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Missouri legislators recap education funding formula process

by Anna Campbell | February 16, 2023 at 4:00 a.m.

If you've ever had questions about how public schools are funded in Missouri, know that Missouri lawmakers have questions, too.

On Wednesday, taking a break from its regular bill hearings, the Missouri House elementary and secondary education committee sat down with a representative from the state Department of Elementary and Secondary Education to figure out how the state calculates the funding that each school district receives.

The calculation, called the foundation formula, was first implemented in the 2006-07 school year.

Kari Monsees, DESE deputy commissioner of financial and administrative services, presented an overview of the formula to the committee.

Committee Chairman Brad Pollitt, R-Sedalia, said last week he hoped the meeting would provide a foundation of knowledge from which to talk about teacher pay increases.

"This is not a hearing, this isn't a meeting to give suggestions on how we might change the formula. It's basically, just want to get an overview on how we fund public schools in the state of Missouri," Pollitt said. "Later on, we may have other meetings that will work on that topic and take suggestions."

Formula components

Major pieces of the funding formula are weighted average daily attendance, the state adequacy target, the dollar value modifier and local effort.

"The general concept is this: you collectively have local resources and state resources, and that mix will vary depending on how many local resources you have," Monsees said. "So if a district has very low property values in total on a per-pupil basis, they're going to generate more out of the state formula, more state funds. If they have high property values in their district and can levy much more in terms of local revenue, they'll receive less out of the state formula."

For many metrics, the formula uses model districts to calculate benchmarks. For instance, initially, the state used districts that were performing at a high level to determine a benchmark for school expenditures.

"The idea being, if those schools can achieve at high level on our accountability system with this level of resources, that should be the model for all schools in terms of what it takes to be successful," Monsees said.

The state adequacy target is calculated every two years based on those high-achieving districts. The original state adequacy target of $6,175 indicated the amount spent by the district per pupil. The number is recalculated every two years based on current high-performing districts by looking at their 2004 expenditures from the beginning of the implementation of the formula and adding in state aid received since then, capped at 5 percent growth.

"We've hit what I would consider an equilibrium at this $6,375," Monsees said, referring to the current state adequacy target -- the measure of what model districts spend per student.

Weighted average daily attendance is a measure of how many students a district serves. A student that attends every day counts as 1 for the calculation of attendance, and a student attending 90 percent of the time would count as 0.9. Some student populations are weighted, however.

Using model districts as a benchmark, the threshold for students receiving free and reduced lunch was set at 30.95 percent. Any students receiving free and reduced lunch beyond that percentage are weighted at up to 1.25 in terms of attendance. The threshold for students with special needs is set at 13.11 percent, and any students beyond that could be counted at up to 1.75, and the threshold for limited English proficiency is 2.29 percent, and any students beyond that could be counted at up to 1.6.

The district's weighted daily average attendance is the highest count from the last three years, including the current year. This provides a "smoothing process"-- if there is a major fluctuation from one year to the next, revenue would remain relatively balanced.

Schools also add in the most recent summer school attendance, which is calculated by taking the total summer school hours attended and dividing by the number of hours in a school year, which is 1,044.

The dollar value modifier is an economic measure meant to account for differing wage rates across the state. The number is recalculated each year, and is a reflection of the gap between local median wages and the state median wage. This usually results in an increase in areas like St. Louis or Kansas City. If an area is below median, the rate is 1, to prevent losing money in those areas.

Calculation

Those three numbers -- weighted average daily attendance, the state adequacy target and the dollar value modifier -- are multiplied together for a total, and then local contributions are subtracted from that number.

Local effort is based on original assessed property values and the average operating levy of the original model districts, $3.43.

"The local effort amount is nearly a fixed number, in that it's looking at the 2004 assessed value, it's set at $3.43. So those two numbers don't change in the calculation unless assessed value actually goes down below that level, which rarely has happened... so a local district that has either growth in assessed value or increases their levy will be able to capture all of that additional revenue without having a deduct or an offset in the formula calculation itself," Monsees said.

Safeguards

There were also two provisions intended to prevent districts losing funding when the state transitioned between funding formulas.

One, designed for small school districts with 350 average daily attendance or less, ensured that districts couldn't receive less money in total than what they received in the pre-2006 formula. Another, for larger schools, ensured that schools couldn't receive less money per pupil than what they received in the pre-2006 formula.

Changes

Those in attendance weighed in on the possibility of "tweaks" to the formula.

Former state Rep. David Wood of Versailles testified as an individual from his experience as a legislator who contributed to the formula.

"Now, the good news of this formula is that it has withstood court cases. So in changing the basic structure or throwing this out and saying we need to blow this formula up is probably a really bad idea cause then you're going to go through the same court cases and have to fight it," Wood said.

He suggested making adjustments to bring the formula up to date instead.

"This committee probably has bills it could be hearing. You're hearing about school finance because there's an awareness that there's probably some factors that need to be tweaked," said Otto Fajen of the Missouri National Education Association.

Print Headline: Missouri legislators recap education funding formula process

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