The End of Deseg As We Know It

City schools face an uncertain future -- a crucial court settlement, a Feb. 2 sales-tax vote, a teachers' union opposed to the tax, accreditation tests this spring and the prospect of a state takeover. It could be a school year from hell.

The Legislature's effort was an attempt to achieve all that and more. Because of the bad light in which the city schools were seen by many in Jefferson City, there was a pejorative aspect to SB 781. A three-person, state-appointed "overlay" board, including a powerful CEO, would take over the district should its schools lose accreditation (see sidebar). The state's foundation formula would kick in about $40 million only if the city raised $20 million on its own. The city's 12-member school board, elected citywide, would be whittled down to a seven-member, single-member district board by 2003. Charter schools would be allowed in the city but not in the county.

For the suburban districts, SB 781 allowed, after six years, the option to have a public vote in each district to see whether residents wanted to opt out of the program. To exit, the suburban districts would have to allow city transfer students to finish in their current schools -- which, in the case of an elementary-school student, would be six years after the vote. Transportation costs of the transfer program would be covered by the state for two years, and changes, including zoning areas of the city to link them with specific suburban schools, would be made to save money.

The plaintiffs saw SB 781 as a way to continue school choice. Voluntary interdistrict transfer students and magnet-school students had a graduation rate twice that of students in nonmagnet city high schools. The bill provides continued funding of those programs.

That was how SB 781 was viewed back when it was passed in June. But when settlement talks resumed, something happened.

"The major problem that happened is that 781 was a framework for a settlement, but everyone started using it as a floor," says one of the parties involved in the talks. Another exasperated participant put it this way: "781 was a deal, but now everyone wants to break the deal."

The city Board of Education wanted more time to prepare for accreditation and wanted up-front money to reopen or build schools. The district had said it needed $100 million from the state for capital improvements to prepare for returning students as the program was phased out. Later, the district said it needed twice that amount.

Some suburban school districts wanted the option to start their phase-outs as soon as a vote could be taken or, better yet, to begin phase-outs without requiring a public vote. Instead of waiting for six years to begin the separation, they wanted to start, at most, in three years. They wanted more money from the state to avoid teacher layoffs and staff reductions. They wanted more money for transportation costs.

As the negotiations lengthened and the Dec. 31 deadline imposed by Danforth approached and passed, the suburban districts were seen as the hangup.

"For the suburbs, so what if it's back to court? The judge will just order a phase-out anyway," says one participant. "That's why the suburbs carry the biggest club -- they have absolutely nothing to gain by settling. They're not getting any big deal now one way or the other. Their only big play is for the people who really want to get out to be able to get out."

For the city schools, the timing of any phase-out is critical to its financial health. If the suburban districts were to be given a faster timetable by which to leave the transfer program, the city would need more capital-improvement money from the state to build and rehab schools to accept the returning students. A slower transition, or the possibility of long-term continuation of transfers, would mean a less urgent need for state funds. With a decreasing tax base, the school district had little margin for error, because it has already closed numerous schools and has overcrowding in South St. Louis schools.

One aspect of SB 781 that no one could get around was a tax hike. By requiring that the city raise $20 million to get another $40 million, the Legislature produced money -- the savings from the current level of funding -- to sprinkle around to other school districts. Those savings -- and therefore the sales-tax increase -- were crucial to gaining enough support in the Legislature to pass the bill.

A few fundamental questions surfaced once the three-person overlay board picked a sales tax to go on the ballot Feb. 2. The election date was determined somewhat by SB 781's deadline of March 15 to have a full settlement, including the tax, submitted to the court. Because the settlement needed the tax and the tax had nothing to fund without a settlement, a date in early February was chosen. But the Legislature never funded the transitional board or stated who would pay for the election.

The city wouldn't pay for the election because it was not a city election and the city's board of education couldn't because the sales tax was not a tax proposed by the board, so eventually the state agreed to pay for the election.

"The Danforth Foundation has given the overlay board some help to get the operation going," Danforth says, adding that the foundation covered the board's legal fees. "The foundation cannot be giving any money to put the proposition on the ballot or to running any kind of campaign."

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