1. Formula Funding For Fiscal Year 2012 and beyond

2. Budget Issues – Good News FY11 Budget includes 2.3% growth in state revenues. As of October 1, year-to-date collections are up 2.6 percent compared to 2010. $189 Million in Federal Jobs money to be run through FY11 supplemental budget process.

3. Budget Issues – Bad News Foundation formula includes $247 million in Federal Stabilization Funds. Gaming revenues that support the formula are about $50 million under budget. Formula requires an additional $233 million to fully fund in FY12 at 86/14. The state’s total general revenue is about $600 million short for FY12.

4. Foundation Formula History FY07 - $2,748,753,809 FY08 - $2,871,673,147 +$122,919,338 FY09 - $2,969,011,969 +$97,338,822 FY10 - $3,004,388,410 +$35,376,441 FY11 - $3,004,388,410 +0

5. New Formula Phase-in SB287 2005-06 2006-07 (FY07)15%85% 2007-08 (FY08) 30%70% 2008-09 (FY09) 44%56% 2009-10 (FY10) 58%42% 2010-11 (FY11) 72%28% 2011-12 (FY12) 86%14% 2012-13 (FY13) 100%0%

6. Formula Cost FY11 (72/28)$3,129,672,170 FY12 (86/14)$3,237,040,673 FY13 (100/0)$3,345,928,000

7. Formula Underfunding With $3 billion funding appropriation FY11 $125,283,7604% reduction FY12$232,652,2637-9% reduction* *FY12 reduction will increase if appropriation is less than $3 billion. FY13$341,539,590?????

8. FY 11 Foundation Formula Funding Scenarios Phase-inApprop.Proration 72%/28%3.004 B96.0% 72%/28% -50 m94.4% 72%/28% -50 m + Fed. Jobs100.4%

9. FY 12 Foundation Formula Funding Scenarios Phase-inApprop.Proration 86%/14%3.004 B92.8% 86%/14% -50 m91.3% 86%/14% -100 m89.7% 86%/14% -200 m86.6% 86%/14% -297 m83.7%

10. In FY13 The Rules Change SB287 includes a provision that comes into play in 2012-13 (FY13) which says, “The state adequacy target may be adjusted to accommodate available appropriations.”

11. FY 13 Foundation Formula Funding Scenarios Phase-inApprop.Proration SAT 100%3.004 B89.1%$5,612 100%-50 m87.5%$5,515 100% -100 m85.9%$5,410 100% -200 m82.7%$5,125 100% -297 m79.6%* *At this point all districts are hold harmless

12. IF $3B is appropriated to fund the foundation formula in FY13. The state adequacy target may be adjusted to accommodate for available appropriations. The adequacy target is estimated to fall from the current $6,131 to about $5,600. About 100 more school districts will become hold harmless. Hold harmless school districts would receive 100% of their hold harmless amount.

13. FY13 School Funding Chaos If get to FY13 and the state adequacy target is adjusted to $5,600 or below, there will be a MASSIVE shift of funds from formula districts to hold harmless districts creating financial chaos among Missouri’s public schools.

14. Is There A Solution? Executive Committee requested a study of possible solutions.

15. Formula Funding Proposal 1. Proposal only works if there is $3 billion appropriated and distributed to schools in FY12 and the amount is increased in FY13 and FY14.

16. Formula Funding Proposal 2. Freeze the funding percentages at 72%/28% for FY12 and FY13. In the following years, increase the percentages by 7% each year on the SB287 formula until the percentage reaches 100% in FY17.

17. Formula Funding Proposal 3. Reduce the reduction for all school districts before the funding percentages on the SB287 formula move higher.

18. Formula Funding Proposal 4. Funding percentages can never go below 72/28. If available appropriations fall below what is needed to fund a 72/28 formula, then all school districts, formula and hold harmless take a percentage reduction.

19. Formula Funding Proposal 5. The future funding percentages are only targets. If the appropriation is insufficient to meet the targeted percentages, the phase-in percentages would be adjusted. If more money is available than needed, the percentages would be increased.

20. Potential Issues Can the state appropriate $3 billion for the formula in FY 12 and additional money in FY13 and FY14? Will all school districts agree to a solution? Who is going to carry the legislation? What amendments will be added during legislative process?

21. Coming together is a beginning. Keeping together is progress. Working together is success. - Henry Ford

22. Questions and Comments?