Abridged Report from John Jones on Funding Alternatives
A LEGAL STRUCTURE FOR IMPLEMENTATION OF
ECONOMICS AND PERSONAL FINANCE EDUCATION
In the most general sense, education is a formal activity intended to transmit traditions, history, technology and knowledge of a culture from older generations to younger generations. Education (K-12) is also intended to at least partially prepare younger generations to participate in the division of labor that underlies our economy. We employ selected members of older generations (teachers) to spend time with members of younger generations (students) so younger generations can learn to function as successful participants in both present and future cultures. This process of intergenerational cultural and technological transfer is the result of purposeful human relationships occurring between parents, teachers and students. Therefore when it comes to education, the first priority of state government and its political subdivisions is to provide good, knowledgeable teachers to relate to and to instruct students.
Even when a society has provided good teachers, its education system can fail the culture it is suppose to support when the education system is providing instruction that is not directed properly to address the needs of society and its culture. All successful participants in our current culture must use money and credit to obtain the goods and services required for living. Therefore a good understanding of money management and the principles of economics are required for successful participation in our culture and economy.
Currently many people seem to be having difficulty with money management. This is evidenced by:
People continue to pay upwards of 300 percent interest to payday lenders.
College students are accumulating large credit card debt while in school.
Bankruptcies are at record frequencies nationally of more than one million per year for each of the last ten years.
Average credit card debt has more than tripled over the last ten years.
All of these trends point to a need for a coordinated statewide emphasis on money management and economics as part of public school curriculum and instruction in Missouri.
Even after making all of these previously mentioned changes to statutes which govern the preparation of future teachers, student assessments, curriculum materials, and high school graduation requirements this innovation might fail because the present generation of teachers is not prepared to teach the topics of economics and personal finance. A ten to twelve year program of professional development is required to jump start this change process before economics and personal finance education become an enduring part of the public education. It has been estimated by the Missouri Council on Economic Education that approximately $ 2 million will be needed to fund the needed curriculum development, assessment instruments, and in-service training of education personnel during the period of innovation acceptance required before economics and personal finance become accepted parts of the established educational program of public education.
Present state law requires the DESE to intercept 0.9 percent of the basic formula amount appropriated by the state for school districts for professional development purposes. This intercept currently earmarks about $ 17 million for training of teachers, administrators and boards of education in statewide areas of critical need. A subdivision should be added to subsection 2 of section 160.530, RSMo that identifies economics and personal finance education programs as a priority use of in-service training intercept monies expended by the DESE or its contracting agencies. Also it is reasonable to increase the intercept to 1.0 percent if economics and personal finance become added priorities for the use of this revenue stream.
Using the professional development intercept for economics and personal finance education startup costs leaves use of these monies at the discretion of the state board of education and the commissioner of education who could choose to use these monies for other eligible purposes and not for economics and personal finance purposes. Also as the state aid formula becomes more under-funded support for the concept of any type of intercept is eroded and political pressure will mount to repeal the whole intercept. In conclusion it is very reasonable to amend the list of uses of intercept funds to include economics and personal finance education but these funds should not be relied on alone to implement these programs.
Another way to fund state government activities relative to economics and personal finance education would involve establishment of an economics literacy revolving fund to be administered by the DESE. The statute authorizing this revolving fund could be patterned after section 160.268, RSMo that govern the excellence in education revolving fund. This new economics literacy revolving fund statute should address at least the following topics:
Which monies may be deposited in the revolving fund,
Purposes for which funds may be expended,
Investment and management of any fund reserves,
Agencies and agents responsible for management of fund activities,
A sunset date for the fund,
Disposition of any final, ending fund balances,
Record keeping and accounting requirements,
Beginning date or trigger for first use of the fund.
A revolving fund could receive monies from several sources and hold all monies until they are appropriated for use by the General Assembly. For example, the fund could receive monies from one or more of the following
· State general revenue appropriated for the program,
· Payments for services rendered from clients,
· Proceeds from a state filing fee for any claim of bankruptcy filed with a state agency,
· Donations from individuals or corporations with 50 percent of the first $ 1000 eligible to be claimed as a tax credit,
· Donations from foundations or not-for-profit agencies,
· Donations from individuals or corporations who can claim the gift as a reduction to taxable income,
· Corporate designation of $ 1 to $ 5 of its tax payment for the program of economics and personal finance education,
· Money from interception of state aid by the DESE as needed to maintain an ending revolving fund balance of $ 2 million.
The use of the revolving fund could begin the first year after the fund has reached a balance of $ 2 million or some other designated amount.