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Repair of special-ed funding gap is missing from omnibus ed bill

MinnPost photo by James Nord
“We would have loved to have included [a cross-subsidy fix]," explained Rep. Paul Marquart, "but what we decided to do is spend dollars in areas where we really know they are going to make the difference, so we started out with early childhood."

They say politics is a cynical business. And yet they also say journalists should shy away from truisms. They have no advice, however, when there’s no adequate synonym for a cliché.

Yesterday the state House of Representatives Education Finance Committee released its proposed omnibus E-12 finance bill, essentially the potential master plan to all spending over the next two years. Lawmakers will do the “walk-through,” the literal plain-English recitation of the contents Wednesday, so a thorough analysis will have to wait.

We can’t sit back, though, without making one jaded observation: One of the worst problems in Minnesota’s badly broken education finance system has gone wholly unmentioned. It’s a problem that has resisted fixing, in part because it’s more politically expedient not to touch it.

It’s spending that districts can’t avoid

Because the state has never come close to fully funding its share of schools’ special-education costs — spending that districts can’t legally avoid or easily cut back on — virtually all Minnesota districts must siphon off a portion of their general per-pupil funding to make up the shortfall.

Over the last decade, this so-called cross-subsidy has mounted to the point where many, many districts divert some 20 percent of their general ed funding. There is widespread agreement that the problem has morphed into a crisis. And, as of a few weeks ago, there is a Legislative Auditor’s report that renders the situation crystal clear.

(And of course a MinnPost special project that looked at what educators are calling “the tipping point,” the effect of the cross-subsidy and of a parallel crisis in students’ unmet mental health needs. Check out particularly the MinnPost data team’s slick interactive map of the cross-subsidy’s impact on individual districts.)

In his modest-nod-to-all-needy-parties budget proposal, Gov. Mark Dayton asked for an increase to general ed funding in the first year and put $125 million toward beginning to pay down the more than $600 million cross-subsidy in the second.

Alas, not only is funding special ed a perennial political loser, the last decade has taught lawmakers that the cross-subsidy is a pretty good hiding place for financial shenanigans.

Fixing it ‘leaves you less to put on the formula’

Now retired, former Roseville DFL Rep. Mindy Greiling explained it thusly: “Lawmakers quickly learn there’s no political profit in addressing the cross-subsidy,” she said. “It leaves you less to put on the formula.” The formula being the bottom-line, annual minimum dollar amount the state reimburses districts for every student.

It’s much more politically expedient for legislators to go home after the session and announce that they secured “new money” for schools, even if the cross-subsidy — and inflation! — mean it’s already spent.

For a long time, school administrators stayed mum. “School districts can’t talk about this,” said Greiling. “If you say there’s plenty of money for the schools but for the cross-subsidy, then you set up a dynamic of ‘why should they get a class size of 12 while my kid is in this overstuffed classroom?’”

Instead of addressing the cross-subsidy, the House proposal would increase the amount of per-pupil general education funding by 2 percent in each year of the biennium. Their likely calculus, according to Capitol wags: They have to raise taxes, so they had better have something to show for it.

On Tuesday, Rep. Paul Marquart, chairman of House Education Finance Committee, explained the decision: “We would have loved to have included that, but what we decided to do is spend dollars in areas where we really know they are going to make the difference, so we started out with early childhood. That was number one. And all-day kindergarten, we’re going to make a huge investment there. And then we thought the rest should be as much as we can put on the formula so all schools get that equally.”

‘It’s not jazzy’

The committee’s ranking Republican, Belle Plaine’s Kelby Woodard, criticized the decision: “They recognize that we need to do something about it and kind of push it off into the next biennium. If it’s something that’s that important, we ought to be putting money towards that. It’s not jazzy. It’s not all-day kindergarten, but it’s important, and it needs to be addressed within our existing resources.”

One final note only a cynic would sound: What irony that a party that came to power after a long decade of simmering voter discontent with school finance shifts is using a shift to try to stay there.

Comments (6)

  1. Submitted by Sean Olsen on 04/10/2013 - 10:24 am.

    A cynic should also point out…

    … that Rep. Woodard’s party is now calling to do all of the following with “existing resources”: close the $627M deficit, pay back the remaining $850M school shift, increase the formula 2% as the DFL proposed, and fix the cross-subsidy issue. If you’re keeping track, that’s about $2B in cuts they would have to make to free up enough “existing resources” to cover all of that. Oh, and they’ve indicated they’re opposed to the DFL-proposed cuts to HHS, so that $2B in cuts would have to come out the the non-HHS, non-K-12 part of the budget, which is about $11B. So, that’s nearly a 20% cut for everything else — higher ed, public safety, veterans programs included.

    Oh, and Rep. Woodard and his party didn’t do anything about the cross-subsidy when they were in the majority.

  2. Submitted by Ray Schoch on 04/10/2013 - 01:26 pm.

    I just want to endorse

    …Sean Olsen’s commentary, especially that last sentence. Republicans are in no position to criticize DFL failures in this area — and they ARE failures — when Republicans had their own opportunity to fix the situation and punted instead.

    Meanwhile, if your child needs special ed services, both of you are getting the shaft, again, from the people who supposedly represent you and your interests in St. Paul.

  3. Submitted by Andrew Kearney on 04/10/2013 - 04:53 pm.

    Special Ed funding

    is driven by two main factors. First, it costs more to provide extra services to students with disabilities. That’s a no-brainer. Second, special education funding is driven by parental veto over services. Schools can’t really say no. (thank goodness most parents are reasonabl) That is one of the four foundational pillars of special education (IEP, LRE and FAPE are the other three). It is federal law and it is bipartisan. Congress passed the law in 1972 and included in the law that the federal share was to be 40%. Jerry Ford thought about vetoing it but instead sent along a signing statement warning that is was a fiscal disaster. He was right. Congress has never funded more than 21% and usually much less. It is estimated that all the new money given to education has gone to special education. No matter which party is in power they never fully fund it and when they are out of power they say they will. This is the other bi-partisan feature of the law. In Minnesota the legislature memorializes Congress to pay their fair share but then they do the same thing as the DFL is doing now and the R’s did before them-screw the LEA’s. Charters btw just bill their local district for their costs and so do not care how much they spend. None of this will change until Congress decides that schools can be trusted to run the special education programs without parental veto. This law is exhibit #1 in why the American Experiment isn’t the best way to run a railroad.

  4. Submitted by Joe Musich on 04/10/2013 - 07:54 pm.

    as long as the focus is on…

    the failures of teachers and their schools the question will be asked,” why give more money?” I would ask that the reporting of what is happening with teaching successes, teacher concerns , and teacher empowerment levels in public education be given more attention. And I don’t mean charter schools or alternative teaching. I mean coverage of the individual who is or who has been in it for the long haul. Currently public school classroom teachers are not the topic dejour.

  5. Submitted by Tom Anderson on 04/10/2013 - 09:56 pm.

    What if

    The State Attorney General sued the Federal government for not providing the 40% it promised. Perhaps getting the other 49 AGs to sign on might help the case…

  6. Submitted by Joe Nathan on 04/12/2013 - 01:01 am.

    Special ed costs

    Suing Congress to provide the promised amount is a good idea.

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