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.

Incongruous as it seems, the fate of 44,031 city schoolchildren -- 85 percent of whom qualify for free or reduced-price lunches -- has been Topic A for the past week at the elite law offices of Bryan, Cave in the Metropolitan Square Building downtown.

Also in the mix of the school-desegregation settlement talks is the fate of: the 12,853 African-American students from the city who voluntarily head each morning to schools in the suburbs; the popular and successful "magnet" schools in the city, which attract about 1,300 white suburban students; the $146 million in state funds that help pay for the city-county deseg program; and, last but not least, the financial health of the St. Louis city school district.

The out-of-court settlement talks in the 27-year-old lawsuit are just the first event of what promises to be a year from hell -- or possibly heaven -- for city schools.

Coming on the heels of the past week's negotiations is the Feb. 2 sales-tax ballot proposal, which city voters must approve for any settlement agreement to be enacted. Then the city schools will be assessed by the state in March to determine whether the district's accreditation should be renewed. If the district flunks the accreditation, the state gets to appoint a CEO to run the district, in accordance with landmark legislation (Senate Bill 781) passed last year by the Missouri Legislature.

In addition to the legal machinations and ballot-box possibilities, another classroom nightmare looms in the fall. About 900 of the city's 3,200 teachers are eligible to retire this year, and this is the first time prospective retirees have an added incentive. In previous years they would have received 37.5 percent of their average salary from their highest three wage-earning years; now they will receive 60 percent.

Last year about 200 teachers retired; this year the figure is expected to be higher. This in a district that started this school year with 270 teacher vacancies and routinely uses substitute teachers to handle classrooms on a long-term basis.

So the sales tax is but the first hurdle in a tricky and unavoidable obstacle course the city schools face this year, a year that has been a long time coming.

The suit, originally filed in 1972, evolved in 1983 into a school-choice program that allowed city African-American students to attend suburban schools. In 1996, a hearing triggered by the state led to the appointment of William Danforth, former chancellor of Washington University, as settlement coordinator. Since then, Danforth has played Monty Hall in this Let's Make a Deal spinoff. Clearly Danforth thinks what is visible is a better alternative than what's hidden behind Curtain No. 2 -- which is how U.S. District Judge Stephen Limbaugh or his successor would end the case if the sales tax fails and the suit returns to the judge.

Passing the two-thirds-cent sales tax would raise about $20 million a year in local revenues, triggering an estimated 2-to-1 match of state funds for a total, it is hoped, upward of $60 million in funds going to city schools. That amount would replace the current $70 million per year the city district gets in state funds for the court-sanctioned school-desegregation plan.

For city voters, the sales-tax measure presents a damned-if-you-do, damned-if-you-don't proposition. If voters approve the sales-tax increase, they end up getting less money from the state to help schools that they know already are in trouble. If they reject it, the wheels fall off the settlement and the fate of the city schools is in the hands of a federal judge.

Compounding the city schools' problems is the fact that the St. Louis Teachers Union is against the tax proposal for city schools. The union's 13-member executive board has voted unanimously not to endorse the sales-tax increase.

For union president Sheryl Davenport, it was a tough but clear call. Whatever is included in the settlement, the funding scheme will end up giving less money to a school district that she sees as historically stingy with its teachers. Of the 104 school districts in the region, the average salary of the city's teachers -- $33,269 a year -- ranked 73rd, according to a recent survey.

"So if you're talking about quality education and being able to provide services for students, increase student achievement, decrease the dropout rate, how do you do that with minimum pay to employees?" Davenport asks.

"We can't get substitute teachers now. We have teacher assistants subbing in classrooms because the district can't even pay their substitute a comparable rate with the surrounding school districts. So oftentimes if a certified person is absent, they're putting a teacher assistant in that classroom."

Davenport feels she has to take a tough stance for her rank and file, because the settlement talks did not include teachers and, for all she knows, did not consider their interests. With no collective-bargaining capability, she wants some assurance that city teachers "don't end up on the short end. We already know that the pie has been divided. So where are the people, the teachers, who implement this? Where's our piece?"

If Davenport and her union members sound unduly venal, don't be fooled. Money mattered to every party in the settlement talks -- how much, where it came from and who got it. This year, the state paid out about $146 million, with just half going to the city, the rest going to county districts and for transportation. That the head of the 3,200-member teachers' union is concerned enough to oppose the proposal that most see as the city district's best chance for navigating out of troubled waters is evidence of the seriousness of the situation, not blind self-interest.

The union has made the decision that the proposed sales tax and contingent state funds don't provide enough money to pay for what needs to be done in the city schools. If the settlement falls through, it goes back to the court; at this time, that means Judge Limbaugh. Basically, the teachers' union has decided that the courts would provide a softer landing and a better-funded phase-out -- or even a continuation -- of the desegregation plan than the deal that would be triggered by passage of the sales tax.

Those closer to the deal-making don't agree, describing the alternative to the sales tax's passing as nothing short of tragic. Danforth, the court-appointed settlement coordinator, sees the Missouri Legislature as having been, for once, in the forefront of public education when it passed SB 781, which set up a way to continue funding the desegregation program as long as an additional local tax is passed.

"The state has given us 781, and it's a remarkably generous piece of legislation when you consider what's gone on in every other state in the country," says Danforth. "There is no other state in the country that has a piece of legislation like this that is so sensitive to the needs of school districts with predominantly poor children. This is a once-in-a-generation opportunity. If we don't settle, or if we don't pass the tax, and we fail because of that, we will not be able to go back to the state Legislature again. This is the one chance we have, and it would be a tragedy to miss it."

James DeClue, a member of the education committee of the NAACP, which is a party in the settlement talks, thinks the teachers' union is misguided.

"I find it baffling as to why the teachers' union is opposing this," DeClue says. "If it isn't enough money, it's certainly better than no money. They have an option between this amount of money or no money. With no money, you have a bankrupt system, but with the money that can be raised as a result of matching funds from the state along with the money derived from the tax, we have essentially the same amount of money to continue the programs that have proved to be beneficial to students."

At least one weary negotiator involved in the marathon talks believes it is time to move on to more basic education issues and leave the legal maneuvering behind. Arriving at a settlement and passing the sales tax is the best, maybe only, deal in town.

"You try to balance all the issues. It's not a perfect solution and it causes financial difficulty for the district, but trying to move past the deseg debate and get to the student-achievement issues and the reform issues, to make inroads on those, it's worth it to get this behind us, so we can concentrate on that and quit arguing about the desegregation program. Make that a second-nature issue -- the integration will still be there, the policy will still be there. It's not the fairest way to distribute the financial obligations of the parties in order to get it done, but if it'll move the discussion to another level, I'm in support of it."

Whatever the view taken on the sales tax, this year will be a tumultuous one in the elongated life of the Liddell vs. Board of Education suit, which was filed in 1972. Minnie Liddell's children have long since grown up and graduated, some judges who have heard the case have died and thousands of students have moved through the system since the interdistrict transfer program began in 1983.

If the settlement and sales tax come to fruition, the program will get its first extrajudicial life-support system. If the program is thrown back into the lap of a judge, a slow death is more likely, easing transfer students out of the program over the next few years and scaling back the state's payments to the city and county schools. Either way, the much-maligned, sometimes heralded, desegregation plan will not remain the same.

When the Legislature, after much haggling and harrumphing, approved SB 781 last year, it appeared to be an imperfect remedy but a remedy nonetheless. Like any compromise, it had something to displease everyone, but the hope was that it didn't have so much that the people who had to make it happen would be repulsed. The state, the city and county school districts, and the original plaintiffs all had to see sufficient benefit in the deal to sign off on it.

The state wanted to curtail the money it was spending on the plan. The city school district didn't want to go bankrupt because it was not financially ready to take back the 12,000 African-American students who travel each day from the city to the suburbs for school. The 16 suburban school districts were at once concerned about losing the funds they derived from the desegregation program and also eager to be free to end their participation when they so desired. The plaintiffs -- Liddell and the NAACP -- generally wanted to continue the interdistrict transfer program, maintain the city magnet schools and improve academic-achievement levels.

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."

At least one city school-board member is uncomfortable with being faced with the Feb. 2 sales-tax vote: "What happens if the sales tax doesn't pass? There's nothing in 781 that will guarantee that we have money if the tax doesn't pass. We just ran a bond issue in April (and) said, 'No new taxes.' Can we turn around and say, 'Give us tax money?' It puts us in a real awkward position."

Awkward or not, that is where the city school system finds itself. Given real-world options of approving a tax hike or throwing their school district back on the mercy of the court, voters who bother to show up on Feb. 2 will be forced to make that call. It is a decision that will have repercussions for years, for generations to come.

Because Danforth has had to play King Solomon in this melodramatic epic, he is hopeful, yet worried, about the chances for passage of the sales tax on Feb. 2.

"I don't think it will be easy. We have a very short time to explain to people a very complicated situation," Danforth says. "I know not everyone agrees with me, but I think if you really sit down and say what's best for the children and what's best for the schools and what's best for the teachers, I just think there's no question about it -- 781 is not perfect, but it's the best game in town by a long, long shot."

Another person involved in the negotiations puts it more forcefully: "If the city of St. Louis doesn't vote this in, that will be nuts. The opportunity to get $100 million in capital improvements, the opportunity to get $2 from the state for every $1 you tax yourself, forever? That's phenomenal."

For what it's worth, the powers that be likely will push for the tax. Danforth was head of a task force on school desegregation put together by Civic Progress, the group of CEOs of the St. Louis area's largest corporations. The task force announced its support of the program, and later Danforth was appointed settlement coordinator by U.S. District Judge George Gunn, who has since died. It is expected that Civic Progress will finance a campaign to pass the sales tax.

But if sending Danforth back to Judge Limbaugh with no settlement is basing the future of the area's public education on a crapshoot, then predicting what might happen on the Feb. 2 vote is a coin toss. In April, city voters approved city-school bond issues by a 78 percent majority. There was a small turnout, not much else on the ballot, and no tax increase involved, so it's chancy to draw conclusions.

Word is, supporters of the sales tax have conducted a poll that has revealed the proposal has a good chance of passing. But that's a poll, not an election. If there's an ice storm or a violent incident in a public school that week, who knows which way the vote will go?

Even if the proposal passes, the challenge before the city district will be to find places to cut the budget to make up for the shortfall from the current level of state funding of the deseg program. If it fails, the court case continues. Even if Limbaugh (who is uncle to radio talk-show host Rush Limbaugh) makes a ruling on the case without an additional hearing, appeals could take years.

The accreditation issue looms as a parallel set of real dilemmas for the city school district, as do the changes in the retirement system for city teachers. The change in retirement benefits was made to be more competitive with other school districts, Davenport says, which often pay 60 to 75 percent of a teacher's average salary from the most recent three years. But that increase in the city, to 60 percent from 37.5 percent, may have the unintended consequence of triggering more teachers' quitting.

The anticipation, or fear, is that more will make the leap this year. Although they are asked to announce by April 15, teachers could use sick days to delay making retirement official until the summer, thereby retaining health insurance. A mass exodus of retiring teachers is not good news.

"The numbers are too frightening to think about. There are lots and lots of principals and teachers waiting for June," says Davenport. "There are a lot of people who are eligible and ready."

So, just considering eventual accreditation problems and potential teacher retirements, city schools face an uncertain future. Even if the settlement works and the tax is passed, Davenport says, difficult times are ahead.

"That's what the parties would want you to believe, is that 'Now we can throw our hands up in the air and go back to what we were doing. I got your money, you got yours, let's go home.' But educating kids goes on; it's everyday. The attention we garnered is good, but it's not the end of what ails the St. Louis public schools."

And if the desegregation program is wound down improperly and students are treated unfairly, a familiar option may surface.

"It will only make somebody go back to court," says Davenport. "The door to the court does not lock when the case is settled. Just like when the Liddells went to court the first time, somebody will go back to court and say, 'This isn't fair.' And it will be appealed and appealed and appealed.

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