TARGET 8: Is Missouri's public education funding constitutional?
COLUMBIA – The Missouri State Constitution protects the public education system from being severely under-funded, but Missouri's education funding is "nothing to crow about now."
In Missouri, public K-12 schools are funded through what's known as the foundation formula, a mechanism of funding which is required by the constitution. The formula dictates how much each school district should receive in funding per student.
The Committee for Educational Equality sued Missouri in a 2004 Missouri Supreme Court case challenging the foundation formula as it was in 2004. The committee claimed the state funding under the foundation formula was constitutionally inadequate and violated Equal Protection laws.
Meanwhile, the Missouri General Assembly amended the foundation formula in 2005 with Senate Bill 287 to “transition the state away from [a] tax-rate driven philosophy to a formula that is primarily student-needs based.” The formula was phased in from 2006 through 2012.
MU Law Professor Emeritus Philip Peters said it was easy for lawmakers to say their formula works because it was phased in, but it will cause challenges down the road.
“When we look closely at the formula, you see that it only provided only $2 or 3 million in the first year,” Peters said. “The promise was that it eventually will add $800 million. But you’re going to have to settle for three this year. So it was easy for them to fund the formula as they had phased it in the first year. They came up with three million extra bucks. It’s just when the real money had to be added that they said 'no we’re not coming up with that $100 million this year. 200 million next year. I don’t think so.”
Because the foundation formula changed while the case was in the court system, the challenge against the formula used in 2004 was applied to the newly amended formula in 2005.
There is a provision in Article 9 Section 3(b) of the Missouri Constitution that states at least 25 percent of the state revenue must be appropriated to support public education.
Republican lawmakers Sen. David Pearce, R-Warrensburg, and Rep. David Wood, R-Versailles, said Missouri is funding the education system at 30-35 percent.
Rep. Michael Butler, D-St. Louis, thinks it's much lower.
"In FY2017, K-12 education will make up 21.6 percent of the state budget," Butler wrote in a statement. "It is possible to make an argument that if we include Higher Education, the total education funding will be 26.5 percent of the total state budget."
Rep. Margo McNeil, D-Florissant, thinks it would be closer to 22 percent and thinks the legislature has not made education a priority and "refuses" to fund it.
"The only conclusion for me is that despite the rhetoric, funding of education and the foundation formula has not been a priority for the majority party," she said.
McNeil said the formula would work how it's supposed to if it were funded correctly.
Peters said Missouri's education system is one of the lowest funded systems in the country.
"According to one detailed report, the state of Missouri pays a lower percentage of the total cost of educating its students than any other state except Illinois," Peters said. "We are 49th. Thus, the fortunes of our children turn heavily on the size of their local tax base. As a result, we badly need better state funding and a more just distribution formula."
In 2009, the Missouri Supreme Court decided in another case that the state is not obligated by the constitution to provide each student with a substantially equivalent education. Nor, is it obligated to provide an adequate education other than to fulfill the constitutional requirement of spending at least 25 percent of the state budget on schools.
According to the Department of Elementary and Secondary Education, the foundation formula has been demanding more than $3 billion.
McNeil said the reason why republicans say they are funding education in the 30-35 percent range is because the General Revenue fund is shrinking.
"GR is getting smaller and smaller so it's easier and easier to meet 25 percent," she said.
McNeil said when Missouri citizens decided to allocate 25 percent of the revenue to education, dedicated funds did not exist. All of the state revenue went into General Revenue.
"Over the last 60 years or so, taxpayers have approved more and more dedicated funds like: sales tax for roads, for museums, for conservation," she said. "Dedicated funds are kept in a separate bucket and that bucket got bigger and bigger as the General Revenue bucket shrunk."
She said the dedicated funds make up half of the state's funds and are not included when calculating the percentage of money spent on education. McNeil said if the dedicated funds and General Revenue were combined, "it would be easy to see" that education is not being funded at 25 percent.
"If dedicated funds were counted, Missouri would be spending about 23 percent of state funds on education rather than the often touted 35 percent," McNeil said. "If dedicated funds and General Revenue were combined as they were when the 25 percent was written into the constitution, then the state would not be meeting its constitutional responsibility."
Court documents from the case and Peters explain that, although Article 9 does contain the 25 percent requirement, it does not mandate for “equitable per-pupil” distribution of funding among Missouri’s school districts.
“In 1865, our education provisions said there will be equitable funding for school children in Missouri. In 1875, that was taken out,” Peters said.
He said because the Equal Protection provision dealing with education was never restored, lawmakers said they could not require equitable equal funding for each student.
Peters said something seems a little off about the court not acknowledging the 1875 Constitution as the “Jim Crow Constitution” that eliminated equitable funding for students as well as the provision that required separate schools for African-Americans.
“It seems ironic to take a provision which was part of a package that today would be viewed as unconstitutionally racist in its intentions and use that intention as a basis for saying there’s no obligation to provide equal funding to all children in Missouri in 2016.”
The Constitution does allow for tax levies in local communities, in Article 10 Section 11(c), to try to fill the gap in funding. The Columbia community approved a 65-cent tax levy increase on April 5.
The levy will provide $14.6 million for Columbia Public Schools to fill a $12.6 million gap left because the foundation formula was not fully funded.
CPS has about 18,000 students and its superintendent, Dr. Peter Stiepleman, said $6,808 per student is needed to properly educate all the students. But, CPS is only getting $6,108 for each student.
Peters said he’s discouraged because legislators cannot fund education using the system they developed.
“It is disappointing that the legislature hasn’t been willing to follow its own instructions,” Peters said. “It created a committee; it came up with a formula, which reflected its assessment of what schools need.”
Another provision in Article 3 Section 36 lists priorities lawmakers should abide by while appropriating funds. Public education is the second priority on the list behind paying off state debts.
Pearce said he thinks the list of priorities stays in center-stage when deciding how to appropriate the funds.
“I think as far as public education is concerned, every senator back home, every state rep, they have public schools back home so it one issue that definitely affects everybody and so I do think we strive to meet that obligation,” Pearce said.
But he said when funds are diverted from education, they’re most likely going to social services.
“By far, in a way, our biggest growth in the budget has been social services, primarily Medicaid,” Pearce said. “And so when we look at where does money goes if it’s not going to education, well more than likely it’s going to Medicaid and growth of social services.”
The foundation formula is calculated by:
[weighted average daily attendance] x [state adequacy target] x [dollar value modifier] = subtotal of dollars needed – [local effort] = state funding
The state adequacy target is the amount of money that is needed to provide each student with an “adequate” education. In Article 9 Section 1(a), the Constitution states “general diffusion of knowledge and intelligence” is “essential to the preservation of the rights and liberties of the people.”
Court documents for the Committee for Educational Equality v. Missouri case notes that Section 1(a) provides the purpose of Missouri’s public education system. But, “provides no specific directive or standard for how the State must accomplish a ‘diffusion of knowledge.’”
Senate Bill 586 moves to re-instate a five-percent cap on the growth of the current operating expenditures used to calculate the adequacy target, which is measured every two years. The bill also states that the adequacy target can never decrease.
The 5 percent cap was removed in 2010 because a spike in revenue was expected to come from the gambling industry and was supposed to fund the foundation formula, but the money didn’t come like expected.
“In 2010, under the promise of high revenues coming in from gaming, because they were removing the caps on gambling, that we were going to have money than we can spend on education and that didn’t happen,” Wood said.
Wood said, without the cap, it is impossible to fully fund the formula because the adequacy target grows too high to fully fund.
“When we took the caps off in 2010 and the formula actually became fully implemented the growth of the number that we have for the adequacy target went out of control and we ended up being $500-600 million behind,” Wood said. “Now that the 5 percent cap is missing, that continues to grow. Every time we put more money into the formula that number gets bigger, and without the cap we can never ever reach it.”
The bill passed the Senate unanimously and passed the House with an overwhelming majority. Gov. Nixon vetoed the bill on May 4, but the legislature overturned the veto on May 5.
Nixon says SB 586 would cut funding for the K-12 foundation formula by $418 million.
“That’s why I’m disappointed that on the same day the State Board approved these high standards for students, the Missouri legislature passed a bill that would lower the bar for the state’s obligation to schools by cutting the foundation formula target by more than $400 million,” Nixon said in a statement.
Wood said the foundation formula could be better but the state only has a limited amount of funds.
"The foundation formula has several flaws that need to be addressed and reinstating the 5 percent cap is a move in the right direction," Wood said. "I do not see education as an expense as much as an investment"
Pearce said Missouri has a $27 billion budget and a third of it is discretionary. The legislature allocated an additional $71 million dollars to the foundation formula for the 2016-2017 school year during this session.
Butler said he thinks the Republican lawmakers are just funding it for the credit.
"The Republican party wants to say they have fully funded education without actually doing it," Butler said. "They want to take credit for erasing the disparity between poor students and rich students knowing that they haven't."
Wood said he thinks the education system will always demand more money, but he doesn’t see that as a bad thing.
“There is no way to fully fund education,” he said. “Now, there is a way to fully fund the foundation formula. That’s two different things. With education, there’s always going to be another program, something else we can do to help the children. It’s a never ending thing.”
But McNeil said the legislature has acted unconstitutionally while funding education and shouldn't cheat to make the funding requirement.
"Don't move the goal post and say we're fully funding when we clearly are not," she said.
Professor Philip Peters, Jr. full-length interview
Rep. David Wood full-length interview
Sen. David Pearce full-length interview
Rep. Margo McNeil full-length interview
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