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Missouri’s school funding strategy recognizes that some children and communities need more financial support to meet education standards.
It directs extra funds to districts that have a harder time raising local property taxes, and to children who have special needs, are learning English or are living in poverty.
But experts say while the system has good intentions, the devil is in the details.
Parts of Missouri’s funding strategies undermine its equity goals. School finance researchers named issues that include:
- A method of counting enrollment that penalizes higher-poverty schools that struggle with attendance.
- A “threshold” system that means some districts don’t get additional funding for children with greater needs.
- Funding levels based on outdated property values that lead districts with high economic growth to receive more funding than the formula is supposed to provide.
- More reliance on local funding — which particularly burdens low-income districts —- compared with nearly all other states.
Overall, this leads to a situation where some districts receive state aid they don’t need while others are stretched thin as they attempt to serve children who need more resources.
“We have a large portion of students across the state who experience some form of economic disadvantage,” said Cameron Anglum, an assistant professor of education, policy and equity at the Saint Louis University School of Education.
“It’s really important that the state funding formula serve those kids effectively, particularly those kids that live in districts that don’t have the local property wealth … to provide an adequate education.”
What makes a good school funding system
Bruce Baker, a professor and chair of the department of teaching and learning at the University of Miami School of Education and Human Development, said the main goals of a school finance formula should be adequacy and equity.
Adequacy means there’s enough funding for the school to meet certain goals. Equity acknowledges that some students or schools may require greater funding to meet those standards.
To illustrate, Baker referred to the School Finance Indicators Database run by the Albert Shanker Institute and Rutgers Graduate School of Education.
The database calculates that in 2019, the latest data available, the 20% of districts with the highest poverty rates in Missouri needed nearly $12,000 more per student to reach national average test scores than the 20% of districts with the lowest poverty rates.
Instead, the database shows students in highest-poverty districts were receiving only about $1,000 more than students in the most affluent schools.
Baker, one of the main researchers for the database, said the numbers are based on a statistical model that uses data on student characteristics, hiring costs and district size to calculate necessary funding levels, which are different in each state.
James Shuls, an associate professor of educational leadership and policy studies at the University of Missouri-St. Louis, said school funding “reflects the values of people” and appropriate levels should be determined through the political process.
Shuls said he personally values choice, equity and efficiency in education funding. He previously worked for the Show-Me Institute, where he authored a Missouri school finance formula primer. The institute is a think tank “dedicated to promoting free markets and individual liberty” and supportive of policies that increase “school choice.”
An ideal funding formula should be “dynamic,” said Shuls, reflecting changing local resources and specific student needs to better promote equity.
Instead, Missouri’s formula reflects outdated property values and school funding levels, Shuls said.
How Missouri’s school funding formula works — and doesn’t work
Missouri’s school funding formula starts with an “adequacy target,” the amount of money needed to educate a single student. It multiplies that number based on student attendance, area cost of living and, in some cases, student characteristics that might require extra funds such as disability or learning English.
The formula then factors in how much funding districts can raise from local property taxes.
Anglum, the SLU professor, said one equity challenge is that the state doesn’t manage a majority of the funding that goes to schools.
Some state funding also goes through programs that don’t have the same equity focus as the main formula.
Missouri ranks 47th out of 50 states when it comes to the percentage of school funding that comes from the state. When all sources — local, state and federal — are combined, 2018-19 data from the National Center for Education Statistics shows that K-12 per-student spending in Missouri ranks 32nd in the nation.
Additionally, 2021 data from the National Education Association, a prominent teachers union, shows that not counting the District of Columbia, Missouri has the second-highest percentage of funding coming from local sources and the smallest percentage coming from state sources.
“When we are relying predominantly on local resources in order to fund education, higher-wealth districts are going to win out and lower-wealth districts are going to lose out,” Anglum said.
Traci Gleason, vice president for external affairs at the Missouri Budget Project, said lower state funding can cause localities with fewer resources to choose between underfunding services — including education — or imposing burdensome levels of property and sales taxes.
‘No excuse’ to use average daily attendance
When legislators reformed school finance in 2005, they also included “hold harmless” provisions to ensure no district would receive less state money under the new formula.
Shuls said that was a sensible way to prevent abrupt funding dips for some districts under the new system. But the “hold harmless” provisions didn’t phase out, meaning many districts are still being funded at outdated levels instead of updated, equitable ones.
When the formula calculates districts’ ability to raise local property taxes, it’s using property values that are now more than 16 years old. That means the state is giving districts with growing property values more funds than they need to meet targets, instead of distributing that money in other ways.
Baker, the University of Miami professor with experience in Missouri and Kansas, said Missouri’s “hold harmless” provisions aren’t even the biggest factor that prevents the state from having a “progressive” funding system. (In this case, “progressive” means districts with greater need spend more money per student.)
Hold harmless provisions tend to partially undo reforms, he agreed. “But I’m not convinced that any of the changes they were making would have very aggressively moved it in the right direction anyway.”
Instead, he said the state’s method of calculating attendance financially penalizes districts that most need support.
Missouri calculates the number of students in each district by using the average daily attendance instead of the total number of students.
That means a school with an 80% attendance rate on the average day could see its funding cut by 20% compared to an otherwise identical school with perfect attendance.
Baker said that’s especially problematic when it comes to equity because schools with lower attendance rates tend to have higher rates of students living in poverty.
“It’s been explained to policymakers in every damn state that it is discriminatory and erases any need adjustment to fund on average daily attendance, and only a few states are bold enough to still do it,” he said. “There’s no excuse for doing it. There’s no legitimate incentive that funding on average daily attendance will, you know, cause attendance to improve.”
Anglum and Shuls agreed that using average daily attendance penalizes poorer schools, although Shuls said there are pros and cons in all methods of calculating attendance.
Another quirk of Missouri’s system is that while it “weights” students who are typically more costly to educate, it only does so when the percentage of students in a specific category exceeds a specific threshold.
For example, the threshold for students receiving free and reduced-price lunch — a common way to estimate numbers of low-income students — is a bit more than 30%. Schools that serve a higher percentage than that get extra funding. Meanwhile, a district serving 25% students in that category doesn’t receive more funding than a district serving 5%.
Shuls, Baker and Anglum all criticized the use of thresholds. Shuls suggested the state could even differentiate the amounts granted for special-needs students — who can have very different funding needs — to better create a system where money “follows the student.”
How Missouri compares to Kansas
Baker said that over the past decades, Kansas has strengthened its school finance system while Missouri’s has weakened.
Baker formerly taught at the University of Kansas and was involved in discussions surrounding school finance reform in both Missouri and Kansas. He recently published “School Finance and Education Equity: Lessons from Kansas,” which he said includes many comparisons with Missouri.
“The costs to get to the same outcomes are a little lower in Kansas, but Kansas also much more robustly funds their system,” Baker said.
In Kansas, 58% of districts are spending above the adequate level and achieving results above the national average, Baker said. In Missouri, only 43% of districts are doing the same.
Meanwhile, about 13% of Kansas districts are spending below the targets and achieving below the national average. Nearly 30% of Missouri districts are in the same boat.
“There’s much more inequality in Missouri; there’s far more kids in inadequately funded districts that then have inadequate outcomes to go along with that,” Baker said. “Kansas has just done much better in that regard, over time.”
The Beacon is working on a larger story about Kansas’ school finance formula.
A report from the Missouri Budget Project shows Missouri’s overall K-12 funding target for each student, adjusted for inflation, is less than the 2007 amount — by about $1,000.
Gleason, the project spokesperson, said that while Kansans reacted to abrupt funding cuts several years ago and restored funding, Missourians haven’t been as aware of gradual funding cuts.
“Missouri has been more like the frog in the frying pan, or boiling water … We just haven’t noticed because it’s happened so slowly over time.”
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