There are two cities in Missouri that have approximately 16,800 students.
The budget to educate those children is $153 million in one district and $259 million in the other. The expenditure per student is $9,343 in one district and $15,640 in the other. (The state average for expenditure per pupil is $9,751.) Finally, the tax levy in the district with the larger budget — Kansas City — is 10 cents less than the district with the smaller budget — Columbia.
Belcher is superintendent of Columbia Public Schools.
This tale highlights some of the inequities in funding between various school districts. I have chosen to compare Columbia to Kansas City because the student population size is nearly identical, yet Columbia Public Schools spends $100 million less per year than Kansas City.
More than 80 percent of students in Kansas City qualify for free and reduced-price lunch, whereas Columbia has only 39 percent. One would expect a higher program cost with such a difference in student demographics. The real story I wish to explore is the nature of how property taxes and the state funding formula create such disparities.
The funding tale is full of drama and intrigue. The story goes like this:
• All property categories are taxed at the same rates in Missouri. Residential property is taxed at 19 percent per $100 of assessed value, commercial property is taxed at 32 percent, and agricultural land is taxed at 12 percent of the assessed value. (This is based on a productivity model, not market value.)
• Public properties such as city, university, cooperative utilities, etc. are not taxed. The combined property value of a community is called the assessed valuation, or AV. Higher property values generate higher tax revenues for the public taxing entities.
Kansas City has tremendous business property value and a large amount of tax revenue for public taxing entities. The assessed valuation in Kansas City is $2.8 billion compared to Columbia’s $2 billion. It also has a higher operational tax rate of $4.95 compared to $4.85 in Columbia.
Additionally, Kansas City’s tax rate for schools has remained unchanged for many years. Other districts are required to reduce the tax levy amount if property values increase over that of inflation.
In Columbia, prior to the recession, the school district would often roll back the levy by 7 to 25 cents each school year. The district has recently been rolling the levy back up as property values have flattened, but is still below the voter-approved tax levy rate set in 2003. In this tale of two cities, property tax requirements also explain some of the huge difference in property revenues.
The tale of state support is also difficult. The state tries to equalize spending through a formula. In theory, schools with lower property values are given a higher percentage of state funding to equalize spending per pupil. Columbia receives 33 percent of its operations budget from the state formula; Kansas City receives about 25 percent.
I am not intending to have a discussion about the efficiency or the academic needs of the two school districts, but the differences in funding are amazing. By the way, St. Louis Public Schools spends more per pupil than Kansas City.
I have heard many legislators state that we are in unprecedented budgetary times. State revenues have dropped tremendously, but the state still has the responsibility to provide equity in funding to some degree. Similarly, all communities have the ability to choose the funding level of their schools. This requires the great democratic process of a public referendum. This does have certain limitations.
I am certainly not advocating that Columbia Public Schools needs another $100 million, but I do salivate with the thought. Columbia Public Schools would require a levy increase of around $5, more than double the current operating levy, to generate this level of funding. This is simply far beyond what could be asked of our community.
State funding has decreased during the past few years, and Columbia Public Schools has reduced more than $17 million from its budget in the same time frame.
Additionally, our current state legislative body has indicated a reluctance to look at revenue options such as raising cigarette and alcohol taxes. At least they should be willing to look at equity in school funding. The inequity in school funding creates financial “winners” and “losers.” This is not fair for students, as they do not determine the cities in which they reside.