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Education-funding overhaul plan OK’d by task force

The biggest structural fix in the package is the proposed shift of $300 of the property taxes Minnesotans now pay to their districts from a local levy to a state one.

Anyone seeking to understand the state's education funding formula has to master the "runs."
MinnPost photo by Beth Hawkins

An hour into Tuesday’s meeting of the panel tasked with overhauling the state’s education finance system, Tom Melcher paused to draw breath. “Any questions?” he asked.

There were none, just some sardonic chuckling. Where would anyone in his audience even begin to formulate a question?  

The head bean counter at the Minnesota Department of Education (MDE), Melcher was leading the 27 members of the state Education Finance Working Group through the “runs,” literally reams of tiny type projecting, down to the dollar, how the panel’s recommendations would play out.

Melcher is a legend in fiscal policy circles, known for his ability to find structural fixes that seemingly translate into more money in practice. A rumor that he may announce his retirement in coming months last week caused one education advocate to gasp, “That’s like losing Gandolf!”

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MDE officials were circulating, handing out documents from stacks behind him that were still a couple of feet deep an hour and 15 minutes into the meeting. A few minutes later, many of those in attendance had given up trying to follow along and were tweeting one another.

“I was keeping up nicely until they handed out report number six,” Minnesota Public Radio’s Tim Post quipped.

“You know you’re deep in the weeds when property-tax details get the big laughs,” added Julie Blaha, president of Education Minnesota’s Anoka-Hennepin unit.

Meeting since June

The task force’s members have been meeting since June and had deliberately not asked Melcher for the runs. Their reasoning: It was better to craft a policy prescription that made sense and then let the resident wizard do his thing.

The presentation’s fat and sassy bottom line, which the task force promptly voted to approve: Schools could see a 7 percent increase in funding in the next four to six years without too much taxpayer pain. State education spending would rise from $9 billion a year to $9.7 billion by fiscal year 2019 at the latest with revenue increasing 1.2 percent to 1.7 percent a year.

The biggest structural fix in the package is the proposed shift of $300 of the property taxes Minnesotans now pay to their districts from a local levy to a state one, a smoother, more progressive tax. The money would go into the general education formula, which would be restored to its fiscal year 2003 level, adjusted for inflation.

The second-biggest item: State aid for special ed services, lagging some $600 million behind their actual cost, would rise by $150 million to $200 million.  

Increased per-pupil aid

A list literally pages long of pots of money earmarked for everything from ice arenas and trees would be collapsed into a much smaller number of fatter revenue streams that would increase state per-pupil-unit aid from $5,224 to $6,300. (Depending on their age and other factors, individual Minnesota schoolchildren are funded as weighted “units” that would range from .5 to 1.2.)

The formula would direct more resources toward disadvantaged kids,  with the poorest guaranteed all-day kindergarten. Integration revenue would also be distributed differently, with funding following students of color and stricter rules about its uses.

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When Melcher stopped narrating at the 90-minute mark there were questions, all of which essentially amounted to: What happens if we — or the legislators who are likely to wrestle with this and other tax-reform proposals Gov. Mark Dayton is expected to put forth in the upcoming session — don’t like a particular line item on a particular page?

To each, Melcher game the same answer: Wins and losses are very carefully offset if the whole package is adopted. Start knocking out lines and you are playing fiscal Jenga. “It gets real tippy real quick,” Blaha summarized in a final tweet.

What happens when the “runs” get run at the Capitol, by people whose constituents are thinking of their wallets? Good question. At least Gandolf has a couple of months to come up with a spell that renders everything but the grand design invisible.