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October 2026

Basic Formula

The payment was based on the current data available for Fiscal Years 2024-25, 2025-26, and 2026-27 combined weighted average membership (WM) and weighted average daily attendance (WADA). Payment uses the highest of the three years, less that year's summer school, plus the current year summer school. Calculation documentation can be found linked on the payment transmittal. 

The initial FY 2027 payment has been calculated using a State Adequacy Target (SAT) of $6,750. Please see Commentary section for additional detail.

Classroom Trust Fund

The payment was calculated using FY 2025-26 average daily attendance (ADA) data. 

Classroom Trust Fund monies are a part of the state formula payment but are specifically made up of revenues received from gaming taxes.  If gaming revenues were to reach the amount appropriated, the CTF payment would be $560 per ADA.  However, gaming revenues have a history of running short of the full appropriation; therefore, budgeting conservatively is recommended.

Prop C

The payment was calculated using FY 2025-26 combined weighted average membership (WM) and weighted average daily attendance (WADA) data. 

At this time DESE believes cash will be available to provide full funding of the $1,306,961,000 appropriation making the FY 2027 annualized amount per combined WM/WADA  $1,468. 

Transportation

This is the first live state transportation calculation made for the current year. The calculation is based on 2025-26 school year data submitted by the district on the state transportation aid documents included in Part IV of the Annual Secretary of the Board Report (Application for State Transportation Aid, School Bus and Facility Depreciation Schedules). Calculation documentation can be found linked on the payment transmittal.

The percent of reduction to the calculated entitlement computed for the October FY 2027 calculation is shown below. This reduction percentage represents the amount the entitlement exceeded the appropriation and will fluctuate from month-to-month as revisions are made to individual school district data. The A and B factors are reflected on each district’s Summary Transportation Report found on the payment transmittal.

The percentage reduction and the A and B factors are as follows:

Small Schools Grant

Section 173.044, RSMo, authorizes payments to small schools defined as districts with an average daily attendance (including summer school) of 350 or less. The allocation of the $30 million appropriation requires that $20 million be distributed to the eligible districts on an equal amount per prior year average daily attendance. The remaining $10 million is distributed (on an equal amount per tax rate weighted average daily attendance) to the eligible districts with a current year adjusted Incidental plus Teachers Funds tax rate of $3.43 or higher and any district which previously had an Incidental plus Teachers Fund tax rate of $3.43 or higher but currently has a tax rate less than $3.43 solely due to modification of such levy required under Section 137.073.5(4), RSMo.

The first Small Schools Grant payment for 2026-27 was calculated in October using the best data available for each district. The October payment is 4/12ths of the annualized calculation. The remaining payments will be approximately 1/12th of the annualized calculation. The district’s calculation is available through the payment transmittal.

Charter School Payment

A charter school payment simulation tool is posted to the School Finance Calculation Tools website.

The charter sponsor cap is to be recalculated each year per 160.400.11 RSMo. It has been calculated at $199,617.44 for FY 2027.

The payment was based on the current data available for Fiscal Years 2024-25, 2025-26, and 2026-27 combined weighted average membership (WM) and weighted average daily attendance (WADA). Payment uses the highest of the three years, less that year's summer school, plus the current year summer school. Calculation documentation can be found linked on the payment transmittal. 

Payment Data

Information you need to accurately project your budget for the current and future years.

The dollar value modifier (DVM) may be viewed under State Aid Payment Data Portion of the School Finance website.

Section 163.011 RSMo. requires information from the Bureau of Economic Analysis of the United States Department of Commerce to be used in determining the regional wage per job component of the DVM calculation. Currently, the information is not available. Until such time the data becomes available, the FY 2026 DVM will continue to be used in the Basic Formula Calculation.

Footnotes:

1. Paid on a Formula WM/WADA Combination. 
2. Paid using prior year ADA.
3. Paid using prior year WM/WADA Combination.
4. Paid using prior year tax-rate adjusted ADA.
5. Maximum funding is 75% of allowable home-to-school-to-home cost. Shortfall in appropriation/cash will cause further proration to amounts owed. 

Percentage increase in appropriation will affect each LEA differently. See transportation calculation for actual reimbursement amounts.

These amounts will only be achieved if revenue is available to fund at the level appropriated. 

Starting in FY 2026, student counts in the Foundation Formula statue have been modified to create a Weighted Membership (WM) calculation. Weighted Membership is the average of September and January Membership, plus summer school membership.  

The definition of Weighted Average Daily Attendance (WADA) changes as follows:

• FY 2026 90.00% of WADA + 10.00% of WM
• FY 2027 80.00% of WADA + 20.00% of WM
• FY 2028 70.00% of WADA + 30.00% of WM
• FY 2029 60.00% of WADA + 40.00% of WM
• FY 2030 and subsequent years 50.00% of WADA + 50.00% of WM

Note: half-day programs' membership will be divided by 2 for use in this calculation.

Commentary on Calculated SAT vs. Funded SAT

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The State Adequacy Target is recalculated every two years. For the last cycle (FY 2025 & FY 2026) and for the next cycle (FY 2027 & FY 2028), the calculated SAT is $7,145.

It is important to understand that payment of the fullly calculated SAT depends on adequate appropriation and on funds being available. Appropriation for FY 2027 will not be adequate to pay a SAT of $7,145.

The FY 2027 DESE budget is included in HB 2002. That bill has been approved by the legislature and signed by the Governor. In that bill, legislators adjusted some of the appropriations to account for continued potential shortfalls in the revenue sources of lottery, cigarette tax, gaming, and general revenue. The bill also added revenue taken from sources such as the Missouri State Capitol Commission Capitol Preservation Fund and Blind Pension Fund to make up for the potential shortfalls. The result is that the appropriation for FY 2027 is the same as for FY 2026. That appropriation totals $4,282,736,000.

It should also be noted that HB 2020, which has also been approved by the Governor, includes additional funding that could help offset shortfalls in the revenue sources of lottery, cigarette tax, and gaming. It is our understanding that $27 million or more may be available for such purposes. However, in any scenario, total funding for the formula in FY 2027 will not exceed the FY 2026 appropriation of $4,282,736,000.

As explained in the FY 2027 budget request, DESE also needed an additional $190.6 million in the FY 2027 budget to fully fund the formula. This has not been added to the budget for FY 2027. Without the additional $190.6 million, the calculated SAT of $7,145 will not be achievable.  The amount paid for the SAT in FY 2027 could theoretically be $6,900 if all other funding comes in as projected.  

LEAs are advised to exercise great caution in building their budget for FY 2027. Please consider factoring in the likelihood of a shortfall in the foundation formula. The SAT used in payment starting in July for FY 2027 will start at $6,750 and will not be moved upward until the department has confidence in the level of revenue being received. Again, the SAT for FY 2027 could theoretically be $6,900 if all other funding comes in as projected.

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Fiscal Year 2028 Budget Request and Projections

The Missouri State Board of Education met on Sept. 15, 2026.  At that meeting, the Board approved the Fiscal Year 2028 budget as presented except in regard to the foundation formula.  The State Board directed that the total budget request for the foundation formula be reduced to remain at the Fiscal Year 2027 level of $4,282,736,000.  This amount is approximately $270 million less than the amount required to fully fund the formula.

Assuming the legislature passes and the Governor signs, a FY 2028 budget that includes funding for the foundation formula at the level specified by the State Board, the calculated SAT of $7,145 will NOT be attainable.

At this time, early projections would indicate a paid SAT of approximately $6,750-$6,790 for FY 2028.  This figure is subject to change.  The paid SAT would necessarily be reduced further if actual state funds do not materialize to meet amounts appropriated.  The figure may also fluctuate due to changes in enrollment, attendance, virtual enrollment, charter school local effort payment, or other related factors.  Districts are advised to exhibit caution in making FY2028 budget projections.

Updated information will be provided as it becomes available.

Miscellaneous Finance Topics

Formula Simulation Tool

A formula projection tool has been posted on the School Finance Calculation Tools webpage. A small presentation is included to help clarify the tool's use and needed information.

A version for charter schools has also been posted.

Work with your LEA's School Finance contact regarding any questions you may have concerning the use of the formula projection tool or regarding formula projections.

Preliminary Transfer Amounts

FY 2027 preliminary transfers have been posted. They can be found on the Fund Transfer webpage.

Estimated ADA & AM

If your LEA wishes to estimate your ADA and AM, please review and work with your School Finance contact to adjust numbers after school has started. Estimates must be received prior to close of business on the last day of the month to be used next months payment.  If large changes from prior year numbers are expected please submit estimates three business days prior to the end of the month.

A worksheet to assist districts when estimating their ADA has been updated and is available on the Calculation Tools webpage.

School Calendar Requirements

Missouri statute directs that each school board shall prepare annually a calendar for the school term per Section 171.031.1, RSMo. The school term shall consist of 1,044 hours or 522 hours in session for half-day kindergarten or prekindergarten programs claimed for state aid. 

There is also a requirement to plan weather make-up hours:

• 36 planned make-up hours are required. Per SB 681 which took effect on August 28, 2022. Eighteen (18) planned make-up hours are required for half-day programs.

This also includes weather forgiveness.

• The first 36 (18 for half-day programs) weather hours are made up and then half the amount thereafter up to 48 (24 for half-day programs) hours, for a maximum of 60 (30 for half-day programs) total make-up hours.

Detailed information regarding calendar requirements can be found in the Calendar Guidance Document posted on the School Finance Topics and Procedures webpage.

169-Day School Calendar Incentive Payment

Senate Bill 727 (2024) established additional school calendar provisions that may impact certain local education agencies (LEAs). The legislation created two new provisions:

• 169-Day Calendar Incentive Payment
• 169-Day Calendar Requirements in certain LEA

The common thread of 169 days in each provision may generate some confusion for LEAs. DESE has prepared a guidance document to assist LEAs with implementation of the new provisions.

The 169-Day Incentive Payment for attending 169-Days or more in FY 2025 was paid in January 2026. The funds received must be used to increase teacher salaries in FY 2027.

FY 2026 calendars will be evaluated between June and December 2026, and the preliminary plan is to pay that in January 2027. The increase in funds received in FY 2027 must be used to increase teacher salaries in FY 2028.

Alternative Method of Instruction (AMI)

AMI is an option for LEAs to use when school hours would otherwise be canceled due to exceptional or emergency circumstances. An AMI day would replace a day of regular instruction and would not be considered weather hours or weather make-up hours. The specific rules and requirements regarding AMI requirements and usage can be found in the Calendar Guidance Document posted on the School Finance Topics and Procedures webpage.

Minimum Salary Requirements

Minimum salary for a teacher is FY 2026-27 - $40,000, same as FY 2025-26.

The minimum salary for a full-time teacher with a master's degree with at least ten years public teaching experience will be $47,000, up $1,000 from FY 2025-26.

For information regarding FY 2027-28 salary requirements and details on who is required to be paid minimum salary and penalties for non-compliance can be found Minimum Teachers Salary in the Minimum Teachers Salary guidance  posted on the School Finance Topics and Procedures webpage.

Non-Certificated Educators - Attendance Hours Adjustment

Attendance hours for any educator without a valid teaching certificate will be disallowed for state aid payment purposes. State law requires all school district personnel who are responsible for working with students in an instructional or supervisory capacity during the school day to have a valid Missouri teaching certificate. This applies to in-school suspension teachers as well as those supervising study hall, recess, virtual courses taken in school, or other computer based instructional programs taken in school. A substitute certificate meets the requirement of a certificate when the employee is functioning as a substitute teacher in the absence of the teacher-of-record or is employed as the teacher-of-record, and the individual is required to be paid minimum salary.

A report is available on the Data Collection Web Application system which will identify educators within the district that do not have a valid certificate on file with the Department of Elementary and Secondary Education. To access this report in the Data Collection system, go to the left-hand navigational tree and select Reports, then Special Reports, then Staff Certification.

The Department will prepare a list of educators meeting the following criteria:

• did not hold a valid Missouri educator certificate for the regular school year teaching assignment or;
• has a certificate pending but did not initiate the required background check.

School districts notified they have an educator(s) that met the above criteria must provide School Improvement with the attendance hours by building and grade for all students who were under the supervision of those educators since the educator did not have a valid certificate. These hours of attendance will be excluded from the total hours of attendance for the school year. Also, note that membership is now used to pay state aid. Membership will also be excluded from the total membership count.

If the educator holds a valid certificate but their SSN has been reported incorrectly causing the educator to flag as uncertificated on reports, the educator's SSN in all reporting must be fixed and the reporting recertified to ensure compliance.

Audits

Schedule of Selected Statistics

A copy of the 2025-26 Schedule of Selected Statistics that is to be included in the 2025-26 audit report is available on the School Audit webpage. The district should print and keep a copy as a reference when it reviews the 2025-26 audit report prior to submitting the audit report to DESE to ensure the updated schedule is used by the auditor and included in the report. The district is encouraged to compare the information in the audit on this Schedule to the data the district submitted through MOSIS, Core Data, the Annual Secretary of the Board Report, or other reports and resolve any differences prior to submitting the audit report.

Payment Verification and Audit Confirmation Reports

Instructions on how to obtain verification of 2025-26 revenue received from the State of Missouri can be found on the Payment Verification guidance document posted on the School Finance Topics and Procedures webpage.

FY 2026 Audit Report Submission Via Tiered Monitoring

Detailed instructions on how to upload the Audit report via Tiered Monitoring can be found on the School Audits website under:

• Audit Uploads/Supporting Documentation Upload Instructions
• Audit Upload/Supporting Documentation Upload Instructions (webinar)

School Governance & Transportation

School Bus Aisle Blocking

State Board of Education Rule 5 CSR 30-261.010 requires that school bus aisles not be blocked. As your district makes field trips and activity trips this year, please ensure that all school bus drivers know and adhere to this rule. The aisles must be free of any obstruction so the bus, if needed, could be evacuated quickly without difficulties caused by the aisles being blocked by trash cans, coolers, book bags, band equipment, or other items.

School Bus Driver Seat Belt Use

5 CSR 30-261.010, RSMo (Requirements for the Operation of School Buses), requires school bus drivers to use their seat belt whenever the bus is in motion. Please verify compliance with this requirement within your school district. 

Transportation Ridership List Development

Two ridership lists should be developed during the year for home-to-school-to-home routes, then added together for reporting on the Application for State Transportation Aid. These lists should be created based upon the student’s residence, not bus stop location. The lists should be created over a period of time and are not specifically as one the count day.  Details for each list are as follows:

• The first semester list should be developed by the second Wednesday of October.
  • Includes K-12 students riding on a regular basis (minimum of once per week).
    • Students living more than a mile from school.
    • Students living less than a mile from school.
• The second semester list should be developed by the second Wednesday in February.
  • Includes K-12 students riding on a regular basis (minimum of once per week).
    • Students living more than a mile from school.
    • Students living less than a mile from school.

Important Clarification on 10 Passenger Vans

Per 5 CSR 30-261.045, after July 1, 2001, no LEA can use a vehicle to transport students that have a rated capacity to transport more than ten (10) including the driver unless the vehicle meets the state and federal specifications and safety standards for school buses. Contract common carriers meeting Federal Department of Transportation standards may be used for field trips as outlined in section (3) of this rule.

This applies to newly purchased, newly leased, newly placed into service, newly contracted vehicles, or vehicles replaced under contracted services. In short, unless the vehicle that transports 10 or more was owned by the LEA prior to July 1, 2001, it is in violation of state rule to use it today to transport students unless it is a yellow school bus.

It is important to note that the use of vans that have been converted to and rebadged as 10 passenger vans are not to be used per state statute, state rule, as well as federal provisions. 

The passenger rating of the vehicle must be tied back to the original Vehicle Identification Number, not a rebadging that reduces the rating of the vehicle to 10 passengers.  If you have questions, please contact David Tramel at david.tramel@dese.mo.gov. 

Transportation Document Preparation Manual

School Finance & Governance Contact Information

Please feel free to contact us:

Phone: 573-751-0357     Fax: 573-526-6898 
Email: finadmgov@dese.mo.gov

We have modified our district assigned contacts.

School Governance

School Finance