Funding Missouri's public schools comes down to one not-so-simple formula

Jennings Superintendent Tiffany Anderson takes her turn as a crossing guard, helping middle school student Courtney Abernathy across a busy intersection. Tim Lloyd, St. Louis Public Radio. 

The arcane world of school finance in Missouri can be harder to understand than the most obscure poem or the most difficult calculus problem. But clear away all of the acronyms and calculations and modifications, and it comes down to two simple questions:

Should the quality of children’s education depend on where they live? And how important is money to education anyway?

Of course, the questions may be simple to ask, but if they were simple to answer, then school finance wouldn’t be such a thorny topic. As it is, though, when it comes to education, there is an inextricable link between money and quality. Mike Wolff, a former chief justice of the Missouri Supreme Court who has also worked in the governor’s office on education issues, puts it this way:

“If money were unimportant, then people who live in the wealthier districts wouldn’t be so concerned about it, would they? But they’re sure interested in keeping the level of spending for their children at a higher level. I’m not faulting them for that ...

“There’s no substitute for money. You can distribute it all you want to, but you have to have more of it.”

The issue, Wolff added, is making sure the money goes where it is needed most.

“Resources are where they are and they're not where they are not," he said. "So unless you have a mechanism to supplement those school districts that do not have the resources, then you have the disparity of the resources that are available. The mechanism of getting them from one area to the other, that is the unresolved question.”

Charlie Shields of St. Joseph has studied the problem from two different angles. As part of the General Assembly, he played a big role in devising and passing the most recent version of Missouri’s foundation formula. Now, as president of the state board of education, he wants to make sure the formula gets all the money it is supposed to get.

Still, he said, “if it was simply an issue of putting more money into education, then we would. People would realize that, and you would have great success and you wouldn’t have any challenges around education.”

The challenges, he and others said, is that students spend only so much time in school. What they bring to the classroom plays a big role in how well they perform once they are there. Mike Jones, another member of the state board, put it this way:

“If we're trying to educate all children, to give them the maximum opportunity to be successful, then what we have to do is compensate for the fact that this child has poor parents and this other child has rich parents.”

Tiffany Anderson, superintendent of the Jennings school district, knows about the problems that poverty poses, but she has also shown that those problems can be overcome. She has taken the district from the point of almost losing accreditation to meeting the benchmarks needed for full accreditation.

Anderson has accomplished this by lacing up her signature tennis shoes and being constantly on the move, literally. On a typical day she is visiting schools, doing the district’s public relations, even taking a shift as a crossing guard — so more money can go directly toward teaching and learning.

“From a budgetary perspective, most of the members of my staff we have maybe 10 different roles that we juggle," she said. "Crossing guard happens to be one of the jobs that I have. We choose to not to direct funds to hire people for those other things so we can divert money into the classroom.”

On the other end of the financial spectrum, Clayton School District Superintendent Sharmon Wilkinson doesn't have to do crossing-guard duty. Her schools enjoy strong financial support from her community and a lot of office buildings that generate tax money for education. She noted that Clayton is ready to help other districts in ways that may not be financial.

“I think we have a responsibility to ensure that we provide each student that we serve [with] the best possible education,” Wilkinson said. “So there are many ways in which school districts come together to support each other and cooperate with each other ...

“I think a strict focus on the haves and have-nots causes us to think differently, rather than thinking broadly about what we do have, and then how can we bring a community in and develop a community focus around our students.”

Simplicity vs. fairness

It’s politics season, and presidential candidates have started talking about taxes. Naturally, some have brought out the old promise of making your annual tax return so simple, it could fit on a postcard. So why can’t school finance work like that as well?

Experts will tell you that simplicity is one goal, but fairness is another, and the two are often at odds with each other. Missouri’s foundation formula, the thing that determines how much the state allots for each school district, is a good example.

Ron Lankford, a longtime school superintendent in southwest Missouri, is now the state’s deputy education commissioner in charge of financial and administrative services. He also may be one of the few people in the state who really understands how the formula works.

Theoretically, he says, this is what should happen:

“Let’s go out and look at the school districts that are meeting the targets of the state of Missouri. Let’s look at what they are spending. Then we will operate from the assumption that the amount they are spending should be sufficient for any school in the state of Missouri to meet the educational needs of the students it serves.”

That amount, called the state adequacy target, is currently $6,716 per student, Lankford said.

But that’s just a start to figuring how much schools get.

The calculation begins with a district’s attendance — the more students, the higher the state payment. But the formula also tries to take into account certain factors that cost a school district more money.

One is how many students qualify for free or reduced-price lunch, a measure of poverty. Another is how many students have disabilities and require special education. A third is how many students do not have English as their main language.

Each of those factors, depending on how large they are, can result in a district’s adequacy target increasing. So too can the cost of living in the area where a district is located — the assumption being that it costs a district in the St. Louis area, for example, more to hire teachers and just do business in general than it does in some rural areas.

The final factor is called local effort — how much a district could raise based on the value of property within its boundaries. The state sets this number at $3.43 per every $100 of assessed property valuation. This amount is then subtracted from what the formula says a district should receive. 

As part of the most recent foundation formula was approved by lawmakers, the local effort deduction has been frozen at the 2004 level. 

Lankford explained that there are a couple of exceptions to this rule.

  • If property values drop below what they were in 2004, a district could receive more funding because its potential to raise local tax dollars has diminished.   
  • A county can redistribute revenue it collects from fines to districts. If this amount is more than what it was in 2005, the local effort amount can be adjusted.   

If assessed values go up, however, a district wouldn’t get less from state support. 

“If you have a massive increase in your local effort — maybe you had a huge corporation come in, or there was something that significant changed — that is not deducted off of your state funding,” Lankford said. “That has been frozen since first day of the formula being in place.”  
Districts can of course raise more money locally, but that can result in vastly different property tax rates. A district like Clayton, will be able to have a lower tax rate; districts where the property is assessed at a lower value, like much of north St. Louis County, would have to have a higher rate to bring in the same amount of money. 


From equity to adequacy

Changes in school funding formulas often are the result of lawsuits filed by districts or others who feel they aren’t getting their fair share of education dollars.

That was the case in 1993, when lawmakers approved a formula after Cole County Circuit Judge Byron Kinder found that discrepancies in support created a system in Missouri where schools ranged “from the golden to the God-awful.” The result was the Outstanding Schools Act, whose premise was that school finance should be distributed more equitably.

In 2005, the goal of the formula changed, from equity to adequacy. Shields, a former president pro tem of the Missouri Senate who worked on the latest formula, explained that the shift was prompted by several factors.

“Equity would mean that in a perfect world, all things being equal, the same dollars would be behind every student in the state,” said Shields, who is now president of the state board of education.

“In some states, that’s possible. In Missouri, with so many different school districts, and a long, long history of local control, that’s very difficult to achieve. Basically, what you’re telling local communities is that, no matter what you want to do for education, what you want to do for your student, you’re prevented from doing that.”

A formula based on adequacy, he added, would work better, with one big condition: The state has to have the money to fund it fully.

“Any time you make changes to the formula, there’s winners and losers in that," he said. "Then it becomes kind of a food fight. In times when we didn’t have any money, I always like to say, table manners diminish when there’s not enough food on the table.”

The adequacy formula was set to be phased in over seven years, but the efforts smacked into the 2008 recession, when Missouri’s revenue took a big hit. It’s beginning to recover, but Lankford estimated that the state is still $450 million short of what the formula would call for. That translates to $6,110 per student, instead of the $6,716 the formula would call for.

Jones, the former vice president of the state board, said the shortfall means that the spending plan is unproven.

“It’s a fairly sophisticated formula that has never been given the opportunity to work,” he said. “The real challenge is we don’t know if it works or not, because it’s never been fully funded.”

Wolff was a judge on the Missouri Supreme Court when the latest formula was upheld in 2006. In his opinion, he joined the majority in part. But also dissented in part, saying that the formula doesn’t really address how well schools are doing. He is now dean of the Saint Louis University law school.

“With the amount of money to get it fully funded, you were chasing a bigger number every year,” Wolff said in an interview. “So what do you do? You change the subject. Let’s talk about adequacy.

“They picked a bunch of school districts that were doing very well in terms of educating students, and they averaged the per-pupil spending in those districts, and said, 'OK, here’s adequacy.' What that does is just make sure you’re perpetuating a system that’s pretty mediocre.”

No Robin Hoods here

So, is there a way to make school finance more equitable if the formula is based on adequacy but has never been funded?

Districts could use grants, which are usually available for specific purposes. But such one-time money can’t be counted on to sustain a district’s efforts.

“When I was a superintendent, there were times when opportunities were there to apply for grants that I did not encourage our staff to move forward on, because I would always come back and say how are we going to fund that when it's gone?” Lankford recalled.

Still, districts that need money for certain things like technology may have to rely on grants. Jennings' superintendent Anderson put it this way:

“We will continue to write grants and send letters to Bill Gates and people, to say, 'Here's what we're doing,' and hope that they come on board supporting the kinds of outcomes that we have.” 

Some states have tried to equalize funding with what is dubbed a Robin Hood plan — rich districts that raise their own tax funds for education above a certain level see part of that money redistributed to poorer districts. But that doesn’t seem likely in Missouri.

“I don’t think there’s a Robin Hood anywhere near Jefferson City,” Wolff said. “So, let’s not worry about that.”

Another option could be to reduce administrative costs, by shrinking the number of school districts in the state, which Lankford said is now 516, plus two special districts. The smallest of those districts is two square miles; the largest is more than 500 square miles. Each has a superintendent and other administrative positions.

Consider the recommendation of a commission report to eliminate all those districts and create 20 regional ones – thereby cutting back on the money spent on administration.

“Public education in Missouri hurts in many respects and in many areas. Much of its pain is caused by a school district structure which was created to serve a previous era. While a sensible school district pattern alone will not resolve all of the problems confronting the schools, little progress can be expected without it. A major reorganization of school districts is needed.”

But it wasn’t the recent Ferguson Commission that made that recommendation. It was a panel called the Spainhower Commission, whose report came out in November 1968 and was promptly shelved. Lankford recalled being told that “not only was [the report] dead on arrival, it was dead before it ever got on the bus.”

Jones said that there is nothing sacred about the way Missouri schools are organized. “Moses didn't come down from Mount Sinai with 520 school districts for Missouri,” he said.

But Shields doubted whether any elected official is likely to tamper with the current landscape.

“It’s the state version of Social Security,” he said. “It’s the third rail, which nobody wants to touch.”

The problem with proposing consolidation, educators said, is that schools traditionally have been a local function, and no district wants to give up that local control.

“The question is,” Shields said, “can you have 520 school districts but can you make them more efficient. Do you need 520 superintendents? Do you need 520 payroll systems? Do you need 520 professional development systems Are there ways to maybe have just as many school districts, and maintain local control?”

And it’s not just pride in the local football team that stands in the way.

“Half of the school districts in Missouri serve 8 percent of our students,” Lankford said. “The other half serves 92 percent. The strength of those small school districts is they have a zeal about maintaining their schools in their communities, because of their concern if the schools go away, then their communities die.”

But a broader look at the consequences of inefficient school spending may be called for, to help Missouri compete nationally and worldwide.

“Business types say whatever you tax, you get less of,” Jones said. “I would say whatever you don't buy, you also get less of. We don't buy quality education so therefore we get less of it.

“But the single biggest factor in business location is a quality workforce, and that's tied to education. So if you actually wanted to make Missouri competitive, you want a productive workforce. You can't have a productive workforce without quality public education.”

Added Wolff:

“You can throw all these tax incentives around that you want to, but I'm not sure I would want to move my company to a place that didn't have a really solid educational system whose results are here available for me to hire. But also as importantly, for the employees I bring to Missouri, to be able to find good public education for their children.”

And every year that goes by that that education is not up to par, another grade of children gets shortchanged, superintendent Anderson said.

“Time is not on our side,” she said. “Students graduate every year, so every year that performance and resources are delayed, that's a year lost for a graduating class. That's how you have to look at this.”

Story by Dale Singer, Tim Lloyd and Kameel Stanley

Illustrations by Susannah Lohr