The School Funding Shell Game

Many proposals are being floated around Jefferson City to fix the student transfer issue. Some of the proposals are no more than a shell game. For instance, the Missouri Association of School Administrators (MASA) suggested simply renaming “unaccredited” schools “academically stressed.” This simple sleight of hand would mean that no school districts are “unaccredited,” therefore, no students would be allowed to transfer. Well, I have my own renaming idea that legislators may wish to consider — renaming parts of the funding formula.

People often complain about the amount of “state funding” for education. The St. Louis Post-Dispatch is notorious for pointing to the rankings of “state” spending and crying foul. Student transfers have been hung up in Kansas City because the district would not pay more than the “state” gives the district per pupil. Lee’s Summit Superintendent David McGehee recently told me on Twitter that the state should cover all costs for transferring students. Well, my sleight of hand will address these problems.

Missouri schools are provided funding based on a complex formula (read my funding formula primer for a deeper explanation). There are several pots of money calculated as “local effort” or local dollars. The biggest pot of money comes from local property taxes. “To calculate how much local revenue can be generated from property taxes, DESE multiplies the assessed valuation, as of December 31, 2004, by 3.43 percent and then deducts collector and assessor fees from the local tax revenue.”  Here is an illustration of how this works.

It doesn’t matter what tax rate the district actually uses. It could be higher than 3.43 percent or it could be lower, but the state will calculate using the $3.43 per $100 of assessed valuation, or 3.43 percent.

Those dollars are called “local dollars.” They could just as easily be called “state dollars.” After all, that is the consistent figure the state uses to determine how much additional funding a district needs to meet the “state adequacy target.” The state adequacy target is the dollar amount that the state ensures every school district will have to educate students.

It may sound crazy to call local dollars “state dollars” but it is not unprecedented. This is what Arkansas does and that state outranks Missouri in the rankings the Post-Dispatch always uses.

This simple sleight of hand would not change tax rates, would not increase taxes, and would not change anything about school funding. It would increase what we call “state funding” for education. It would improve our rankings in the state-by-state comparisons. And it would increase the “state” share of funding used for student transfers.