Area districts say possible cuts result in underfunded formula, over $40M in the red

Superintendent Jerry Noble [Click to enlarge]

As information begins to slowly trickle to schools from the state government, local superintendents are saying the cuts could be worse than what was presented by Missouri Commissioner of Education Chris Nicastro late last month.

According to Kennett Superintendent Jerry Noble, although some modifications are being made to the funding formula, it looks as if the current year will be underfunded by more than $40 million.

Noble said the districts usually have a supplemental appropriations this time of year, however, it appears as if that will not be happening this year, leaving the formula underfunded by $43 million. He went on to say that the 2011 request is $87,705,320 short of the amount required for full funding.

Superintendent Raymond Lasley [Click to enlarge]

"I keep reading where these legislators say they will protect the formula but they are not even protecting it for this year," Noble said.

Noble said the shortfall to the Kennett district will be more than $100,000.

"What they told us was to expect a two-percent decrease in funding for this year," Noble said, adding that the district will be approximately $140,000 short this year for the formula, not including program and transportation cuts.

"Each month, as more revenue comes up short, they keep making cuts," Noble said. "So we don't know where we're going to end up."

The administrator said the district could be short about $240,000 next year, not including program and transportation cuts.

"We also receive Proposition C sales tax," Noble said. "Which, if it is down, there would be another reduction. If sales tax is down 10 percent, we would lose an additional $30,000."

Noble said the district is currently in the process of positioning itself for the funding cuts.

"We are already meeting to see how we can cover this shortfall without drastically increasing class sizes," Noble said. "We will not really know for sure until the appropriations are made. When the session is over in May, we will know what the appropriations are. If the tax revenue is under what is projected, we will be going through this again.

"We're trying to prepare for the worst without overreacting. We are trying to prepare for a 10 percent cut in our overall state funding. We will only cut as much as we have to this year."

At one of the smaller districts in the area, Southland Superintendent Raymond Lasley says he, too, is unsure of what will happen.

"The official line from [the Department of Elementary and Secondary Education (DESE)] seems to be 'everything is rosy,'" Lasley said "There may be a two-percent reduction in the foundation formula this year and a four-percent reduction in 2011. "Nobody seems to know anything about what the legislature will do about career ladder, summer school, or even transportation.

"They fail to mention that over one-fourth of the new budget is built on federal money in a new stimulus bill that has not been finalized in Washington. They also fail to mention that the state's revenues for January were down 22.4 percent from January 2009.

"The legislature passed a law that requires more physical education time for elementary students. They did not mandate funding for these new positions so it is possible that schools may be cutting classroom teachers while adding new PE teachers."

In a letter dated Jan. 25, 2010, to all senators from Donald Thalhuber regarding formula budget proposals, it says the supplemental appropriation bill does not contain the funding to fully fund the state's formula.

"Governor Nixon's fiscal year 2010 Supplemental Appropriation bill currently does not contain the funding necessary to fully fund the state's public school funding formula, the result of which is a formula underfunded by $43,000,589 in the current fiscal year," the letter states. "The Governor's fiscal year 2011 budget proposal also does not fully fund the formula; specifically, the budget request is $87,705,320 short of the amount required for full funding. If the Governor's budget proposal becomes law, and the 2010 Supplemental Appropriation bill is not altered by the Governor, the seven-year phase-in of the SB 287 formula will effectively be put on hold. This memo is not meant, nor should it be construed, to place a value judgment on the Governor's budget proposals. Instead, its intent is to discuss the potential means by which the legislature could most effectively respond to Governor Nixon's recommendation."

The letter goes on to give four options for the senators to consider.

Option No. 1 suggests simply underfunding the formula and doing nothing else.

According to the letter, under this scenario, "the General Assembly would effectively be abdicating the role of school funding to DESE and any guidance the Department might receive from the Governor's office. Since the Department would lack the necessary appropriations to fund the formula at the statutorily required levels in both fiscal years 2010 and 2011, the Department would have no choice but to prorate the formula payments in some manner."

Option No. 2 suggests including language in both the supplemental appropriation bill and HB 2 specifically overriding the current statute.

According to the letter, under this option, "specific language would be integrated into the Supplemental Appropriation bill and in HB 2 to overtly override the current language in the formula, most likely by pushing back the phase-in percentages in a manner that corresponds to available appropriations."

Option No. 3 suggests altering the formula statutorily to coincide with available appropriations.

According to the letter, this option "would necessitate a separate bill be passed, with an emergency clause, altering the formula. The simplest means of accomplishing this end statutorily would be to push back the phase-in by decrease the phase-in percentages for the forthcoming year or two in a manner consistent with available future fiscal year appropriation."

Option No. 4 suggests cutting something else and fully funding the formula.

According to the letter, "by design, cuts in other areas do not possess the same inherent complications as under-funding the formula during the phase-in period. The General Assembly may wish to consider cutting some other area, like the transportation categorical or career ladder or some other appropriation and use the savings to fully fund the formula."

In conclusion, the letter states that "if the General Assembly utilizes options No. 2, No. 3, or No. 4 above, or some combination thereof, action must be taken immediately, starting with the 2010 Supplemental Appropriation bill. Without inserting the funding necessary to fully fund the formula or at least some language authorizing the department to pro-rate in the supplemental bill, there will necessarily be some sort of proration by the Department, unguided; by the legislature, in [fiscal year] 2010."

The current fate for schools across the state remains unknown, however, many are planning for the worst.

For a full version of the letter quoted in this article, click HERE.