Belt-tightening Time in Public Education

A version of this commentary appeared in the Columbia Missourian.

Make no mistake—people across Missouri are losing their jobs, and state income tax revenue is going to decline as a result. The timing of Missouri’s fiscal year may obscure the crisis to some extent this year, but next year will be tough. Public school districts are going to take a hit. Education is one of the very few areas of the Missouri budget that can be cut, and it will be. School districts and the legislature should be planning now.

But before we get to what districts should be doing, we need to acknowledge that we won’t have firm numbers on how many students are being educated by each district for several years. For per-student funding purposes, Missouri law allows districts to use their current enrollment or the enrollment from either of the two previous years to calculate state public education spending. Obviously, districts will want to use the highest possible number. But this year in particular students are moving around—opting for microschools, private schools, or homeschooling. There is some evidence that enrollment in the MOCAP public virtual education program is way up. At some point, we need to figure out where every student is being educated this year. It may be hard to take attendance on Zoom, but legislators cannot make informed decisions about the public education budget without solid enrollment numbers.

In the meantime, districts need to up their fiscal game, and here are a few suggestions:

• Reduce administrative costs. According to the most recent federal data (from the 2016–2017 school year), Missouri spent almost $350 million on district administrators, school boards, and their support staff. It may be time to reconsider having 520 school districts in a state with 114 counties.
• Consider how noninstructional services are provided. Could transportation or food services costs be reduced through competitive contracting? Could districts work together to share resources?
• Reconsider collective bargaining agreements and employee benefits. Step-and-ladder pay schedules, coupled with expensive pension obligations, make it very difficult for districts to reduce expenditures when their revenue declines. Salaries and promotions should be flexible, and retirement plans should be transportable 401(k) accounts.
• Delay or forego capital projects. These projects commit funds for the long term and reduce flexibility during economic downturns.

The state legislature could be doing its part as well. The current Missouri school funding formula has too many outdated “hold harmless” clauses that distort the distribution of state public education funds and, in some cases, send state funds to wealthy districts that would not normally qualify. According to the Forward through Ferguson “Still Separate, Still Unequal” project, in 2017–18, almost half of the 29 school districts in St. Louis County received hold harmless funding, including $578 in state funding per student in Ladue and $562 per student in Clayton. In addition, nearly half of the school districts in the state use property values from 15 years ago to figure out how much their local contribution of public education dollars should be, regardless of how property values have risen or fallen. That needs to change.

Finally, this year has made it clear that it’s time for public education funding to follow the child. Missouri parents who in the past gave little thought to school choice are discovering what it means to have no choice but a bad choice, and those who can afford to do so are taking matters into their own hands. Parents across the state are paying for tutors, pod coaches, private school tuition, and childcare. Meanwhile, their children are still being counted in the enrollment numbers of the schools they attended last year. It is only fair to give all parents access to a portion of their state education funding so they can spend it on options that work for their children. In several other states, governors have used stimulus funds to give parents quick access to scholarships to pay for these much-needed options. Missouri should do the same and make such scholarships a permanent option going forward.

The storm that was 2020 is going to linger for a few years, and policymakers in Missouri should be taking steps right now to weather it.