Efforts to fix Missouri's school aid formula, transfers appear knotted -- again

JEFFERSON CITY • Public school leaders across the state have implored the Missouri Legislature to fix a knotty student transfer law and an underfunded school aid formula.

They've warned that open-ended transfers could result in overcrowded suburban classrooms and bankrupt city schools. They've predicted that a quirk in the aid formula could force some small rural schools to close.

But for the second year in a row, legislators appear unlikely to come to grips with either problem. Why? House Republican leaders have tied both issues to a far-reaching school choice agenda.

Its cornerstone is a subsidized scholarship program to help students in unaccredited districts pay for private or parochial schools. Supporters say the scholarships would provide options for impoverished children.

But using tax credits for private tuition draws stiff resistance from many rural Republican lawmakers, who view the scholarships as siphoning $40 million away from public schools.

Some legislators also are leery of provisions in the bill that would allow expansion of charter schools statewide and abolish tenure for public school teachers hired after July 1, 2013.

So, as Republican leaders twist arms and interest groups on both sides ramp up their lobbying, the 62-page omnibus bill remains in a holding pattern. While some parts are needed, "there's too much bath water to drink to get to the baby," said one opponent, Rep. Barney Fisher, R-Richards.


The stalemate could leave a big question mark hanging over schools in the St. Louis region.

A 2010 Missouri Supreme Court decision held that students in unaccredited districts — such as St. Louis Public Schools and Riverview Gardens — could transfer to better schools in the same county or adjacent counties.

The home district is required to pay the suburban school's tuition and cover transportation. The law does not allow suburban districts to turn students away for space reasons.

The ruling, known as Turner v. the School District of Clayton, remains tied up in a lower court, with a trial slated for this week in St. Louis County Circuit Court. Among those watching as the suit — and several related cases — advance is the Kansas City School District, which lost its accreditation in January.

The ramifications are vast.

In the St. Louis region, a study commissioned by Clayton schools estimated that an additional 13,500 students in St. Louis would seek to transfer to suburban schools. Paying the bill, which could top $135 million, would cripple the St. Louis district.

The "Turner fix" would let school districts set criteria for accepting transfer students from unaccredited districts. The main criteria would be whether enough teachers and classrooms were available.

House Education Committee Chairman Scott Dieckhaus, R-Washington, acknowledges Republicans are tying the Turner fix to the broader bill as leverage. He said it's the only way to get suburban districts to support changes in the $3 billion school aid formula.

"There really isn't much benefit for them to work on the formula" otherwise, he said.

Some wealthy St. Louis County districts have their state funding basically frozen at an earlier level. Thus, if no formula change passes this year, they could escape cuts, with other school districts — which are predominantly poorer — bearing the burden of the underfunded formula.

As for the rest of the omnibus bill, Dieckhaus said he lumped expanded charter schools, virtual schools and tax credit scholarships into the package because they are part of the Turner fix and would help accommodate the thousands of students who want out of failing city schools.

While the St. Louis Public Schools have made academic strides, Dieckhaus said children shouldn't have to wait for the district to regain accreditation. That, he said, is expected to take three more years.


But throwing everything into an omnibus bill has risks, and the tax credit scholarship proposal sparks strong opposition.

Democratic Rep. Tishaura Jones of St. Louis said she was left with the choice of opposing her own legislation — she sponsored the proposed charter school expansion that has been rolled into the bill — or swallowing the tax credit scholarships, which she opposes.

She voted "no" when the bill came out of committee and predicts it will die if it comes to a vote on the floor. She has heard that supporters have lined up only 59 Republicans to vote for the bill — well short of the 82 votes needed.

"When you take an all-or-nothing approach like the speaker's office is, I think it's dead," Jones said.

A similar scholarship plan lost 62-96 in the House in 2007 despite a huge push by the state's top Republican leaders: then-Speaker Rod Jetton, then-Gov. Matt Blunt and current Lt. Gov. Peter Kinder, a longtime champion of the idea.

Under Dieckhaus' plan, those who give to the scholarship fund would have 60 percent of their donation reimbursed through a state tax credit. Up to $40 million a year could go toward the tax credits.

A fiscal note prepared by the Legislature's staff estimates that half the students in public unaccredited districts would transfer to private schools, so the state would save as much as $69 million a year that it now pays those local school districts.

The Missouri Association of School Business Officials disputes that analysis. In a letter to legislators last month, the financial experts said there would be no savings because any state aid not sent to the unaccredited districts would be absorbed by other districts, given that the formula is currently underfunded.

The bottom line, the business officials said, is a loss of $40 million in potential tax revenue that would instead go to private school scholarships. Meanwhile, those scholarships would be inadequate to pay steep tuition bills for low-income children, so the money would largely wind up with families who already send their children to private or parochial schools, the group said.

Dieckhaus said the business officials flunked math.

For example, they forgot to factor in private donations that the tax credits would leverage — at full strength the scholarship pool would total $66 million rather than $40 million.

"We're having to spend a lot of time educating (Republican) caucus members and debunking things," Dieckhaus said.

He also must persuade colleagues that the state can legally subsidize students at religious schools, even though Missouri's Constitution bans using public money to aid "any sect, church, creed or denomination of religion."

Dieckhaus' argument revolves around the fact that tax credits provide a direct, dollar-for-dollar reduction in taxes owed, meaning the money is never sent to the state treasury.

"Tax credits are not public money" he contends. "It's not public money unless the state gets it."

His interpretation is grounded in a legal opinion by Clayton attorney Mark Mittleman, who said such scholarship programs have been upheld in other states against objections under constitutional provisions similar to Missouri's.

But that argument is unlikely to brush away concerns that the program would grow, as have subsidies that go to developers who rehab historic buildings and build affordable housing.

"Almost all the tax credits somehow balloon out of proportion," said one of the bill's opponents, Rep. Mike Thomson, R-Maryville. "How do you stop that?"


There are political heavyweights on both sides of the issue.

The state's most prominent school choice advocate is retired financier Rex Sinquefield of St. Louis. He has sunk hundreds of thousands of dollars into the coffers of politicians such as House Speaker Steve Tilley, R-Perryville. Tilley has said from the session's outset that the education issues should be linked together.

The think tank Sinquefield co-founded, the Show-Me Institute, has advocated for several concepts in the bill, such as the elimination of teacher tenure.

Even so, Sinquefield's lobbyist, Travis Brown, said last week that he wasn't working on the education bill. He said legislators are well-aware of the consequence of not passing it: Some school districts could lose millions of dollars because of the formula's intricacies.

"There's the cliff," Brown said, using Capitol parlance for the upcoming shift of money.

While Sinquefield may be keeping a low profile, the Missouri Catholic Conference is urging the bill’s approval, saying the scholarships would help more children get a quality education in parochial schools.

Other groups, such as the Missouri Chamber of Commerce and Industry, and StudentsFirst, a national school choice advocacy group, have urged approval of some of the bill’s provisions, such as eliminating tenure for future teachers. However, StudentsFirst spokesman Mike Phillips said the organization does not support the bill in its current form because the scholarships would not be limited to low-income children.

Opposition to the bill is led by well-organized groups representing school administrators and teachers. Some of their members bombarded legislators with emails last week, attacking the elimination of tenure for future teachers.

Some of the bill's opponents said they've talked to Republicans who fear the leadership will take away their chairmanships, sideline their bills or even sabotage their election campaigns if they don't support the bill.

Dieckhaus dismisses such ideas. Though he doubles as the head of the House Republican Campaign Committee, which raises money for Republican candidates running for the House, he said he would not use his power over campaign funds to pressure colleagues.

As negotiations continue, some legislators said they'll wait to see the final product.

"There's so much lipstick smeared on this pig, it's hard to tell what it looks like," said Rep. Mike Lair, R-Chillicothe.

The bill is HB1740

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