Lindbergh, Mehlville school districts will not benefit from release of funds
Gov. Bob Holden released $83 million in withholdings last week that will go back to public education, but the Lindbergh and Mehlville school districts won't see a dime of those withholdings.
The federal government has agreed, at the state's request, to reimburse the state for $83 million in social service funds this fiscal year. The payment was not expected until early next fiscal year, according to a press release.
Those funds will be used to cover mandatory Medicaid costs the state was planning to cover through its general revenue budget, according to Holden, allowing him to release $83 million in withholdings to education — $75 million is scheduled to be released to public school districts in December and $8 million will be released to colleges and universities in January.
"While this is good news for school districts throughout the state this year, it in no way solves the basic budgetary challenge we continue to face in 2004 and that we will face in 2005," Holden stated in the release.
However, since both Mehlville and Lindbergh are hold-harmless school districts, none of that money will flow back into their accounts.
"I can tell you exactly how much we'll get to the penny — zero," said Randy Charles, Mehlville's assistant superintendent of finance and the district's chief financial officer.
Charles told the Call that the bulk of withholdings that were made this fiscal year were to schools on the basic foundation formula, noting that those funds have been frozen for 10 years for hold-harmless school districts.
No adjustments were made to the categorical withholdings that affected hold-harmless districts' transportation, gifted and remedial reading programs, when Holden released $75 million back to public school districts last week.
In fiscal year 2002-2003, Charles said Holden initially withheld $300,000 from Mehlville and then when the state's budget still did not balance, Holden withheld an additional $150,000. As a result, Mehlville eliminated and consolidated bus routes.
"It's a good thing for education in general," Charles said. "It's a good thing for neighboring districts, but we're disappointed ... None of that was restored to Mehlville."
Patrick Lanane, assistant superintendent of business services for the Lindbergh School District, is more than disappointed and questions the legality of Holden's recent actions.
"Money was released to districts on the formula, but no money was released in the categorical," Lanane told the Call. "It's almost illegal. It's picking and choosing who and what schools will get the monies that were withheld."
He said he understands that districts on the formula were harmed more, but he said he could argue that hold-harmless districts have been hurt since 1993.
"I'm glad there's some flow back to schools, but shouldn't the withholdings go back out to districts exactly in the same method and manner they were withheld?" he said.
"There were two big areas, the formula and the categorical. Why not, I suppose, restore 5 percent of withholdings to the formula and 5 percent to the categoricals? Why wouldn't you distribute it proportionately to everyone?" he added.
He also said he did not believe that releasing withholdings to districts on the formula is legal from a taxpayer's point of view. Even taxpayers who do not have children in school, he said, expect their tax dollars to come back to their district.
Withholding money from certain school districts, he said, is equivalent to withholding money from certain taxpayers, which is wrong.
"They're releasing those tax dollars to low tax paying areas and those taxpayers are getting much greater benefit — that's a hard concept," he said. "No matter what situation, any money that is held and released, if you don't make it an equitable release, it's a disadvantage to taxpayers."
Holden's recent release of withholdings was great for other school districts, Lanane said, but it is unfortunate those withholdings were not distributed proportionately.