COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2966-23
BILL NO. Truly Agreed To And Finally Passed CCS For HS For HCS For SS For SCS For SB 781
SUBJECT: Elementary and Secondary Education: Desegregation
TYPE: Original
DATE: June 1, 1998
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| General Revenue | ($5,928,985 TO $6,812,312) | ($168,703,577 TO $169,675,237) | ($167,350,841 TO $168,419,667) |
| Video Instructional Development and Educational Opportunity | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds* |
($5,928,985 TO $6,812,312) | ($168,703,577 TO $169,675,237) | ($167,350,841 TO $168,419,667) |
*Excludes unknown loss for income tax credit for mentoring program, unknown costs for research based reform program grants, and unknown costs for charter schools.
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Local Government** | $5,830,714 TO $29,330,714 | $167,244,024 TO $190,744,024 | $167,244,024 TO $190,744,024 |
**Excludes unknown income for research based reform program grants, unknown savings for transportation costs and unknown costs for grants, charter schools, transportation and building costs and accountability council.
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 18 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Elementary and Secondary Education (DESE) assume the following:
1) A Supervisor FTE would be needed to manage the Research Based Reform Program consisting of grant awards made to the schools. The number of grants is unknown; therefore, additional FTE could be needed to provide sufficient technical assistance as required.
2) Changing the formula and running the desegregation savings through the formula plus the increase of the operating levy would increase the annual cost to fully fund the foundation formula by $128,828,121.
3) The Commissioner of Education could cause an audit examination to be performed of the enrollment and average daily attendance records of any school district. The actual and necessary costs of the audit would be paid by DESE. Based on conversations with a few auditing organizations, a reasonable figure for auditing the number of students attending a school district on a particular day is $1.00 per pupil. This number would probably be low for districts with several buildings as the number of "counters" would have to increase to be sure all students were counted within a short fixed period of time.
Total enrollment for the State of Missouri for the 1996-97 school year is 883,327 in 525 school districts. The Oversight Division has ranged the cost from zero to $883,327 the first year and increased the cost 10% annually (based on DESE's projection of enrollment increases) because audits would be contracted at the discretion of the Commissioner of Education.
The number of students enrolled is a figure that receives attention in the annual auditing procedures of each school district. Because the date an audit is done of the number of students in a school district would not relate to any required reporting date, the data may or may not be useful in determining the accuracy of district data. For example, Free Textbook funds received by school district are based on membership, not on a head count, for the month of September, and eligible pupil count is done year round based on average daily attendance of the regular year and summer school doubled.
4) The cost for the change to Section 162.935.3 concerning special school districts would be $1,799,000.
5) Section 163.031.5 (2) increases the distributions to certain hold harmless districts by $4 million annually.
6) Section 163.161.3 concerning the exemption for handicapped children from the penalty of transportation moneys due to inefficiency would have additional costs of at least $4,031,714. This is based on 1996-97 school year data that is being reimbursed in 1997-98 school year. The maximum district cost factor without penalty is $104. The penalty is assessed on those districts that exceed $104 as the district cost factor. However, the maximum penalty factor is $134, therefore, the maximum penalty is $30 ($134-$104). The amount is capped at 75% of cost. Due to appropriation limitations, the actual percentage paid in FY 98 was actually 61.289%. The total amount for the 1996-97 data equals $3,990,216. There is an inflation factor of 4% per year which brings the total needed for 1998-99 to $4,031,714. There will probably be a greater need since there is currently no distinction for transportation of handicapped students, some school districts do not report handicapped children separately at this time. The following formula is used to determine the increase in cost:
District cost factor - penalty factor of $104 (maximum $30) / 100 to get percentage * district handicap cost x 75% cap. Example: district cost factor is $153.54, handicapped cost is $94,833.60. Added cost would be
(($134-$104)/100 * $94,833.60)*.75 = $21,337.56
7) DESE officials assume in order to efficiently track the sponsorship and mentoring program, nine designated areas would be established with 2 FTE per area (1 supervisor and 1 program specialist I) to maintain records and contact with the local school districts.
2 FTE (1 director and 1 program specialist II) would be needed to coordinate the program at the state level to insure that information is disseminated effectively.
DESE included a total of 20 FTE in the fiscal impact for the sponsorship and mentoring program. The Oversight Division assumes DESE could accomplish the provisions of the proposal with one FTE Supervisor ($34,044) in the central office to coordinate the program with school districts.
8) Officials from the DESE assume the proposal would result in the following fiscal impact for sheltered workshops:
FY 99 5,400 FTE x 251 days x ($12-$9) = $4,066,200 additional funds *
FY 00 5,400 FTE x 251 days x ($13-$9) = $5,421,600 additional funds
*DESE states they currently pay $9 per day per worker.
The Oversight Division has only included the increase reflected in the proposal from twelve dollars to thirteen dollars per day for FY 2000. Therefore, the fiscal impact was calculated as follows:
FY 00 5,400 FTE x 251 days x ($13-$12) = $1,355,400
9) DESE officials assume the St. Louis City School District could have increased transportation and building costs resulting from the St. Louis Student's Bill of Rights. The Oversight Division assumes the proposal could result in savings in transportation costs for students attending school closest to home, increased transportation costs of children to relieve overcrowding and increased building and administrative costs for a K-8 system of grade schools and schools for gifted children. Therefore, Oversight has included the savings and costs in the fiscal impact section for local government for the St. Louis School District.
10) DESE officials assume that given FY 98 data, school districts could qualify for an increase in state aid through the foundation formula resulting from the change in definition of "operating levy for school purposes" which would result in additional costs of $3,585,189.
11) DESE officials assume there could be additional costs for a school accountability council at the school district level.
Officials from the Attorney General's Office (AGO) assume the costs of the proposal could be absorbed with existing resources.
Officials from the House of Representatives assume the proposal would result in no fiscal impact to them.
Officials from the Senate assume the proposal would cost less than $5,000, but no additional appropriations would be required.
Officials from the State Tax Commission (TAX) and Department of Labor and Industrial Relations assume the proposal would result in no fiscal impact to them.
Officials from the City of St. Louis assume the provision relating to tax abatements would result in no fiscal impact since it pertains to new potential revenue they currently do not receive.
Officials of the Department of Revenue (DOR) state this legislation allows an income tax credit
for taxpayers sponsoring and mentoring programs for at-risk students. This tax credit would be monitored and certified by DESE, pursuant to section 135.348.6.
The number of taxpayers eligible for this tax credit is unknown. For every 3,680 credits received, one Tax Processing Technician I would be requested to pre-edit and verify the credit. For every 20,000 errors generated from this credit in MINITS and every 12,000 errors generated in COINS, one Tax Processing Technician would be needed. The modifications to the income and corporate tax systems and to the forms and reports would be completed by the Information Systems Division with existing staff and resources.
Officials from the Office of Administration - Budget and Planning assume for the City of St. Louis for 1997 local sales tax collections were $78.5 million with a sales tax rate of .02625 and taxable sales of $2,990.5 million. Therefore, to generate $23.5 million, a tax rate of .0078 would be required. St. Louis sales tax collection growth has been erratic in recent years. Therefore, no assumption was made regarding growth or decline in the rate.
Based on information from the State Tax Commission Annual Report - 1997, the total assessed valuation for St. Louis City was $2,759,999,398. Applying an 85 cent levy would produce additional property tax income of approximately $23.5 million. Because the levy or sales tax
could be voted in to produce the additional income, the Oversight Division has included a range of income to school districts of $0 to $23.5 million annually in the fiscal impact section for local government.
Officials from the Joint Committee on Public Employee Retirement assume the legislation would not affect retirement plan benefits as defined in section 105.660 (5).
Officials from the Public School Retirement System assume the proposal would not appear to create a "substantial proposed change" as that term is defined in section 105.660, RSMo.
Officials from the Public School Retirement System of St. Louis assume the proposal would result in no material impact that is measurable.
The proposal would result in a decrease in Total State Revenues.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (10 Mo.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GENERAL REVENUE FUND | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss-General Revenue Fund | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additional Income Tax Credit for Mentoring Program for At-Risk Students | (UNKNOWN) | (UNKNOWN) | (UNKNOWN)
| Cost-Department of Elementary and
Secondary Education (DESE)
| Personal Service (2 FTE)
| ($58,147)
| ($71,534)
| ($73,323)
| Fringe Benefits
| (16,299)
| (20,050)
| (20,552)
| Expense and Equipment
| (23,825)
| (12,569)
| (12,942)
| Foundation Formula
| 0
| (128,828,121)
| (128,828,121)
| Foundation Formula
| 0
| (3,585,189)
| (3,585,189)
| Special School Districts
| (1,799,000)
| (1,799,000)
| (1,799,000)
| Hold Harmless Districts
| 0
| (4,000,000)
| (4,000,000)
| Handicapped Transportation
| (4,031,714)
| (4,031,714)
| (4,031,714)
| Transfer Corporation
| 0
| (25,000,000)
| (25,000,000)
| Research Based Reform Program Grants
| (UNKNOWN)
| (UNKNOWN)
| (UNKNOWN)
| Sheltered Workshops
| 0
| (1,355,400)
| 0
| Enrollment and Attendance Audits
| (0 to 883,327)
| (0 to 971,660)
| (0 to 1,068,826)
| Total Cost-DESE**
| ($5,928,985 to $6,812,312)
| ($168,703,577 to $169,675,237)
| ($167,350,841 to $168,419,667)
| Cost-Colleges and Universities
Charter Schools
| (UNKNOWN)
| (UNKNOWN) | (UNKNOWN)
| ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND*
| ($5,928,985 to $6,812,312)
| ($168,703,577 to $169,675,237)
| ($167,350,841 to $168,419,667)
| *Excludes unknown loss for income tax credit for mentoring program, unknown costs for research based reform
program grants, and unknown costs for charter schools.
| **Excludes unknown cost for research based reform program grants.
| A portion of the desegregation savings would be redirected for distribution to school districts for programs as
specified in the proposal. This would result in a redistribution of funding to the schools.
| VIDEO INSTRUCTIONAL DEVELOPMENT
AND EDUCATIONAL OPPORTUNITY FUND
| Income-VIDEO Fund
| VIDEO Sales Tax
| $1,250,000
| $2,500,000
| $2,500,000
| Cost-VIDEO Fund
| VIDEO Programs and Administration
| ($1,250,000)
| ($2,500,000)
| ($2,500,000)
| ESTIMATED NET EFFECT ON
| VIDEO FUND
| $0
| $0
| $0
| FISCAL IMPACT - Local Government (10 Mo.)
| FY 1999
| FY 2000
| FY 2001
| Cost-Community Colleges
| Charter Schools
| (UNKNOWN)
| (UNKNOWN)
| (UNKNOWN)
| SCHOOL DISTRICTS
| Income-School Districts
| Operating Levy of Transitional School
District or Sales Tax
| $0 to $23,500,000
| $0 to $23,500,000
| $0 to $23,500,000
| Research Based Reform Program Grants
| UNKNOWN
| UNKNOWN
| UNKNOWN
| Transfer Corporation
| 0
| 25,000,000
| 25,000,000
| Foundation Formula
| 0
| 128,828,121
| 128,828,121
| Foundation Formula
| 0
| 3,585,189
| 3,585,189
| Special School Districts
| 1,799,000
| 1,799,000
| 1,799,000
| Hold Harmless Districts
| 0
| 4,000,000
| 4,000,000
| Handicapped Transportation
| 4,031,714
| 4,031,714
| 4,031,714
| Total Income-School Districts*
| $5,830,714 to $29,330,714
| $167,244,024 to $190,744,024
| $167,244,024 to $190,744,024
| *Excludes unknown income for research based reform program grants.
| Savings-St. Louis School District
| Transportation Costs
| UNKNOWN
| UNKNOWN
| UNKNOWN
| Cost-School Districts
| Research Based Reform Program Grants
Match, Charter Schools, Transportation
and Building Costs, Accountability Council
| (UNKNOWN)
| (UNKNOWN)
| (UNKNOWN)
| ESTIMATED NET EFFECT ON
SCHOOL DISTRICTS**
| $5,830,714 to $29,330,714
| $167,244,024 to $190,744,024
| $167,244,024 to $190,744,024
| |
**Excludes unknown income for research based reform program grants, unknown savings for transportation costs
and unknown costs for grants, charter schools, transportation and building costs and accountability council.
No operating levy or increase in the operating levy would be established for a transitional school district unless prior
approval would be obtained from a simple majority of the district's voters. A portion of the desegregation savings would be redirected for distribution to school districts for programs as
specified in the proposal. This would result in a redistribution of funding to the schools. FISCAL IMPACT - Small Business Small businesses could be fiscally impacted to the extent they sponsor at-risk students or mentoring programs and qualify
for income tax credits. Certified Public Accounting firms could be contracted to perform audits of school districts'
enrollment and attendance. Small businesses in the City of St. Louis could be required to pay additional property taxes or
sales taxes. Small businesses could be fiscally impacted to the extent they operate as sheltered workshops and receive increased funds
for workers. DESCRIPTION This proposal would establish an income tax credit of up to two thousand dollars for expenses paid by a qualified taxpayer
for the participation of a student in a sponsorship and mentoring program established by a school district and approved by
the Department of Elementary and Secondary Education. The tax credit would be allowed for taxable years commencing on
or after January 1, 1998, and the credit allowed would not exceed two thousand dollars per eligible student. The tax credit
would be claimed at the time such taxpayer files a return and would be applied against the income tax liability after all other
credits have been applied. Where the amount of the credit would exceed the tax liability, the difference between the credit
and the tax liability would not be refundable but could be carried forward to any of the taxpayer's four subsequent taxable
years. A credit would only be allowed for a student who participates in the program for at least eight months during the tax
year for which the credit would be claimed. The Department would establish guidelines and criteria for approval of
sponsorship and mentoring programs and for determining the eligibility of students which would be based upon a definition
of an at-risk student as established by the Department. A school board could establish a sponsorship and mentoring program
and apply to the Department for approval of the program. The school board would annually certify, to the Department, the
number of eligible students participating in the program. A school principal could recommend for participation, to the school board, students who do not meet the definition of "at-risk" students, and the school board could submit the names of
the students and the circumstances which justify their participation to the Department for approval. The Department of
Elementary and Secondary Education would provide written notification to the Department of Revenue of each eligible student participating in an approved program, the student's school district, the name of the qualified taxpayer approved to receive a tax credit and
the amount of the credit. The management team appointed by the State Board could report recommendations requiring the district develop a plan for
the recruitment and retention of high quality teachers and administrators within the district or appoint a school
accountability council to monitor one or more school buildings in the district. A district board of education could appoint a school accountability council for one or more buildings within the district.
The school accountability council could monitor implementation of an instructional resource allocation plan within the
areas of deficiency identified by the State Board of Education. The council would consist of 7 members, with no fewer than
4 members being the parent or guardian of a student currently enrolled in the school building. An instructional resource allocation plan for any school building would provide for the focusing of any discretionary local,
state or federal funds available to the school on the areas of academic deficiency. The instructional resource reallocation
plan would address instruction in math and reading, professional development, special education and related services and
any waivers for implementation of the plan to be requested on behalf of the district from the State Board of Education. The
school accountability council would report to the State Board of Education. Any district with one or more buildings declared academically deficient would provide summer school programming for
areas of concern identified by the school audit team. Subject to appropriation, the State Board of Education could establish a program of financial aid for prospective teachers to
assist schools identified as academically deficient. In any school district whose graduation rate would be below 65%, school district boards would be required to determine
which schools would be academically deficient. The school board would have the authority to suspend or terminate contracts of certificated staff, the principal and any administrators and reconstitute the school with new teachers and administrative staff. The school district would
develop a program of incentives and rewards for teachers who contribute to preventing schools from becoming
academically deficient or remove schools. The plan of the district would be subject to approval by the Commissioner of Education and could include bonuses, opportunities for staff
development and the granting of status as master teachers. The proposal would establish the Research-based Reform Program to be administered by the Commissioner of Education.
The program would consist of grant awards to public schools demonstrating a commitment to undertake whole-school
reforms that research has shown has been effective in improving student performance and sustaining measurable
improvement after implementation. Grants would require a matching contribution from school districts and would run for up to three years.
The State Board of Education would promulgate rules, including a list of research-based reform programs. The list would
be coordinated with the federal Comprehensive School Reform Initiative. Added priority would be given to academically
deficient schools for the grant program. The proposal changes how certain districts calculate their assessed valuation. Beginning December 15, 1999, and annually, the State Board of Education would report to the General Assembly on the
retention and recruitment of teachers in state's schools. The report would include specified information. The public hearing held to receive information from the voters of the school district that has lapsed would review any plan
by the district to return to accredited status and any technical assistance to be provided to the district. The State Board of Education could appoint a special administrative board to supervise the financial operations, maintain
and preserve the financial assets or continue operation of the educational programs within the lapsed district. The special
administrative board would consist of two persons who are residents of the school district, who would serve without
compensation, and a professional administrator who would chair the board and be compensated in whole or in part with
funds from the district. The authority of the board would expire at the end of the third full school year following its appointment, unless extended
by the State Board of Education for one additional year. The proposal would establish in the metropolitan school district a pilot program of multi-year teacher-student groupings.
The program would be implemented in no fewer than ten schools and for no less than five years. The proposal would calculate state aid for the Special School District of Pemiscot County for the combined levy of the
component district and the special school district and divided based on the pro rata share of the total operating levy
belonging to the school district and the special school district, respectively. The district's number of eligible pupils would
reflect the average daily attendance of all pupils resident in the district and educated by the district or the special school district, or both. The
distribution would not decrease any district's allocation of formula money per eligible pupil below that which the district
received for the 1992-93 school year. The proposal would establish a school district within each city not within a county a school district to be known as the
Transitional School District of the City, which would be a body corporate and politic and a subdivision of the state. The governing board of the transitional school district would consist of three residents of the school district: one appointed
by the governing body, one appointed by the mayor of the City of St. Louis, and one appointed by the board of aldermen of
the City of St. Louis. The members would serve without compensation for a term of three years. A final judgment in a school desegregation case could authorize the governing body of a transitional school district to
establish the transitional district's operating levy for school purposes at a level not to exceed 85 cents per one hundred
dollars assessed valuation in the district or a sales tax equivalent amount as determined by DESE which could be
substituted in whole or in part of such property tax. Any certificate of abatement issued after the effective date of the act
would not be applicable to the transitional school district. The transitional district would not be subject to any requirements
to maintain a minimum value of operating levy. No operating levy or increase in the operating levy or sales tax would be established for a transitional school district unless
prior approval is obtained from a simple majority of the district's voters. The board of the transitional school district would
place the matter before the voters prior to March 15, 1999. The St. Louis Transitional School District would be dissolved on July 1, 2008, unless the state board determines it is
necessary to continue it. The proposal would change the transportation approval by the State Board of Education. No district would receive reduced reimbursement for costs of transportation of handicapped and severely handicapped
children based upon inefficiency. A school district could exclude transportation expenditures from the current operating cost calculation of the base year and
the year or years for which the compliance percentage is calculated for tuition, retirement and compensation of certificated staff. The Commissioner of Education could cause an audit of enrollment and average daily attendance records of any school
district. A physical count of students would be part of the audit. An independent auditor would perform the audit and make
a written report of the findings to the Commissioner of Education and the district school board. The actual and necessary
costs of the audit would be paid by the Department. The Children At-Risk in Education Program funding could be used for paying for building site operating costs in the
proportion that the free and reduced price meal eligible student count is to the total enrollment in that building. If the total amount of desegregation funding appropriated for fiscal year 2000 or any subsequent fiscal year is less than the
amount appropriated for the same purpose in fiscal year 1999, any amount of the difference, in addition to any unexpended
appropriation for the prior fiscal year that results in additional unobligated resources for the state beginning in fiscal year
2000 would be distributed as follows (in order of priority): (1)Up to the first $75 million dollars, or such lesser sufficient amount to fully fund district entitlements with a proration
factor no less than one, of such funds would be transferred to the State School Moneys Fund and distributed according to
section 163.031, RSMo; (2)Beginning in FY 2000, the next $25 million or such lesser amount determined optional by appropriation to be sufficient,
or the remaining funds would be transferred to fully fund increases in appropriations for transportation categorical aid and
any remainder of such $25 million would be transferred to fund other categorical state aid pursuant to section 163.031,
RSMo; (3)The next $25 million, or such amount sufficient to fully fund district entitlements with a proration factor no less than
one, would be transferred to the State School Moneys Fund and distributed in accordance with section 163.031, RSMo; (4)Any remaining funds would be transferred to fully fund categorical state aid for transportation, vocational education,
special education, gifted education, remedial reading and implementation costs of assessments. The rights and duties of a teacher who was formerly a principal would be the same as any other teacher with the same level
of qualifications and time of service. If the responsibilities of the St. Louis Special School District would be transferred or removed to one or more separate
school districts, the latter school district would become the receiving or successor school district. The proposal would change the effective date from July 1, 2000 to July 1, 1999 for the increase in sheltered workshops
payments from twelve dollars to thirteen dollars per day for each handicapped worker. Sales tax revenues deposited in the Video Instructional Development and Educational Opportunity Fund would not be
deposited in the General Revenue beginning January 1, 1999. The Public School Retirement Systems of the Kansas City School District and St. Louis City School District and the Public
School Retirement System would jointly undertake a feasibility study to include certain issues. The study would be
presented no later than November 1, 1999. Beginning with the 1997-1998 payment year, the calculation of the magnitude of a tax rate decrease due to reassessment
would exclude any voted increase occurring in the year of reassessment dating from tax year 1995. Charter schools could be operated only in a metropolitan or urban school district and could be sponsored by the district's
school board, a public four-year college or university, or a community college. A charter school could affiliate with a four-year college or university or a community college. The proposal would create the St. Louis Students' Bill of Rights. The rights would include kindergarten through eighth
grade system of grade schools, children attending school closest to home, transferring to any other school within the district,
transporting children to relieve overcrowding, and schools for gifted children. The St. Louis Bill of Rights would have to be approved by the voters of the City of St. Louis. For determining average daily attendance, summer school attendance would apply to the school year following the summer
school term. There would be no content-based censorship of American history or heritage based on religious references in the writing,
document and records specified in the proposal. Certain provisions of the proposal, section 162.1060 - Metropolitan Schools Achieving Value in Transfer Corporation and
sections 163.011 and 163.031 - Foundation Formula, would become effective on July 1, 1999. The proposal would establish a Metropolitan Schools Achieving Value in Transfer Corporation, which would be a public
body corporate, for implementing an urban voluntary school transfer program within a program area including a city not
within a county and any school district located in whole or in part in a county with a population in excess of 900,000
persons. The board would make provision for transportation of all the students and for payment to school districts for the
education of such students. Each district, other than a metropolitan school district, participating in an urban voluntary school transfer program would
place before the voters in the district a proposal to continue participation in the urban voluntary transfer program at the
April election during the sixth year of operation of the program. Unless a majority of district voters vote to continue
participation in the program, each district, other than a metropolitan school district, would file a plan, no later than the end
of the seventh year of the operation of the program, for phase-out of the district's participation in the program. The plan
would be provided to the State Board of Education, the transitional school district and the board of directors of the
corporation. Each plan would provide for elimination of transfers to the district according to a prescribed schedule. Each student participating in the program would be considered an eligible pupil of the district of residence for the purpose
of distributing state aid, except that students attending school in a metropolitan school district would be considered eligible
pupils of the district attended. DESE would determine the increased state aid eligibility created by including pupils
attending school in the program as eligible pupils of the district of residence and distribute the full amount of such state aid
to the Metropolitan Schools Achieving Value in Transfer Corporation and would not distribute state aid on the basis of such
pupils to the district of residence. For each student participating in the program, the corporation would receive the total of all state and federal aid that would
otherwise be paid to the student's district of residence. The corporation would pay a school district that receives a nonresident student from the funds of the corporation in accordance
with the proposal and agreements between the corporation and the participating school districts. In each of the first two fiscal years, the corporation would also receive a payment of $25 million. For the third year and
thereafter, the corporation would receive transportation state aid, for each student that participates in the program, which
would be the same amount and on the same basis as would be received by the student's district of residence provided that
such reimbursement would not exceed 155% of the statewide average per pupil cost for transportation for the 1997-98
school year. Funds received by the corporation could be used for any purpose and need not be expended in the year
received. The corporation would have all the powers of a public body corporate, except that it would have no paid employees. The
corporation, by contract with any public entity, school district, or private entity, could retain the services of a fiscal agent,
make provisions for accounting, transportation management, or other assistance that the corporation could need to carry out
its functions. Money generated under other federal or state categorical aid programs would be directed to the school
districts serving the students eligible for the aid. The board of directors could establish regional attendance zones. No later than four years following the date an urban public school choice program would begin the Senate and House of
Representatives would establish a Joint Committee on Urban Voluntary School Transfer Programs. No later than five years
following the date an urban voluntary school transfer program is begun, the committee would review and monitor the status
of any urban voluntary school transfer program and make recommendations to the General Assembly. The members would
receive no additional compensation, other than reimbursement for actual and necessary expenses. No later than nine years following the date an urban public school choice program is begun, the
committee would be reestablished. No later than ten years following the date of the beginning of the program, the
committee would review and monitor the status of the program. The proposal would define "adjusted operating levy", "current operating costs", "district's target rate", "fiscal instructional
ratio of efficiency" and "graduation rate". The definitions of "guaranteed tax base" and "operating levy for school
purposes" would be revised. The proposal would allow, beginning January 1, 1998 for the 1998-99 school year, not more than ten cents of the minimum
tax rate of $2.75 to be counted from the debt service and capital projects funds. The portion of state aid received by a
district based on the tax rate in the debt service or capital projects funds would be placed to the credit of the debt service or
capital projects fund, respectively. Lines 1 and 14 of the foundation formula would be revised. Beginning with the 1997-98 payment year, the calculation of the magnitude of a tax rate decrease due to reassessment
would exclude any voted increase occurring in the year of reassessment dating from tax year 1995. Any action pending of filed which is otherwise authorized by law and claims a tax refund predicated upon an improper tax
rate adopted by a school district must be commenced no later than ninety days after the end of the tax year for which the
rate was imposed, and if not commenced within that time, such action would no longer be maintained and be abated and
dismissed. This legislation is not federally mandated, would not duplicate any other program and would not require additional capital
improvements or rental space. SOURCES OF INFORMATION Department of Elementary and Secondary Education Attorney General's Office House of Representatives Senate State Tax Commission City of St. Louis Department of Revenue Office of Administration - Budget and Planning Joint Committee on Public Employee Retirement Public School Retirement System Public School Retirement System of St. Louis Department of Labor and Industrial Relations Jeanne Jarrett, CPA Director June 1, 1998