Law & Courts

Missouri Districts Verge on Bankruptcy After Ruling

By Jaclyn Zubrzycki — September 24, 2013 | Corrected: February 21, 2019 7 min read
Third grader Warren Evans works on a reading exercise at Bel-Nor Elementary School in the Normandy, Mo., school district. Some 1,100 students signed up to leave the district, which lacks accreditation.

Corrected: An earlier version of this article misspelled the last names of Jennifer Jellison Holme, a professor of education policy at the University of Texas at Austin, and Marty Hodits, the president of Francis Howell’s school board.

A Missouri law that permits students to transfer out of an unaccredited district—at the home district’s expense—has caused thousands of students to switch schools this fall, raising the specter of bankruptcy for at least two school systems.

Enacted in 1993, the transfer law allows students to move to a new district when their home district loses its accreditation and requires the unaccredited district to shoulder the tuition payments for the transferees. The law had largely been in legal limbo until a state Supreme Court decision in June affirmed that it was both constitutional and feasible.

The ruling sent district and state officials scrambling to prepare school systems to receive students transferring out of the unaccredited Normandy and Riverview Gardens districts, in St. Louis County. Meanwhile, the 17,000-student Kansas City, Mo., district, which is also unaccredited, is petitioning the state school board to regain its accreditation while awaiting a judge’s ruling in a court case involving the same transfer law.

The 20,000-student St. Louis district, which was involved in the initial court challenge to the transfer law, is now provisionally accredited.

The start of school in mid-August was heralded as a success by leaders of receiving and sending districts alike after some 2,000 students switched districts without major incident, despite having just six weeks’ notice. But the ultimate fate of the unaccredited districts, and others in the Show-Me State that could lose their accreditation under a new system to be implemented next year, is still unclear.

Fifth grade students, from left, Diamon Alton, Alea Payne, and Mar'Reonna Little work on a reading assignment at Barack Obama Elementary School in Pine Lawn, Mo., part of the Normandy school district. The suburban St. Louis district is threatened with bankruptcy because of a state law that requires unaccredited districts to pay tuition for students who transfer to public schools in other districts.

Avoiding Bankruptcy

The law does not cap the number of students who can transfer out, and the unaccredited districts are likely to face major fiscal problems if it is not revised, said Chris L. Nicastro, the state’s education commissioner.

“The last thing we want to see is that the districts would go bankrupt,” Ms. Nicastro said. “We’ve got to get through this year.”

The state school board requested $6.8 million from legislators this week to prevent Normandy from going bankrupt. Lawmakers will hear that request in January.

Students from the 4,000-student Normandy and 6,000-student Riverview Gardens districts are now attending schools in nearly 20 nearby systems. Normandy students could attend the 20,000-student Francis Howell district, and Riverview Gardens students, the Kirkwood and Mehlville districts, with district-provided transportation. If parents choose to send their children to other accredited districts, they must provide their own transportation.

R. Stephen Green, the superintendent of the Kansas City district, said his district hopes to avoid having students transfer out. “It has the potential of creating destabilizing factors—the flight of students, financial impacts,” he said.

Normandy, which has an operating budget of $49 million, is slated to pay more than $14 million in tuition to external districts and transportation fees for departing students. Riverview Gardens will owe some $17 million to receiving districts, according to the Cooperating School Districts, a voluntary co-op in St. Louis and surrounding counties that helped coordinate the transfers.

The shadow of bankruptcy is particularly dark in Normandy, which took in students from the Wellston district, an unaccredited district that lost students to the same transfer law, when the state dissolved Wellston in 2007.

Many districts surrounding Normandy are on the cusp of being unaccredited themselves, said Don Senti, the executive director of the Cooperating School Districts. The dissolution of Normandy could set off a “domino effect,” he said: "[State officials] declared Wellston unaccredited, so they combined it with Normandy. Not surprisingly, Normandy failed. Now, if Normandy fails, and they’ll be bankrupt in February, what will they do, attach them to someone else?”

‘Train Wreck Coming’

In setting out guidelines for preparing transfers, the state “assumed some things that aren’t technically in the statutes,” said Susan S. Goldhammer, the senior director of employment and labor relations of the Missouri School Boards Association. For instance, the guidelines assume that receiving districts could use class-size requirements to limit how many students they can receive.

“We’ve seen this train wreck coming,” Ms. Goldhammer said. “Although I think everyone understands that this law needed to be changed, it was used as a pawn in the legislative process to get measures passed, and compromise did not occur.”

Gov. Jay Nixon told the Associated Press that the law was a “tad clunky” and that he wanted to see changes in it.

Still, an amended law is not a given, Commissioner Nicastro said.

St. Louis County is home to some 24 districts, which vary in demographics and academic performance. The student populations in both the unaccredited districts are more than 90 percent African-American, while the receiving districts are largely white.

“If you have a bunch of these little districts, what you wind up having is people divided by race and income. You create these situations like those that are happening in Detroit and St. Louis,” said Jennifer Jellison Holme, a professor of education policy at the University of Texas at Austin.

“You see the demand’s really high when you give kids the option of attending a much better system,” Ms. Holme said, “but you’re leaving the districts behind, with higher concentrations of need and way fewer resources.”

The state’s role in improving the districts has been limited so far, though a law passed this year allows earlier intervention in unaccredited districts. But the education agency is reconsidering how it works with and identifies low-performing districts.

“We’re looking at crafting a bigger plan that’d allow for the state board and [education] department to intervene in a different way [in low-performing districts.] The idea here is to make the districts better—but more importantly, the idea is to serve children well,” Ms. Nicastro said.

The department is working with Cities for Educational Entrepreneurship Trust, or CEE-Trust, a national network of education and governmental organizations.

Meanwhile, in St. Louis County, a group of district and charter leaders has been collaborating on a plan for improving schools, said the Cooperating Districts’ Mr. Senti. One idea that has been floated is replicating the state-run district in Tennessee, which takes over individual schools.

Ty McNichols, the superintendent of Normandy’s schools, said that 1,100 students applied for the transfer program, but only 800 had actually attended a Normandy school last year. He said that many families had moved into Normandy over the summer.

Some 450 of the exiting students now attend schools in Francis Howell, a high-performing, more affluent district in nearby St. Charles County.

Mr. McNichols said that about 160 transferees had come back, and some students who had initially signed up to transfer never left. Official student counts will be taken later this month.

Optimism and Tension

Mr. McNichols, who became superintendent in July, said he was optimistic that the changes he was bringing in would improve the district’s culture and performance. Still, he said, the transfer law could sink the district.

The situation has also stirred tensions in Francis Howell, where more than 1,000 people showed up for a community meeting after it was announced that the district would receive Normandy students, said Marty Hodits, the president of Francis Howell’s school board. Normandy had been rated as the most dangerous district in the state by the St. Louis Post-Dispatch, which Mr. McNichols said shaded perceptions of Normandy students.

“Initially, I was replying to some very ugly emails,” many from parents who feared that their students would not be safe going to school with students from Normandy, said Pam Sloan, Francis Howell’s superintendent. Normandy students were invited to tour schools before school started, she said, and the year is going smoothly so far.

Anita Miller, the president of the Francis Howell Education Association, said teachers and students had welcomed the transferees. Still, she said, the law doesn’t seem like a permanent solution to low-performing schools.

“Yes, I think [the students who transfer in] will get a great education at Francis Howell. But I also believe that if Normandy were properly funded and they were able to put in some of the same safeguards we were able to put in place, that their community schools would be good, too.”

A version of this article appeared in the September 25, 2013 edition of Education Week as Mo. Transfer Law Threatens Districts

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