The effect of Line 14 (at risk) funds on financial equity in the Missouri Foundation formula

In 1999 an equity study was completed by the Missouri Department of Elementary and Secondary Education on the new funding formula created by the Outstanding Schools Act of 1993. This study analyzed what improvement had occurred between 1992--93 (the year before the new formula was instituted) and 1997--98 (the year after the new formula was fully phased in). In this study the Missouri Department of Elementary and Secondary Education reviewed data for all Missouri school districts and data excluding hold harmless school districts. Hold harmless school districts are defined as those districts receiving the same amount of state aid under the new formula as collected with the old formula, thus allowing more revenue than they would normally receive.;One category of revenue not included in the original 1999 Missouri Department of Elementary and Secondary Education study was Line 14 (at risk) funds. Line 14 (at risk) funds generate revenue for at risk programs based on a January head count of each school district's free and reduced lunch students (poverty count). This study replicated the Missouri Department of Elementary and Secondary Education equity analysis, but included Line 14 (at risk) revenue into the analysis.;The Missouri Department of Elementary and Secondary Education study (1999b) concluded the new formula had made substantial progress in providing equal access to funding and had produced moderate gains in revenue equality among school districts. However, the 1999 study concluded the new funding formula would have greater equalizing power without the hold harmless provision.;The review of findings of this study reinforced the conclusions stated in the 1999 Missouri Department of Elementary and Secondary Education study regarding equity progress of the new OSA Missouri funding formula. However, additional knowledge was gained through analyzing Line 14 (at risk) revenue and further investigating the effect of hold-harmless schools. When analyzing all school districts in Missouri between 1992--93 and 1997--98 with Line 14 (at risk) revenues included, the data revealed an improvement in equity when compared to the analysis of all school districts without Line 14 (at risk) revenue included. However, when hold harmless school districts are removed from the analysis, the inclusion of Line 14 (at risk) revenues widens the equity gap among school districts.