Missouri funding task force: Design choices meet fiscal reality

The Missouri School Funding Modernization Task Force held its first full meeting of 2026 this week, quickly moving into the work that will ultimately shape the recommendations it makes to the Governor by December.

The discussion centered on two of the four working group recommendations that get to the heart of school finance: how Missouri sets a statewide funding target per student, and how the state counts students to distribute aid to school districts.

Underlying the meeting was a tension between designing a new formula and budget realities, a common restraint for states going through this process. Task force members are weighing whether to design a funding formula that is structurally sound and durable over time — using policy levers to manage cost and implementation — or to build a system around a targeted dollar figure first and adjust the formula to fit within budget constraints.

That question carries added weight this year as the Governor’s proposed budget holds formula funding flat and directs the task force to remain mindful of the formula’s bottom line.

Reviewing the working group recommendations

Funding targets. The Funding Targets Working Group recommended retaining Missouri’s existing formula structure but significantly revising how the State Adequacy Target (SAT) is calculated and updated over time. Currently, the SAT is intended to represent the per-student cost of an adequate education, but in practice, it has been adjusted in an opaque and infrequent manner.

The proposal would see the SAT recalculated on a regular cycle using a “Successful Schools” model, much like the current SAT. However, instead of relying on a narrow set of districts meeting a single performance cutoff (current SAT), the state would: 

• Identify a broad group of high-performing districts — the top 100 districts are often suggested.
• Calculate these districts’ operating expenditures per weighted student (accounting for different student populations).
• Remove extreme outliers.
• Use the remaining average to establish a new adequacy target.

The intent in the proposal is to ground the SAT in observable spending patterns while reducing volatility caused by small changes in performance classifications over time.

The proposal also recommended recalculating the SAT every two years, phasing in any increases over multiple years, and requiring periodic reviews of the methodology to ensure it remains aligned with changes in costs and policy.

Finally, the Funding Targets Working Group also proposed replacing the current Dollar Value Modifier (DVM) with a new labor-cost index built from more reliable wage data sources blended across multiple years.

The current DVM is a long-standing component of the formula that adjusts funding on the margins to reflect differences in local labor costs (i.e., what districts pay to recruit and retain teachers).

The current DVM can’t be updated going forward as it relies on federal data that is no longer produced. The task force is looking at a replacement wage data source and blending multiple years to preserve the DVM’s core purpose while reducing inflation-driven volatility.

Student counts. The Student Counts Working Group focused on how Missouri counts students for funding purposes, recommending a shift from the current hybrid attendance/enrollment-based system to one that averages enrollment over time.

Missouri remains an outlier nationally in relying on attendance, and the group argued that districts budget based on who is enrolled, while others proposed that attendance incentives would be maintained in the state’s accountability system.

The group also recommended eliminating the thresholds that currently limit how many students from specific populations are fully counted for additional funding. The proposed change would expand funding to all students from low-income backgrounds, students with disabilities, English language learners, and young students served through pre-K.

In practical terms, removing the thresholds would bring thousands of additional high-needs students into the formula who are currently undercounted. Task force members were clear about the implications of this recommendation: it would better align funding with student needs, but it also carries a meaningful fiscal impact that would have to be managed.

Aligned’s take: This meeting finally put real design choices on the table. Recalculating the SAT on a predictable cycle, modernizing labor-cost adjustment with current data, and shifting to enrollment-based counts are the kinds of structural fixes that can make the formula more accurate and easier to explain.

But the familiar risk is already showing up: as the Task Force layers some tweaks to the current formula — each reasonable on its own — the overall system starts to look like a patchwork.

Missouri has a basic choice to make. It can build a formula that is sound and evergreen first, then use transparent policy levers to manage cost and the pace of implementation. Or it can build the system around a target number up front and let that constraint drive the design. The second path is how formulas slowly lose coherence: math starts serving the budget, instead of the budget responding to a formula that’s built to last.

Kansas News

Kansas policymakers take a closer look at identifying “at-risk” students

Kansas lawmakers are taking a closer look at how students are identified as “at-risk” for funding purposes, prompted by a recent State Auditor report and the proposal outlined in S.B. 387.

The bill, heard this week in the Senate Committee on Government Efficiency, would require school districts to verify household income for students qualifying for free meals through applications, while placing new limits on districts’ ability to participate in the federal Community Eligibility Provision (CEP) without legislative approval.

CEP is a federal program that lets eligible schools offer free meals to all students without collecting household income applications. The program improves access and reduces paperwork but weakens the meal-application data Kansas has historically used as a proxy to identify and fund “at-risk” students.

A key issue emerged during testimony on Thursday: state efforts to tighten verification requirements may conflict with federal law governing the National School Lunch Program, which strictly limits how and how often income eligibility can be verified.

What the State Auditor found

Last week, we flagged a State Auditor report examining how Kansas counts students for at-risk funding. This week, we want to briefly unpack what the audit found and why it matters.

In 2023-24, about 198,000 students were counted as free-lunch eligible and therefore potentially eligible for at-risk funding. Roughly 80% qualified through automatic “direct certification” (such as SNAP, Medicaid, foster care, or homelessness), meaning families did not submit income information to schools.

Another 16% qualified by submitting a household income application, and about 4% through income surveys at Community Eligibility Provision schools.

The audit focused on that smaller income-application group and found a significant problem: between 54% and 72% of those students likely did not meet income eligibility rules, often by wide margins. While this affects a minority of students overall, the auditor estimates the state may have overpaid $38–$53 million in at-risk funding in a single year.

Importantly, the audit did not find misconduct by school districts. Instead, it highlighted a structural problem: federal law sharply limits districts’ authority to verify income information, meaning the state is relying on a data source it cannot meaningfully audit or enforce.

That tension featured prominently in SB 387 testimony, where witnesses noted that expanding verification beyond federal limits could put Kansas out of compliance with federal regulations — and potentially jeopardize roughly $250 million per year in federal school nutrition funds, according to the bill’s fiscal note.

The broader takeaway is less about enforcement and more about design. Direct certification appears to be a more reliable and defensible method for identifying students from low-income backgrounds than self-reported income forms, particularly as free meal programs expand and traditional application data becomes less relevant.

Legislators also looked at this report and issue in other committees this week, including the House Committee on K-12 Education Budget.

How states count students from low-income backgrounds

Kansas is not alone in confronting this issue. As free meals have become more common — through CEP, pandemic-era waivers, and state universal meal programs — states have had to rethink how they identify and count students facing economic barriers for funding and accountability purposes.

Common policy approaches include:

• Direct certification as the primary measure, using participation in programs like SNAP, TANF, Medicaid, foster care, or homelessness (now the most common alternative nationally).
• Supplemental income forms alongside direct certification, particularly in CEP schools, to capture students who may be missed by federal benefit data.
• State-developed family income surveys, often offered annually and in multiple languages, to replace free- and reduced-price lunch data.
• Census- or community-based poverty measures, using external data rather than school meal eligibility altogether.
• Hybrid models that combine direct certification with additional indicators to better capture student needs while avoiding reliance on unverifiable income reporting.

As lawmakers debate SB 387, the underlying policy question is not just how to tighten verification, but whether free lunch eligibility — especially when tied to self-reported income — remains the right proxy for identifying at-risk students at all.

Aligned’s Kansas priority bill tracker has been updated with the latest committee action and testimony on key education bills; check it out!

In other news

• Blueprint for Literacy director seeks comprehensive plan
• How Strong Are States’ Student Cellphone Restrictions?
• Education Dept. Eyes Rewrite of Accreditation Rules

Missouri News

Missouri legislative update

The House Elementary and Secondary Education Committee heard two bills this week tied closely to Aligned’s priorities: H.B. 2710 (A–F accountability) and H.B. 2872 (literacy). The hearings drew significant public interest, especially the accountability proposal.

Note: Governor Kehoe has also signed an executive order directing the state to implement an A–F accountability system; H.B. 2710 is the vehicle to put that policy into state law and spell out how it would work.

A-F accountability

H.B. 2710 would require Missouri to give every school a letter grade (A-F) based on a set of performance measures that focus on student outcomes, not inputs. For most schools, ratings would combine how well students are performing and how much they are improving over time, using statewide assessments.

Measures that go into each school’s grade include:

• Achievement: Percent of students proficient or higher on state ELA, math, and science assessments.
• Growth (two measures): Value-added growth (year-over-year growth vs. peers); Growth to proficiency (progress toward reaching proficiency on a defined trajectory). Both growth measures are calculated for all students and the lowest-performing quartile.
• High school only: 4-year graduation rate.
• High school only: “Success Ready Graduate” indicator (e.g., AP/IB performance, dual credit, industry-recognized credentials, early college/associate degree, stackable credentials).
• Participation: If fewer than 95% of students take required state assessments, the school’s rating is lowered by one level.

What we heard in testimony: Supporters argued that a simple A–F signal gives families clearer information and creates pressure to improve — often pointing to other states’ accountability-driven improvement narratives.

Opponents generally didn’t argue against transparency; they argued that letter grades can oversimplify school quality and can end up functioning as a high-stakes label that tracks poverty and demographics as much as instruction.

Literacy

This bill aimed at tightening Missouri’s early literacy approach by narrowing what counts as acceptable reading instruction and strengthening how schools identify and respond to reading struggles. The core ideas of the bill include:



• More consistent early identification of students who are behind in reading (screening/diagnostics)
• Clearer expectations for evidence-based reading instruction (the debate here is the bill’s approach to limiting “three-cueing” practices)
• More structured interventions/support for students with significant reading challenges
• Retention and intervention: The bill requires clearer retention use of third grade students and intensive intervention for students who are not reading on grade level, tying promotion decisions more directly to demonstrated reading proficiency rather than automatic advancement.
• Stronger alignment between state policy and what literacy research points out (phonemic awareness/phonics, fluency, vocabulary, comprehension—the “science of reading” bundle)

What we heard in testimony: Supporters framed this as tightening practice around what works and reducing instructional drift.

Critics focused less on the goal (better reading outcomes) and more on how prescriptive the bill is, arguing that it may constrain educators’ tools and could be implemented in a way that’s more compliance-driven than student-driven.

Aligned testified in support of both bills, emphasizing that clear, outcomes-focused accountability is essential for transparency and continuous improvement. At the same time, Missouri’s reading policy needs stronger, more enforceable expectations to ensure early literacy gaps are identified and addressed by evidence-based interventions before they widen.

Action on several other education bills — including open enrollment — did not occur as expected this week, as committees instead moved into executive session; consideration and potential votes are now anticipated next week.

Aligned’s priority bill tracker has been updated with the latest developments on key Missouri education legislation and what to watch next as these bills move forward.

In other news

• Physical ed. requirements in Missouri schools could increase under proposed bill
• Former KCPS leader returns home to Independence
• Low-Earning Degrees Will Soon Lose Access to Federal Loans

Aligned announces new board chair

Thank you, Kelly Dreyer — Welcome, Andrea Sellers!

Leadership transitions are meaningful moments for any organization, and at Aligned, we are especially grateful for the leaders who help guide our work with care and purpose.

We extend our sincere thanks to Kelly Dreyer, Principal at MultiStudio, for his exceptional service as Board Chair over the past two years. Kelly’s steady, thoughtful leadership helped guide Aligned through a season of change with the resilience needed to sustain and strengthen our work for the future.

His approach was marked by humility, strategic thinking, and a commitment to accuracy, and he consistently pushed our team to ask hard questions, stay focused on the facts, and ensure more voices were included in the conversation. His impact on our organization’s growth and stability will be felt for years to come.

As we celebrate Kelly’s contributions, we are also excited to welcome Andrea Sellers, Senior Corporate Counsel at GKCCF/Greater Horizons, as our new Board Chair. Andrea brings a powerful combination of legal expertise and deep nonprofit knowledge, along with a clear commitment to community impact. Her experience and insight will help provide guidance and clarity as Aligned continues its work across Kansas and Missouri.

With Andrea stepping into this role and the strong foundation built during Kelly’s tenure, we are well-positioned for the road ahead. Together with our board, partners, and supporters, we remain focused on our vision of ensuring every student can succeed.

We are grateful for Kelly’s leadership and enthusiastic about this next chapter under Andrea’s guidance.

Have a great weekend,

Torree Pederson

President

torree@wearealigned.org

Eric Syverson

Vice President of Policy & Research

erics@wearealigned.org

About Aligned

Aligned is the only state-wide non-profit, nonpartisan business group working in Kansas and Missouri on educational issues impacting the full development of our children, from supporting high-quality early learning to solid secondary programs that provide rigorous academic programs and real-world learning opportunities.

Our vision is that our public education systems in Kansas and Missouri have the resources and flexibility to prepare students to pursue the future of their choice.

We are currently focused on education policies that will strengthen early childhood systems, expand the teacher workforce, modernize school finance, improve literacy, accelerate data and accountability systems, and support safe, focused learning environments.

Learn more about our work.