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TRI-STATES -- A decision by the Missouri General assembly is getting some mixed reviews from school districts all over the state. Earlier this year, Governor Jay Nixon warned schools that due to declining state revenue, Missouri wouldn't have enough money to make $43 million in scheduled midyear payments to school districts.

The Department of Elementary and Secondary Education anticipated two percent cuts to all 523 school districts across the board.

But the House and Senate have voted to exempt about 150 districts, called hold harmless districts -- those are districts that did not benefit from an increase in state aid under the funding formula passed in 2005.  That designation basically means a district receives more revenue locally from higher tax assessments or property taxes than from the state funding formula.

There are about ten Northeast Missouri school districts that fall into that category.  They include:  Adair County R-1 , Audrain Community R-6 ( Laddonia), Clark Revere C-3, Luray 33, Monroe County Middle Grove C-1, Monroe City R-1, Paris R-2, Pike Boncl R-10, Scotland Gorin R-3, North Shelby

Here's a complete list of them from the Missouri Department of Elementary and Secondary Education:  http://www.dese.mo.gov/divspeced/Finance/documents/PPFSupportingFY10.pdf

But while some districts will avoid this round of cuts, others will end up paying more than their anticipated two percent share.

I talked with two Northeast Missouri superintendents on both sides of the issue.

Monroe City School Superintendent Jim Masters has spent much of his time these days trying to find places to cut his budget to make up for state cuts.  He says his district is barely on the edge of being considered a hold harmless school district, but says the news that Monroe City dodged this round of cuts came as a relief.

Masters said, "It's a breath. At least for districts that are held harmless, there is $40 thousand in revenues that were going to be taken away but now they're back. It allows us to catch a breath of air."

The hold harmless designation means Monroe City is sheltered from these mid year cuts, but that's not the case for many neighboring school districts like the Palmyra School District.

Sheltering a quarter of Missouri's schools from the two percent across the board cuts, means fewer districts will pick up a larger percent of the tab.

Palmyra Superintendent Eric Churchwell says now instead of losing two percent of his state funding from this current school year, his loss is more like five percent at around $127 thousand. He says it's a tough pill to swallow.

Churchwell said, "It just depends what side of the fence you are on."

But what's more -- the cuts are just beginning. The state warns of education cuts of four to six percent for the upcoming school year, percentages which could get even bigger by the time the dust settles on the Missouri budget chopping block.

"The biggest problem we're having is the unknown. We have to plan for the worst case scenario and look at all of our programs."

In Palmyra the worst case scenario means planning for possibly a ten percent cut in funding. That could add to up to a $350 to 400 thousand loss for the upcoming school year. Churchwell says those figures mean examining costs across the board...from not replacing retiring teachers, to freezing salaries and capping insurance.

It's the same story in Monroe City. Masters says he's looking at trimming the budget anywhere and everywhere possible...to prepare for the worst.

We're trying to hunker down to weather this and trying to figure out how to position our district to be in a good situation when this finally works its way out."