Missouri education department warns lawmakers: formula recalculation leaves $190.6M funding gap
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Summary
Department of Elementary and Secondary Education staff told the House budget committee the FY27 call on Missouri’s school foundation formula exceeds prior funding by about $190.6 million; absent that new‑decision funding the department would lower the state adequacy target (SAT) and effectively prorate payments, reducing per‑student aid paid to many districts.
The Department of Elementary and Secondary Education (DESE) told a House budget committee Tuesday that a recalculation of the state’s school funding formula, combined with program add‑ons and special payments, produced a FY27 funding call roughly $190.6 million higher than the Legislature provided last year.
Deputy Commissioner Kyle Cruz walked members through the three parts of the formula — the original ‘‘engine,’’ statutory modifications added over time and discrete special payments — and said the combination drives the total funding call. Cruz said, "when you look at those numbers, we are coming up $190,600,000 short, thus the NDI," and explained the department's new‑decision item seeks to close that gap and sustain the state adequacy target (SAT) at 7,145.
DESE staff stressed that the state has only a single practical mechanism to reconcile formula call and available dollars: adjusting the SAT that underlies per‑student payments. Department analysts said if the NDI is not funded the SAT would be reduced and the effect would be a form of proration — some program components would still be paid in full (those not tied to the SAT), while most regular state aid would be paid at a lower per‑student rate. Staff told the committee the likely paid SAT without the NDI would be roughly 6,900, not the 7,145 target.
Members pressed staff on which districts would bear the brunt of reduced SAT funding. DESE explained that hold‑harmless districts would generally continue to receive full prior payments while non‑hold‑harmless districts would see proportionate reductions; other formula components (charter local‑effort mechanics and special payments) behave differently and can concentrate impacts on certain recipients. Staff also flagged charter‑related costs that have risen steeply in recent years — a line item DESE said rose from about $66.4 million in FY23 to an estimated $169.0 million in FY25 — increasing pressure on the overall formula.
In related discussion DESE officials described other FY27 NDIs: a transportation NDI (roughly $32 million) intended to maintain statutory reimbursement levels for school bus costs, and targeted NDIs tied to policy proposals such as open enrollment incentives and federal‑grant carrydowns.
What’s at stake: If lawmakers do not appropriate additional funds or otherwise change statute, DESE said it will be forced to reduce the SAT, which would reduce per‑student payments for many districts and likely trigger additional conversation about distributional fairness, charter‑school mechanics, and state/local funding balance.
What’s next: DESE and committee staff agreed to follow up with more granular evidence on the formula components, the statutory citations that drive special payments, and district‑level exposures so lawmakers can evaluate tradeoffs before appropriation decisions.
