MOScout Daily Update: Big SOTS News… Performance Incentives in School Aid - General Revenue into ESA - Warning Shot to SBOE -Childcare Payment Reform and more…

Governor Mike Kehoe’s State of the State Speech was surprisingly full of news…

1 Big Thing: Changing The Education Funding Formula

The big news of the day was foreshadowed by DESE Commissioner Karla Eslinger at the Senate Education hearing in the morning…

Eslinger: We have a foundation formula that we follow that that gives us it was designed to be an equitable opportunity for all kids to have the same kind of support behind them but the thing is 20 years old it's been tweaked many many times, and so it may be something that we need to look at.

Then, Governor Mike Kehoe’s State of the State speech announced that his administration wouldn’t be fully funding the formula – the first time in years.

This year, we are recommending a $200 million increase for the Foundation Formula, the largest increase since the current Formula was created… [but] You’re going to hear it in the media, so you’ll hear it from me first… we are not fully funding the Foundation Formula.

Kehoe wants the formula to incorporate performance incentives…

Throwing more money at the problem is not the solution. We have invested over $4 billion in K-

12 education and we still aren’t seeing acceptable results across the state. The Foundation Formula in its current form has gotten out of control…

We must find a solution that does a better job of incentivizing performance and managing unrealistic annual adjustments.

What’s next…

Kehoe published an executive order establishing a School Funding Modernization Task Force.

It’ll be about a dozen folks on the task force.
The Task Force shall consist of the following members:

·       Two senators from the Missouri Senate, appointed by the President Pro Tem of the Senate;

·       Two representatives from the Missouri House of Representatives, appointed by the Speaker of the House;

·       A member of the State Board of Education, appointed by the State Board of Education;

·       A superintendent from a large urban school district in Missouri, appointed by the Governor;

·       A superintendent from a small rural school district in Missouri, appointed by the Governor;

·       A teacher from a school in Missouri, appointed by the Governor;

·       A representative of charter schools in Missouri, appointed by the Governor;

·       A representative from a non-profit organization that works on expanding school choice in Missouri, appointed by the Governor;

·       A representative of the business community, appointed by the Governor;

·       A representative of the agriculture industry, appointed by the Governor; and

·       Other members as appointed by the Governor.

What Kehoe wants in the new formula…

Recommended changes to the funding formula shall ensure:

·       Equality of opportunity for all students, regardless of geographic location, socioeconomic status, or other factors that cause disparate opportunities;

·       Sustainability, based on realistic state and local revenue forecasts, including bounds for realistic changes in funding on an annual basis;

·       Incentives are based on performance of schools and educational outcomes; and

·       Adequate funding to sustain school operations and address reasonable educational costs.

BUT ALSO… Such recommendation should also minimize, as much as possible, significant negative impacts to individual school districts.

When…

The Task Force shall submit a final report to the Governor by December 1, 2026, detailing recommendations for potential state funding models for K-12 public and charter schools.

State Funding of Private Tuition

Kehoe followed through with his campaign pledge to support school choice.  He gave a shout-out to Rep. Brad Pollitt’s open enrollment bill (having a hearing today in the House), but the big news was the infusion of general revenue into the Education Saving Account Programs.

We’ve also included $50 million in general revenue funding to bolster the ESA program. By adding state funding to the tax credit program we will be able to serve substantially more

children than the program has in the past year.

·       Only $18 million had come in through tax credit program, so this would immediately triple the program.  Using direct state funding makes this a straight voucher program.

And

Kehoe gave the SBOE marching orders to get on board… I want to be clear, this administration will not retain or appoint members of the State Board of Education who do not align with our vision.

SLPS “On the Bubble”

Quick educational aside before returning to the speech.  At that Senate Education hearing yesterday morning, DESE Commissioner Karla Eslinger described the St. Louis Public Schools as “on the bubble” of losing full accreditation.

As far as accreditation, they are on the bubble. They're about 60, what is it, 63.5, 64.7, the last two or three years, somewhere in there. It'll definitely be something that you've got to be able to push up to get that next step or they will become unaccredited or provisional. Right now they're accredited. The next step would be provisional. That's the same as it would be for any district that has those kinds of performance history.

STL Police Takeover Bill

Kehoe continues to push for the police takeover in his speech.  He said the business community’s behavior is the “canary in the coal mine” that he watches. 

[All] I care about is whether or not a business feels safe enough to invest in our cities. That’s the

barometer. Period.

Zeroing Out the Income Tax

Kehoe said he’s asked the Department of Revenue “to work with my staff on a sustainable and comprehensive plan to eliminate the individual income tax once and for all.”

He wants a “responsible plan,” but backs continued triggered slices in the meantime. “I ask you to work with us on this effort and add additional Senate Bill 509 style income tax cut triggers this session.”

·       SB 509 is a reference to a bill 10 years that started Missouri’s income tax cut journey.

Childcare Payment Reform

Kehoe made what seems like huge news for childcare providers.  Instead of payments coming from the state as reimbursements, they’ll be paid upfront.

So, starting in fiscal year 2026, providers will receive payments from the state at the beginning of the month and we will pay on enrollment – just like private pay. We will not allow late payments, or technology issues to put these small businesses at risk of not being able to provide for families in need of child care.

Two Sentences for Tort Reform

Kehoe only briefly championed tort reform.  We’ll see, given his full plate with crime, education and taxes, if there’s any oomph behind this.

In addition to tax cuts, I hope the legislature will send substantial tort reform to my desk this session. Under this administration, we will not let frivolous lawsuits and litigation crush economic growth.

And a few other pieces of news…

House Ethics Changes Proposed

8AM this morning the House Ethics Committee will hear proposed changes to their Ethics process, some clearly in response to last year’s investigation into Speaker Dean Plocher.  See the proposal here.

Two big changes…

·       “The Committee may issue and enforce subpoenas as allowed by law.”

·       “If in the course of investigating the complaint, the Committee discovers information that may indicate ethical misconduct by the respondent other than that outlined in the complaint, the Committee may, by a majority vote of the Committee, expand the scope of the investigation…”

Spencer PAC Lands Big Check

In St. Louis City’s mayoral race, Clayco Executive Chairman Bob Clark announced he was making a $100,000+ donation to the PAC of challenger Cara Spencer.  According to the press release, the amount – $111,330 – was “exactly what Clayco spent on responding to the city’s Request for Proposals (RFP) for the redevelopment of a 16.5-acre, long-desolate city-owned lot in North St. Louis.” 

·       Clayco’s plans were rejected by the City, prompting critics to cite the decision as an example of delusional leadership.  

What It Means

Neither Spencer not Mayor Tishaura Jones have raised much money in this campaign.

·       One observer: That’s what makes this contribution so significant. Neither candidate has raised much money. It’s like a touchdown in a 42-35 game is not as significant as a touchdown in a 9-6 game.

Correction

Monday, I wrote that Peg Gustafson (IG at Commerce and alum of Claire McCaskill) was fired in the Donald Trump’s IG purge last week.  That is not true.  She resigned on January 6, 2024.

Help Wanted

Planned Parenthood Great Rivers seeks Vice President of External Affairs. The Vice President of External Affairs is responsible for developing and leading the comprehensive external affairs vision and strategy that creates, evaluates, and advances partnerships, laws, and policies to help Planned Parenthood Great Rivers (PPGR) — and its advocacy and political arm, Planned Parenthood Great Rivers Action— to pursue and protect its goals, critical services, and programs. This role is responsible for developing and implementing political, policy, and organizing strategies that protect and expand access to sexual and reproductive health care in a bi-state region (Missouri and Illinois)… SALARY: $135,000-$170,000/Year.  See the posting here.

Lobbyist Registrations

Catalyst added Partners for Opportunity.

Michael Grote added Travelers Marketing LLC.

Jeff Smith added Missouri Alliance for Family Restoration.

Gretchen Leeann Waddell Barwick added Sierra Club, Missouri Chapter.         

Ruthie Barko added TechNet.

Tom Dempsey and Dave Berry added The Habitat Alliance.

Sean Ford Mackey deleted Kansas City Chiefs Football Club.

Birthdays

Happy birthdays to Brian Schmidt, Karen Buschmann, Craig Redmon, Alan Gray, Tommie Pierson Sr., and Allison Bruns.