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May 14, 2024 |  By: Annelise Hanshaw - Missouri Independent

Missouri education department prepares for ‘mother of all supplemental budgets’

missouri education board

By Annelise Hanshaw - Missouri Independent

The Missouri Department of Elementary and Secondary Education anticipates asking lawmakers for more money later this year in order to meet the demands of a massive new education law and make up for reduced federal funding.

“My gut is… because you have a lot of federal authority deleted… ​​you’ll see the mother of all supplemental budgets, probably in a special session,” State Board of Education Chair Charlie Shields, of St. Joseph, said during Tuesday’s board meeting.

The budget approved by lawmakers for the fiscal year that begins July 1 is more than $1 billion short of the current year’s appropriation, despite a 3.2% bump in pay for the education department’s employees. 

This is before any possible vetoes or budget withholds by Gov. Mike Parson.

Kari Monsees, the department’s commissioner of financial and administrative services, told the board that a “common theme” of the budget was reductions in federal funding. And that impacts the amount of general revenue required next year, he said.

“Is that normal?” Mary Schrag, a board member from West Plains asked. “Is it considered realistic that we’re not going to use all those federal funds moving forward from year to year?”

Some items usually funded by federal money may be part of a supplemental request, Monsees said. He is most worried about the child-care-subsidy program, which encourages child care providers to serve low-income families.

The budget approved by lawmakers last week gives the department almost $260 million for two child care subsidies — a reduction of $23.4 million from current funding. The amount pulled from the state’s general revenue fund is stagnant between the fiscal years, showing a reduction in federal funding.

“We are seeing the case loads increase to the point where we’re going to need some of that capacity moving forward,” Monsees said. “It lowers the overall state budget by reducing some of those federal funds. The question is, is there enough left there?”

House Budget Chair Cody Smith, a Republican from Carthage, told reporters in a press conference last week that the House consolidated federal fund requests based on how much was used in the previous year. According to budget documents, the program has a projected 92% utilization rate in the upcoming fiscal year. .

The budget, which squeaked through hours before the constitutional deadline, doesn’t include provisions of an omnibus education bill recently signed into law by Parson. 

The bill at its core expands the K-12 tax-credit scholarships called MOScholars. But it also includes public-education priorities like a raise to the base teacher pay and scholarships for future educators. House lawmakers, in a floor debate on the legislation, wondered if there would be enough money in the state’s budget in future years to help districts raise teacher salaries and other costly provisions.

Pamela Westbrooks-Hodge, a board member from Pasadena Hills, noted the law’s projected price tag of $468 million when fully implemented.

“Do you feel like this budget adequately incorporates all the mandates that are outlined in this bill?” she asked Monsees. “There is a lot of concern from the educational community that there are a lot of unfunded mandates in this bill.”

A couple items, like expanding the small school grant program and providing lunch to pre-k students, are unfunded, Monsees said. He anticipates requesting the funding in a supplemental budget.

The mandated raise to teachers base pay doesn’t take effect until fiscal year 2026, he said. The state has been offering an opt-in matching grant program to raise teacher pay to $38,000, subject to annual reappropriation. This year, that amount will bump up to $40,000 before the new law forces districts to raise salaries with a grant program that will also require funds annually.

“The requests that you’re gonna see for fiscal year (2026) will be significant,” Monsees told board members. “It was going to be significant anyway, and (the new law) makes it where it will be an even bigger request.”

Shields also foresees budget woes.

“I think you are two to three years out from having a huge challenge,” he said.

Shields and Monsees agreed that they had never seen a budget process like the one that occurred last week, with closed-door negotiations and without a conference committee where lawmakers openly compromise on the budget.