The following is an editorial published by the Ely/Tower/Cook Timberjay newspaper. It is reprinted with permission.

The continuing lack of leadership on education in St. Paul has left the state's budget in a near-permanent state of crisis and left many school districts, particularly those in rural Minnesota, with too little money to do the job.

The state takeover of school funding in 2002 was supposed to provide greater funding equality across the state and reduce property taxes at the same time. As it turns out, little of that promise has been realized and the costs to the state have been enormous, about $1.9 billion a biennium in additional funding obligations. Those costs comprise nearly a third of the state's $6.3 billion budget shortfall over the next two years.

The financial burden of the takeover was not lost on most legislators, who indicated at the time that they would follow up on the change by developing a new revenue stream to continue to provide adequate funding in the future. Unfortunately, that sensible commitment ran into an ideological roadblock in the form of Gov. Tim Pawlenty's "no new taxes" pledge, which has kept the state from creating a new funding mechanism for schools.

The result has been an essentially permanent structural deficit in the state's budget, a deficit which has kept funding increases for the state's schools to well below the cost of inflation.

This year, schools are likely to face significant cuts in funding as the state grapples with the latest budget crisis. While the governor and DFLers in the House have proposed budgets that appear to include no cuts in funding, the reality is that payment shifts proposed by both the governor and the House, and additional strings in the governor's plan, will force school districts to incur substantial interest expense. Indeed, it's entirely possible that the state Senate plan, which calls for a seven percent across the board cut, including in education, would yield more actual dollars for schools than the alternatives, since most of the Senate education cuts would be backfilled by federal stimulus money. And because the Senate plan doesn't hold back school funding, it wouldn't force districts to borrow as they would likely have to do under the House or governor's plan.

The impact of any funding plan, however, will vary dramatically from district to district, in part because the state's school funding takeover has seriously exacerbated inequities between districts.

The state's failure to keep school funding current with inflationary pressures has forced districts to turn to operating levies for basic survival. The situation has pushed more and more school funding back onto local property taxes, at least in those districts that are able to pass referenda.

While the state takeover temporarily pushed the state's share of total school funding to 86 percent, that has since fallen back to 76 percent — very close to the share of state funding prior to the takeover. In other words, schools as a whole are nearly as dependent on local property taxes today as they were prior to the funding takeover.

Unfortunately, the way those dollars are divided among districts is more unequal than before. For a variety of reasons, some districts are better able to pass excess levies than others. Some, like the St. Louis County School District, face major impediments to passage, leaving students with second class opportunities.

The Minnesota miracle of the 1970s was supposed to have fixed that kind of inequality. The 2002 funding takeover could have built on that effort, but only with a reliable funding source. That's something St. Paul has been unable to deliver.