Make no mistake — people across Missouri are losing their jobs, and state income tax revenue is going to decline. The timing of Missouri’s fiscal year may hide it a bit this year, but next year will be a tough one. 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. Districts should be planning now.
But before we get to what districts should be doing, we need to acknowledge 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 laws allow districts to use their current enrollment or the enrollment from either of the two previous years. Students are moving around — opting for micro-schools, private schools or home schooling. We know it’s hard to take attendance on Zoom, but we need solid enrollment numbers to inform public education budget decisions.
In the meantime, districts need to up their fiscal game, and here are a few suggestions:
- Reduce administrative costs. Across the state, Missouri spent almost $350 million on district administrators, school boards and their support staff in 2016–17. 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?
- Reconsider collective bargaining 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 The current school funding formula has too many outdated “hold harmless” clauses that send state funds to wealthy districts that would not normally qualify. 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 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 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. Parents across the state are paying for tutors, pod coaches, private school tuition and child care, while their children are still being counted in the enrollment numbers of the school they attended last year. Several 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 it permanent.
The storm that was 2020 is going to linger for a few years, and immediate steps should be taken to weather it.
Susan Pendergrass is the director of research and education policy at the Show-Me Institute.