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JEFFERSON CITY — A group of state officials and business leaders tasked by Gov. Mike Kehoe with creating a new formula to fund Missouri’s public schools gathered for the first time on Monday under an expectation that funding should be below what lawmakers approved earlier this year.

Halle Herbert, the governor’s incoming policy director, told the group that Kehoe seeks funding “consistent with what is provided in the state fiscal year 2025 budget.”

Last month, lawmakers signed off on public education funding that was $300 million higher than what the governor recommended.

“A lot of times when you ask a school superintendent, ‘where are the problems? ….’ They ask for more money,” Kehoe told the group Monday. “That is not a great answer to me…. That can’t always be the answer to every problem.”

Between fiscal year 2025 and 2026, a multiplier in the formula called the “state adequacy target” increased. This number is the Missouri Department of Elementary and Secondary Education’s estimate of proper per-pupil funding and is calculated by looking at top-performing schools in the state’s annual performance reports.

The change was driven by a new iteration of the state’s accountability system, called the Missouri School Improvement Program, which was introduced in 2022 and became more “rigorous” for districts to score high and produced a smaller number of districts that could be deemed top performers.

The program is required by law to be phased in, making fiscal year 2026 the first year with the updated state adequacy target. This change requires an additional $300 million to fully fund the foundation formula.

Kehoe’s proposed budget this January did not include the $300 million increase, and his comments in Monday’s meeting show an intention to tamp down the rising costs of public education.

Kari Monsees, deputy commissioner of financial and administrative services, said part of Kehoe’s intention with calling for a change to the formula comes from the “unpredictability” of the state adequacy target.

State Rep. Ed Lewis, a Republican from Moberly and former educator, pointed out that there was a 12% increase in the multiplier this year — but before now, it had only increased 4% in 16 years.

Superintendents have been asking for a formula that responds to inflation for years, arguing lawmakers “manipulated” the formula to keep funding flat.

A study commissioned by the department and released in 2023 concluded that the current formula hurts districts with more low-income students. Multipliers for serving sensitive student groups were “not based on any empirical analysis,” the study determined.

The study recommends looking at other states and the cost associated with desired performance outcomes to determine whether the per-pupil funding is enough.

But Kehoe is seeking financial incentives for high performance.

Monsees said there aren’t many states with performance in school funding formulas and alluded to a lack of information on that model.

The group that met Monday was created by an executive order Kehoe shortly after taking office. He appointed members representing public schools, agriculture, business and charter schools.

One member is to represent “a non-profit organization that works on expanding school choice in Missouri,” according to the order. Kehoe chose Chris Vas, a senior director with the Herzog Foundation. The foundation “advances K-12 Christian education primarily,” Vas said Monday.

There was some discussion that the formula, which was previously intended to fund public districts, should also be responsible for funding charter schools and vouchers for private education.

Committee member Michael Podgursky, an economics professor at the University of Missouri–Columbia, said there “was an active discussion of interdisciplinary school choice.”

“How do you design a funding mechanism with school choice, which really means thinking about tying it more to kids,” he said.

Podgursky has served as a fellow with various conservative research groups, such as the Fordham Institute and the George W. Bush Institute and is a director at the conservative think tank the Show-Me Institute.

The group must come up with recommendations to deliver to the governor by Dec. 1, 2026.