JEFFERSON CITY—On Monday, Dec. 1, Sen. Joseph Keaveny, D-St. Louis, filed Senate Bill 7, which would end state aid payments to school districts for educating “phantom students.”  Even though the foundation formula is currently underfunded by over $542 million, the state will pay more than $16 million this year alone to educate students no longer enrolled in school.  

Senate Bill 7 would end this practice.

“It just doesn’t make sense for the state to pay $16 million each year to educate imaginary students when the formula is under-funded by over half a billion dollars,” Sen. Keaveny said. “We need to focus on paying for the students that we do have.”

Senate Bill 7 would amend the complicated state funding formula by applying a uniform per-pupil calculation to all districts, regardless of size.  Currently, the “hold harmless” provision of the formula ensures that no district receives less funding, on a per-pupil basis, than the district received during the last year of the old formula, which was almost 10 years ago.  However, the formula contains a special carve out for small school districts, which are also guaranteed to receive no less money in total than they did 10 years ago, regardless of enrollment.

This special calculation for small school districts results in perpetual formula payments for “phantom students.”  Under this arrangement, a district with only one student could theoretically be paid as if it enrolled hundreds. 

“SB 7, above all, is about fairness and being a good steward of the taxpayers’ money,” Keaveny added.