Published Online: February 23, 2009

Mo. Schools May Not Get All Federal Stimulus Money

The federal economic stimulus package includes more than $1.3 billion for Missouri schools. But the actual amount of new money making its way to classrooms could be considerably less.

That's because Missouri officials are eyeing the education stimulus money as a way to help balance other parts of the state budget.

For example, about $920 million of Missouri's share can be used to offset cuts to education.

But Missouri so far has not cut its school funding. In fact, Gov. Jay Nixon has recommended a funding increase for next year, even without using the federal money.

So Missouri officials are looking at whether they can use the federal money rather than some of the state funds they had proposed to spend on schools next year. That could free up the state money to be spent elsewhere.

As Senate Appropriations Committee Chairman Gary Nodler describes it, the federal education money "creates one of the largest displacement opportunities" for Missouri's budget under the stimulus package.

But it's also among the most uncertain areas. State and local school officials still are waiting to see what strings might be attached to the money by the U.S. Department of Education.

"My message to school boards and administrators is to proceed with caution," said Independence Superintendent Jim Hinson, one of the speakers last week at a state gathering of school officials.

The Independence School District, for example, has identified more than $40 million of potential renovations to six school buildings it recently obtained from the neighboring Kansas City School District. The list includes roof repairs, new heating and air conditioning systems, improved parking lots and motion detectors for lights. But the district is not committing to the construction contracts.

"As of right now, we don't see any way for that to occur, unless the state determines it's going to provide funds for that to happen with the (federal) stabilization money," Hinson said.

Ideally, Republican legislative leaders would like to use the federal money for one-time projects similar to what the Independence School District desires to do.

But the largest chunk of the federal education money — an estimated $753 million for Missouri — is intended to be distributed through the state's existing funding formula for K-12 schools and to maintain existing funding levels for higher education institutions.

The federal money comes with an assumption that state budget difficulties otherwise would force funding cuts to schools, resulting in teacher layoffs or curriculum cutbacks. It is supposed to ensure states can pay schools the full amount they are due.

That "leaves Missouri in a very strange position, because we really were going to be at that level anyway," said Linda Luebbering, the governor's budget director.

Missouri's budget shortfall is not as pronounced as in many states. When he presented his budget in January, Nixon proposed to increase basic school aid to more than $3 billion — the full amount called for under Missouri's funding formula.

It may be possible to use the federal education money to cover part of the schools' already proposed funding, confirmed Paul Wilson, the governor's senior counsel for budget and finance.

Other parts of the federal stimulus law direct money for particular purposes with the intent of increasing the actual amount of money going to schools. Missouri, for example, could get about $10 million to keep school computers and technology up to date. And it could get $227 million of additional money for special education grants to K-12 schools.

Special education money often is used to pay staff. But that raises other concerns among some state officials, because the federal money is available only through 2011.

"What could go wrong is if we were to flow the money through to districts — however many hundreds of millions of dollars that is — and the districts turn around and hire staff. Two years from now, how do you (pay for) the staff?" said House Budget Committee Chairman Allen Icet.

Such questions apparently do not have answers yet.

The state Department of Elementary and Secondary Education has not given Missouri's 524 public school districts any information or directives about the federal stimulus money, said spokesman Jim Morris.

"We're trying to get clarity about how much money, when we'll see it and what restrictions may exist on it," he said.

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