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Learn About the Missouri Foundation Formula

This is Part II of a two-part post explaining the Missouri Foundation Formula. For Part I, please click here

Previously, we discussed two of the four key components of the Missouri Foundation Formula: Weighted Average Daily Attendance (WADA) and The State Adequacy Target (SAT). Today, we’ll explain the third and four components of the Formula: The Dollar Value Modifier (DVM) and Local Effort.

The Dollar Value Modifier (DVM)
The Dollar Value Modifier is an index of the relative purchasing power of a dollar across the state of Missouri. In other words, the DVM accounts for the various costs of living in different communities.

The DVM comes into play in the Foundation Formula by providing more money to schools that operate in areas with higher costs of living.

It’s important to understand that while schools in more expensive parts of the state receive additional funding to help cover their operational costs, schools in areas with lower costs of living do not experience a removal of funding. Funds in the Foundation Formula are never reduced as a result of lower cost of living in a school district.

Local Effort
While the WADA, SAT, and DVM help determine the total target amount of money that it should cost to adequately and equitably educate Missouri’s public school students, Local Effort describes the portion of that total cost that can be generated by local sources like property taxes.

After calculating WADA, SAT, and DVM, the state subtracts Local Effort. The difference is the amount of money that the state must provide in order to ensure that the spending target is met for each student.

The result of this final piece of the Foundation Formula is that in communities where more school funding can be generated locally, the state offers less fiscal support. The reverse is also true: in areas where less local funding is available for schools, the state’s Foundation Formula helps make up the difference to ensure that enough funding is provided so that students across the state — regardless of local wealth — receive an adequate public education.

This two-part post was intended to give you a broad understanding of what the Missouri Foundation Formula is and why it matters for Missouri’s public schools. To learn more about recent advocacy for full funding of the Formula, read our post, Exciting News for the Missouri School Funding Formula.

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