April 2004Parent Leadership Summit

Education Funding in Minnesota –

How Did We get Here?

Minnesota State Constitution Section 1.”UNIFORM SYSTEM OF PUBLIC

SCHOOLS. The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.”

How Public Schools are Funded

The legislature taxes, funds and regulates;

School boards dispense funds

The Legislative Process

The Minnesota State Legislature works on a biennium basis.

One year for policy and the next for funding.

In its funding session, the Legislature sets the per pupil formula for the next two years.

Major Sources of Revenue for a School District’s Operating Fund

86% State 7.3% Local Levies 3.6% other sources grants fund raising fees 3.1% Federal

The Funding Process

Per pupil formula x AMCPU (adjusted marginal cost pupil units)

District Operating fund (General Fund)

Basic Skills revenue

ELL ($700/pu capped @ 5 years) Compensatory (capped @ $2512/pu) Transportation sparsity funding Special Education funds State $9,800 average/pu Federal $1,100 average/pu

Average General Fund Dollars in Minnesota’s public schools

According to the state’s 2003 Education Finance Task Force report

Minnesota school districts receive $7,615 per pupil

How Did We Get Here?

1. A per pupil formula that has averaged 1.14% increase annually

2. State policies reforming property tax3. The 2001 General Education Buy

Down4. “No New Tax Pledge”

Per Pupil Formula Analysis

Year Formula General Actual Actual Allowance Increase "NEW" $$ % Change

1992-93 3,050$ -$ -$ 0.00%1993-94 3,050$ -$ -$ 0.00%1994-95 3,150$ 100$ -$ 0.00%1995-96 3,205$ 55$ 55$ 1.75%1996-97 3,505$ 300$ -$ 0.00%1997-98 3,581$ 76$ 76$ 2.17%1998-99 3,530$ (51)$ (49)$ -1.37%1999-00 3,740$ 210$ 150$ 4.25%2000-01 3,964$ 224$ 95$ 2.54%2001-02 4,068$ 104$ 104$ 2.62%2002-03 4,601$ 533$ 118$ 2.90%2003-04 4,601$ -$ -$ 0.00%2004-05 4,601$ -$ -$ 0.00%

Total 1,551$ 549$ 14.9%1.14%

Flat per pupil formula

The true per pupil formula grew an average of 1.14% annually

Expenses in districts grew an average of 5% annually

How Did We Get Here?

1. A per pupil formula that has averaged 1.14% increase annually

2. State policies reforming property tax

3. The 2001 General Education Buy Down

4. “No New Tax Pledge”

State policies to reform property taxes

Class rates for taxing businesses were reduced to more closely resemble residential property tax rates

Agricultural and recreational land removed from the equation for school taxes

General Education Fund Buy Down

Annual School Taxes 1997-2002 on a $250,000 Home

$2,643$2,437

$2,069$1,760 $1,772

$793

0

500

1000

1500

2000

2500

3000

1997 1998 1999 2000 2001 2002

How Did We Get Here?

1. A per pupil formula that has averaged 1.14% increase annually

2. State policies reforming property tax3. The 2001 General Education Fund

Buy Down4. “No New Tax Pledge”

General Fund Buy Down

In 2001, the state accepted the liability of funding 85% of

public schools cost Passed half of the legislation—the

liability was accepted, without a revenue stream to support it.

Destabilized the funding source for schools and now makes them reliant on the state’s economy

Change in percent of school revenue from the state

86.30%

72.70%65.80%

60%

1997 1999 2001 2003

How Did We Get Here?

1. A per pupil formula that has averaged 1.14% increase annually

2. State policies reforming property tax3. The 2001 General Education Fund

Buy Down4. “No New Tax Pledge”

The Decade’s Mantra

EXPECT MORE PAY LESS

“No New Tax Pledge” Developed by

the Minnesota Taxpayers League whose website states

“Everybody knows we pay too much in taxes.”-David Strom

“The Taxpayers League has been successful because we take our case to the people of

Minnesota. It is our goal to reach out to and persuade as many Minnesotans as possible”

-David Strom, Legislative Director of the Taxpayers League.

Price of Government

The Price of

Government is the State of Minnesota’s official measure and is factored as total revenue as a percentage of personal income.

17%

16%

15%

1992 2002 2006

Requirements for public schools grew while funding did not

Testing Standards Special education mandates Transportation English Language Learning Days added to the school year Health and safety mandates Physical Education HIV/AIDS Sex Education Drug/Alcohol Abuse Education Bus Safety Title 1 programs

NCLB

No Child Left Behind is possibly the largest unfunded/under-funded mandate the federal government has ever imposed on public schools.

The Office of The Legislative Auditor, State of Minnesota has said: ”Even if student’s math and reading scores improve significantly in coming years…more than 80% of Minnesota elementary schools would not make AYP by 2014...and this could trigger expensive sanctions”—OLA Evaluation Report 2/26/04

The US Department of Education contends that “NCLB is appropriately funded”. Yet in 2004-05, because of formulaic restructuring at the federal level, Minnesota will receive substantially less federal funding. –Eugene Hickock, Undersecretary of USDOE 4/14/04

What the cumulative effects of this decade have meant to

public schools

Less administration—R&D Greater reliance on local levies Fewer Art/Music programs Fewer Gifted/Talented programs Books older than the kids Cutting or charging for transportation Higher fees Larger class sizes Fewer enrichment programs Fewer intervention programs Deferring maintenance to facilities Greater reliance on parent fund raising Greater reliance on the classroom teacher Fewer fund balances; higher cost for districts to borrow money

What was happening with the economy

Between 1995 and 2001 the state of Minnesota and the federal government experienced the largest surpluses ever recorded

Minnesota rose to rank 8th in per capita income of the fifty states

Residents received tax rebate checks in multiple years

Property tax reductions were enacted over multiple years

Business tax rates were reformed

What Do We Need to Do to

Change Where We are Headed?

Know your Facts Schools have had greater expectations

placed on them with flat or decreased funding

Policies that aided property tax reform have destabilized funding for schools

The state took on the liability of providing 85% of the funding for schools without identifying a revenue stream

The “No New Tax Pledge” has created a greater dependence on fees and increased local taxes.

Make the case Taxes are not “out of control”. The State crises wasn’t inherited, it was self–inflicted State funding for K-12 was “protected” only for this year. State funding for K-12 education actually declines for the

next three years, for the first time in the history of the state.

85% of school funding is regulated by the state. You can’t use fees to support these basic services.

Few local reserves are “surplus”. School districts often have to borrow throughout the year.

John Gunyou, Commissioner of Finance for Gov. Carlson and Jay Kiedrowski, Commissioner of Finance for Gov. Perpich

Work for

What you believe in Organize Candidate Forums Work for Representatives that support your

priorities Elect representatives whose judgment and

integrity you trust Help elected officials understand your views Take your candidates and representatives on

tours of your schools Keep public schools in the forefront

start a letter to the editor campaign help parents be a presence at the Capitol

Concentrate on expanding the conversation

Local Chambers of Commerce Early Childhood parents League of Women Voters Seniors Realtors Local Business people Legislators

The Power of the Network

Together we can: provide information provide a speaker or help you be a speaker provide a state view to your local and a

local view to our state network local advocacy groups connect with state-wide advocacy

organizations present a state-wide parent voice for our

public schools

“What the best parents want for their children the

public must want for all children”

--- Dewey