SID SALTER: Raiding school district reserves remains poor policy

By Sid Salter

STARKVILLE – On the way out the door, Gov. Haley Barbour revisited a public policy suggestion in his final speech to the Mississippi Legislature as governor that was as flawed this week as it was back in 2004 when he brought it up the first time.
The governor proposed raiding school district reserve funds in the state’s K-12 school districts, a strategy he first utilized back in 2004 during the first of his eight years in office.
The 1997 Mississippi Adequate Education Program was the vehicle that was supposed to have addressed the inequities between affluent school districts like DeSoto County and poor districts like Quitman County. MAEP was supposed to assure an education funding formula that offers each child in Mississippi an equal chance to succeed regardless of the amount of local school funding available.
Left alone, MAEP has in great measure accomplished that goal. But in 2004, legislators and Barbour effectively pushed the state’s school boards around on the education funding playground and took some of their money away, impacting the MAEP concept as a funding equalizer.
The 2004 Legislature pushed a greater share of the burden of funding public education in Mississippi down to local taxpayers by using local district funds to offset state revenue shortfalls – and they did so at the urging of Gov. Barbour.
In 2004, lawmakers shoved the responsibility of paying $30 million in higher teacher health insurance costs and $93 million in state teacher pay raises down to the 152 school districts with less state funding, forcing them to use local reserves to make up the difference.
As he did in 2004, Barbour claimed this week that local school districts maintained huge reserves that should be drawn down. The governor said the state’s 152 school districts had $615 million in reserves. That’s at best a half-truth.
The state’s school districts, which primarily get funded early in the year and then have to live on those funds the rest of the year, indeed had reserve fund balances of $615 million at the end of the last state fiscal year on June 30, 2011. But those funds fluctuate downward as the school districts pay their bills over the rest of year.
The reserves are not only depleted by recurring expenditures, but by unforeseen problems and emergencies. In 2011, killer tornadoes destroyed schools in Smithville in Monroe County and Cumberland in Webster County. Local taxpayers in Monroe and Webster counties and in other venues where schools were damaged needed every dollar to deal with these calamities. Prudent school boards and superintendents build reserves by assuming that those storms, fires, accidents and other eventualities will occur and that funding has to be available to help meet those needs.
In 2004, the Legislature brokered a deal with Barbour to underfund MAEP and force local school districts to spend down reserve funds. Now, after a long and punishing recession, many of the state’s school districts have either already implemented or are facing local tax hikes.
The Legislature is far more conservative now than it was in 2004. But declaring open season on local school district reserve funds, most county officials will tell you is a virtual guarantee of local tax increases. The same recession that has crippled state government resources has impacted local governments as well
Sid Salter is a syndicated columnist. Contact him at (601) 507-8004 or sidsalter@sidsalter.com.