Looming deadline leaves Missouri at risk of losing $2 billion in federal education funding

Missouri has so much money, coming so fast, from federal COVID-19 relief bills that it is in danger of losing almost $2 billion dedicated to schools.

As Education Commissioner Margie Vandeven last week sought support for projects to improve teacher retention, members of the legislature’s Federal Stimulus Spending Subcommittee wanted to know how a key federal deadline escaped their notice.

The American Rescue Plan Act, passed in March, is the source of the money. The U.S. Education Department approved the state’s plan and released the last of the money in early October.

The problem is that the money can’t be spent until there’s an appropriation. And unless lawmakers pass, and Gov. Mike Parson signs, a supplemental appropriations bill before March 24, the money has to be returned.

“It is Nov. 16 and we are not in session until Jan. 5,” Chairman Doug Richey, R-Excelsior Springs, told Vandeven in the hearing. “There is a tremendous amount of work that is going to be required to move a supplemental bill of that nature. It would have been nice if we would have had a bit of a yellow flag waving at a minimum.”

Most of the aid coming to states as a result of the American Rescue Plan Act must be appropriated by 2024 and spent by 2026. The committee has been working to use the money on those timelines, Richey said.

Examining the Department of Elementary and Secondary Education’s documents, he said, a note was found indicating the deadline date. But it was hardly a prominent feature.

“I guess I’m a little baffled by the fact that this committee, that we have had virtually no contact from anyone within DESE saying, ‘Hey, we really got to take a look at this,’” Richey said.

Part of the problem, said Kari Monses, the department’s finance officer, was a common assumption that there would be a special legislative session sometime in the fall. 

“We probably made a false assumption that it would be addressed, maybe sooner in the process,” Monses said.

There were expectations, when lawmakers went home in May, that they would come back to draw new Congressional districts once population data was available. Other issues, such as how to spend billions in federal relief, were expected to be on the table. Groups of legislators made a variety of issues their target for work in a fall session.

In September, Parson left open the possibility of a special session to respond to federal vaccine mandates.

“I would say we were hopeful that there would be some discussion about a supplemental even in the veto session in September,” Monses said.

But with warring Republican factions in the state Senate unable to work smoothly on procedural or policy issues, the only special session this year was a short meeting to renew taxes essential to funding Medicaid.

“I will say there are many who were under the impression, early on, that there would be other opportunities during special sessions to look at matters,” Richey agreed.

Of the $1.95 billion in Missouri’s allocation, $1.76 billion has to go to local education agencies, which covers both school districts and charter schools.The remainder, about $195 million, is for the state education department to develop statewide plans to address learning loss and develop summer and after-school programs.

School districts will be eager to get the money, Richey said. Lawmakers are going to get pressure from superintendents to get a spending bill passed but the timing is out of their control, he said.

Missouri’s 55-page plan, submitted in April, aligns with the guidance documents by providing data on which student groups have had the biggest impact from learning loss, addressing teacher retention needs and development of local plans.

The supplemental spending bill for the current fiscal year is likely to be one of the largest, and most controversial, in years. In July, the MIssouri Supreme Court ruled that the state must expand Medicaid as directed by a voter initiative even though lawmakers did not make any appropriation for that specific purpose.

That is only one item likely to complicate the opening weeks of the upcoming session. Passing a single-item supplemental spending bill isn’t an impossible task. Lawmakers did so last year by Feb. 11, when Parson signed a bill spending $324 million on rental assistance.

The bill covering other supplemental needs did not pass until May.

“We are going to have to approve $2 billion in a supplemental (budget) along with other supplemental requests,” Richey said, “in a bit of a matter of controversy.”