used to determine the Governor's original request may actually be significantly higher and could reach as high as $60 million because to date, both casino and lottery receipts are down 9% from their budgeted projections.
Not all news was bad last week as an announcement was made from House Budget Committee Chairman Rick Stream (R-Kirkwood) that the House would create a pathway for Governor Jay Nixon to meet his goal of increasing spending on education by $278 million in the 2015 state budget. If you remember, there had been a significant discrepancy in the revenue estimates that the Legislature and the Governor were using in crafting the state budget. The Governor has recommended using a much higher projection of how much the state would have to spend in the 2015 budget cycle.
In order to take this discrepancy into consideration, the House's budget proposal (HB 2002) would put an additional $122 million directly into the state foundation formula and then, if state revenues grow at a greater rate than the Legislative estimate of 4.2% growth rate, the Governor would be able to direct up to an additional $156 million to the formula. While this could make budgeting difficult for school districts, this approach is viewed as a pathway to getting more funding directly into Missouri classrooms.
Also included in the House budget that was introduced to the House Budget Committee last week...
- $25 million for transportation over the current year's appropriated amount
- $26 million for the new testing plan being implemented by DESE. This includes the funding to pay for one administration of the ACT for every eleventh grader in the state
- $3.5 million for reading instruction in provisionally and unaccredited school districts
- Removal of the $7 million that the Governor had requested for internet connectivity for school that do not have access to enough broadband for the 2015 MAP tests that will be assess online.
- Removal of the $12 million increase that the Governor had requested for the Missouri Pre-School Program
This week HB 2002 will go before the Budget Committee to be amended by committee members, a process known as "mark-up". With the Legislature beginning their annual "Spring Break" upon adjournment on Thursday, this means the 2015 budget will be eligible to be debated on the floor of the Missouri House in two weeks when legislators return to Jefferson City.
For more information on HB 2002, check out the following story from Missourinet News from last week.
Bill Mandating School Calendar Heard in House Committee
HB 1139, sponsored by Rep. Steve Cookson (R-Fairdealing), was heard before the House Elementary and Secondary Education Committee last week. The bill would have a devastating impact on the local control of a school district in setting a school calendar that meets the needs of their community. The bill would prohibit school districts from beginning their school term prior to a week before Labor Day, while also mandating the school year go no later than May 31st. Going further, the bill requires any student that does not score "proficient" or "advanced" on state assessments to attend summer school.
Despite containing language that allows school calendars to be based entirely on one thousand eighty-five hours rather than days, SAC strongly opposes HB 1139.
Several individuals representing Missouri's tourism industry and the Missouri Chamber of Commerce testified in favor of HB 1139 because of the positive effect it would have for business owners and state revenues. Missouri Farm Bureau joined nearly every education organization represented at the Capitol in opposition.
SAC is opposed to HB 1139 because it would...
- Take away a local school board's ability to create a school calendar uniquely suited to their community.
- Prohibit school districts from moving to a longer school year. This approach has proven to be successful in meeting students' needs and raising test scores in several high poverty districts.
- Create an additional burden on the state's foundation formula because of the requirement that all students that fail to score proficient or advanced to be required to attend summer school.
- Create the necessity to extend the school day to unreasonable lengths or eliminate scheduled holidays and/or professional development days during school years that weather has caused districts to miss several days.
- Create a situation where tourism and money is put ahead of what is best for the education of Missouri school students.
Bill to Remove Negotiated Sale Option for Bond Sales Passes Out of Committee
HB 1769, sponsored by Rep. Paul Curtman, was passed out of the House Downsizing Government Committee last week on a straight party-line vote. The bill was filed at the urging of the State Auditor's Office and would remove the option for school districts to enter into a negotiated sale of general obligation bonds and instead require that the bonds be sold on the open market through a competitive bid process. Currently, under federal regulation, underwriters are required to disclose to a school district seeking to sell their bonds through a negotiated sale that a conflict of interest could exist. However, the bill goes further and prohibits a company from serving as both an underwriter of a district's bonds and the financial advisor for the school district.
The committee did make some changes to the bill prior to its passage. First, HB 1769 was changed to only prohibit negotiated sales on bonds that are greater than $3 million. Also, municipalities that employ a financial advisor would be exempted from the bill and still allowed to negotiate bond sales if it was in the municipality's best interest. This provision did was not included for school districts.
SAC is opposed to HCS for HB 1769.
The bill would take away a cost effective option from school districts and, in many instances, cost district tax payers millions in increased interest costs throughout the term of a general obligation bond. Negotiated sales are frequently used by school districts for multiple financial reasons. Many times negotiated sales are recommended during times of economic uncertainty in the stock market, which has become the norm over the last several years. Also, negotiated sales are utilized by small school districts that cannot market their bonds to outside investors, this lack of demand for these bonds ultimately results in higher interest rates being paid by school districts and their tax payers. Additionally, schools utilize negotiated sales when the district wishes to ensure that the bonds are sold within the school's community. If these bills were to pass, school districts would be forced to forgo their right to require their bonds be sold to local banks or investors. Opening up these bonds to the open market would allow for banks outside of a community or from outside of Missouri to purchase these bonds.
Governor Threatens Veto of Voucher Bills, House Begins Hearings on Transfers
Over the weekend, Governor Jay Nixon was in St. Louis to address a group of superintendents and board members at an Education Plus (formerly Cooperating School Districts of Greater St. Louis) Legislative Breakfast. You can read his remarks here. The underlying messages regarding student transfers: 1.) The current law is unsustainable and needs to be fixed. 2.) The root of the problem needs to be addressed by providing schools with effective supports and interventions before they become unaccredited. 3.) Private school vouchers are a non-starter in addressing the situation.
The remarks regarding vouchers could significantly change the debate in the halls of the Capitol as the House begins to begin their work on the issue. The House Elementary and Secondary Education Committee heard two bills that were filed with the intent to address the student transfer issue. HB 1822, sponsored by Rep. Mike Cierpoit (R-Lee's Summit), and HB 1868, sponsored by Rep. Rick Stream (R-Kirkwood) both seek to provide vouchers for students residing in "unaccredited" school districts, although each bill seeks to do it in different ways. HB 1822 would create a voucher tax credit so that students that could not find space in neighboring public schools would be eligible for a voucher to attend any private school. HB 1868 would allow students to transfer to private, non-sectarian schools if spaces are not available in high achieving public schools in the area.
Both of these bills seek to utilize one set of standards for public schools while creating a completely different set of lower standards for charter and private schools. HB 1868 would require charter school sponsors to develop the accreditation system for their schools and would tie the State Board of Education's hands in closing low performing charter schools by restricting the State Board to only looking at whether or not the charter schools meet the requirements their sponsor created. Private schools would only be required to be accredited by the North Central Association Commission on Accreditation, which accredits schools based solely on resource and process standards instead of academic performance.
SAC is opposed to HB 1822 and HB 1868 for the same reasons we oppose SB 493, which were detailed in last week's bulletin.
Please urge your State Representatives to OPPOSE HB 1822, HB 1868 and SB 493. As an alternative, ask your state representative to support HB 2037, filed two weeks ago by Rep. Jeanie Lauer (R-Blue Springs). The bill, which is co-sponsored by seventy-three other state representatives, is the only bill that seeks to be pro-active in supporting school districts that begin to struggle with student performance.
- Seeks to create a more proactive system of dealing with struggling school districts that reflects a shared responsibility between the local school district and the state by laying out the responsibilities and expectations of the local school district AND the state department of education.
- Provides a process where schools can be held accountable to meet performance measures without the threat of the current transfer law bankrupting districts when they are classified as unaccredited.
- Requires action from DESE instead of allowing a district to continue to maintain provisional accreditation for an infinite amount of time by giving broad authority to DESE to implement innovative, proven interventions to support struggling schools and districts. There is no limit on what provisions can be included in these contracts.
- Supports the review team concept, similar to MSIP Review Teams from years ago, that offers systematic support for a district when they begin to struggle. DESE at one time utilized these teams made up of practicing educators with expertise in various areas of education to assess a district’s effectiveness in meeting the needs of students and recommend improvement strategies. The program was cheap and effective. This concept has not been utilized in years and has been replaced by a system of top-down state mandated style of school improvement that is punitive in nature.
While Tax Cuts Are Pushed in Missouri, Kansas Supreme Court Rules Legislature Underfunding Schools
Across the border in Kansas, an interesting story is being play out. Two years ago, Kansas eliminated its income tax on "passthrough" businesses like LLC's and sole proprietorships. This created a significant drain on state revenues and forced the state to cut back significantly on funding for public education. During this same time, a lawsuit was being pursued by a group of public school parents that believed the state was violating its constitutional duty to equitably and adequately fund its public schools.
On Friday, the Supreme Court handed down its ruling: the state was both inadequately and inequitably funding its education system. The court ordered an immediate appropriation of $170 million to address the inequity that existed between wealthy school districts (mostly suburban) and poor (mostly rural and urban) districts. Additionally, the court sent the case back to a lower court to determine the amount by which the state is required to increase its funding to a level that would be considered adequate.
This final action likely means that the case could drag on for several months, if not years. States across the country are monitoring the developments in Kansas as they consider recourse to funding cuts that have plagued public schools throughout the country for the past several years.
As Missouri considers numerous tax cuts to "mimic" the irresponsible actions taken by Kansas, legislators should be aware of the ramifications of those actions in our neighboring state. As Governor Nixon is making progress to achieving the goal of fully funding the state foundation formula in the next two years, the legislature is still considering numerous proposals that would dramatically hurt the state's ability to make up the nearly $600 million shortfall.
HB 1253 & 1297 and HB 1295, sponsored by Rep. TJ Berry (R-Kearney) which have passed the Missouri House and are pending in the Senate, would together funnel nearly a billion dollars away from public education. SB666, sponsored by Sen. Eric Schmitt (R-Kirkwood) which received first-round approval in the Senate last week, would cost nearly $400 million in the current fiscal year by giving an immediate tax rebate of .75% of their property value to every residential property owner in the state. Creating a situation where residents with more expensive homes would see the largest tax break.
It has become clear that any bill that significantly cuts taxes while the state's commitment to public education is unmet, would be met with a veto by Governor Nixon. Over the weekend, Gov. Nixon referred to SB 666 as a "Money for Mansions" plan and stated his opposition. This comes after publicly stating his opposition to HB 1253, HB 1257 and HB 1295 in previous weeks.
Posted on Fri, March 14, 2014