CCS HCS SS SCS SB 287 -- EDUCATION

This bill comprehensively revises the state education funding
formula to be phased in over seven years, beginning July 1, 2006.
The current formula is tax levy-driven with an equalizing factor,
the guaranteed tax base, to achieve the goal of providing the
same amount of money per student, for each penny of the property
tax rate levied by the school district.  The new formula is based
on student needs, with the main objective being a minimum amount
of money that is needed to educate each child, known as the state
adequacy target (SAT).  The SAT is the minimum amount of money a
district needs to educate each student.

To calculate the target, the Department of Elementary and
Secondary Education will identify performance districts, which
have perfect scores on their annual performance report, and the
amount that those districts spend.  This amount becomes the basis
for the SAT, which will be recalculated every two years using the
most current list of performance districts.  The formula assigns
additional weight to pupil counts for students who qualify for
free and reduced lunch, receive special education services, or
have limited English language proficiency.  The aggregate
percentage of the performance districts' weighted pupil counts
forms the basis for thresholds.  Any district with weighted pupil
counts above the threshold percentages will receive additional
"weight" for those students.  These additional weights are added
to the district's student population to arrive at the district's
weighted average daily attendance.

The product of the state adequacy target multiplied by the
weighted average daily attendance is then multiplied by the
dollar value modifier (DVM).  The DVM is an index corresponding
to the wage-per-job, on a regional basis, that captures 15% of
the deviation from the state's median wage-per-job.  The DVM
cannot be applied at less than a 1.0 value.  From this total, the
district's local effort will be subtracted; and if the result is
above zero, this number is the district's state aid payment.  If
the number is zero or below, the district will receive no less
revenue on a per weighted average daily attendance basis than the
district received in the 2005-2006 school year.  The DVM is also
applied to the hold-harmless payment, with the full effect of the
DVM phased in over a three-year period.  For school districts
with an average daily attendance of 350 students or less, the
hold-harmless calculation will be based on the actual amount of
state revenue received by the district in the 2004-2005 or
2005-2006 school year, whichever is greater, not a per-student
figure.

The local revenue figure used in a district's state aid
calculation is the amount of locally generated revenue the
district would have received in Fiscal Year 2005 if its operating
levy was set at $3.43.  The $3.43 amount is called the
performance levy.  In every year after the first-year
calculation, a district's local effort amount will be frozen,
except for growth in fines, so that any growth in local revenue
collections will not be used to offset state aid payments, as is
currently done.

The categorical aid streams for transportation, the career
ladder, vocational education, and educational and screening
programs continue unchanged.  The line 14 "at-risk," gifted,
special education, and remedial reading categoricals are folded
into the district's base amount, along with the cigarette tax and
free textbook moneys.  Revenues from gaming, which will be
deposited into the Classroom Trust Fund established in the bill,
will be distributed on an average-daily-attendance basis.  The
bill also creates option districts, which may elect to forgo
state aid in return for regulatory relief.  Placement of moneys
in school district funds and the transfer of moneys between funds
are revised to reflect the new formula and changes to the
certificated salary compliance requirement.

An additional $15 million annually will be distributed among
districts with 350 students or less, with two-thirds of the
funding in proportion to average daily attendance and one-third
directed toward small districts that are at or above the
performance levy, in proportion to their levies.  During the
seven-year formula phase-in period, districts with significant
decreases in gifted and summer school programs will have funds
corresponding to those decreased levels reduced from their
current-year payments.  A financial incentive for districts to
provide summer school will be triggered if a 25% decrease from
the 2005-2006 school year in the statewide percentage of summer
school attendance occurs.

Clarifying language regarding state aid payments to the voluntary
transfer program in the St. Louis area is included, and the
percentage of reimbursement for transportation of those students
is raised.  The Joint Committee on Tax Policy will analyze local
property tax assessment practices and submit a report to the
General Assembly and the State Tax Commission, which must ensure
that all counties are assessed accurately.

The bill increases minimum teacher salaries; revises charter
school laws; and enacts other changes regarding accountability.
Many sections of the bill revise existing law to correspond to
the new terminology used in the formula, and many obsolete
provisions are deleted.

The bill includes changes to special education services,
including a requirement for the department to reimburse school
districts for the costs of special education students that exceed
three times the current expenditure per average daily attendance.

The special education policy changes will become effective on
August 28, 2005.  The remainder of the bill will become effective
July 1, 2006.

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm