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Minnesota education advocates applaud Senate funding approach

Under the Senate education proposal, “there are no losers this biennium,” said one observer.

The loudest applause was directed at LeRoy Stumpf, the Plummer senator who proposed the central plank of a package that would move Minnesota toward a more equitable and stable system of school finance.
MinnPost photo by James Nord

Advocates of public education have been offered any number of partial loaves since the Legislature convened in January. And, much like the best teachers, they have been careful to sandwich their disappointments between positive, grateful remarks.

Thursday morning, when the Senate DFL released the details of its proposed E-12 education budget, there was authentic cheering at long last.

The loudest applause was directed at LeRoy Stumpf, the Plummer senator who proposed the central plank of a package that would move Minnesota toward a more equitable and stable system of school finance.

The bill cleared committee late Thursday night, after many policy-watchers had gone home. There was plenty of optimism about the package from the start, however.  

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“In the back and forth between what’s optimal and what’s realistic, I would say what’s right for Minnesota won out,” said Libby Kantner, political director of the Service Employees’ International Union Local 284.

Like other Capitol education watchers, Kantner is disappointed that there isn’t a larger increase in overall education funding in the plan, which would add $356 million in new state aid, versus $550 million in the House plan. But under the Senate proposal, “there are no losers this biennium,” she said.

In contrast to the House proposal, released earlier in the week to a golf clap, the Senate package is much closer to the budget put forth by Gov. Mark Dayton, who is seeking about $340 million in additional education dollars. It goes a step further by proposing some long-sought structural fixes.

No surprise, then, that the Senate version generated less bipartisan support. At the same time, it has less of the politically expedient “bling” that has advocates grumbling about its House companion.

Like the House, the measure would virtually fully fund all-day kindergarten statewide.

Also on both lists: The replacement of the high-school exit GRAD tests with a set of college- and career-readiness regimes that start in middle school (doubtless state Education Commissioner Brenda Cassellius is personally saluting this one) and funding for the new system; and the full funding of a reformed system for underwriting integration efforts.

The Senate would meet Dayton’s request for $44 million for early childhood education scholarships, vs. $56 million proposed by the House and the $180 million it would cost to fully eliminate the waiting list of families in need of pre-K assistance.

Sen. Sean Nienow, the lead Republican on the education committee, criticized the early-education funding as over-prescriptive and said his colleagues wouldn’t support the legislation.

“The Republicans, I think, would prefer to see local control rather than state mandates,” Nienow said. “Let the schools have that money. If they want all-day K – great. If they need it to fulfill other needs in their district – wonderful. Local control is better than state mandates.”

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torres ray
MinnPost photo by James Nord
Sen. Patricia Torres-Ray heads up education policy in the Senate.

The proposal also aims to add accountability to some of the funding streams. Sen. Patricia Torres-Ray, DFL-Minneapolis, who heads up education policy in the Senate, said struggling districts could lose 20 percent of their integration revenue if they don’t demonstrate to the state Department of Education that they’re making progress on student achievement in math, literacy and writing.

“We want to make sure that we provide some accountability to those additional dollars,” Torres-Ray said.

That’s one area that Nienow praised. “They did make a completely unaccountable program a little more accountable,” he said amid criticism of the overall proposal.

MinnPost photo by James Nord
Faint praise from GOP Sen. Sean Nienow: “They did make a completely unaccountable program a little more accountable.”

The Senate provides for Safe Schools money that would go both to making buildings — particularly those that serve the most challenged populations — physically safer spaces and to paying for anti-bullying activities contemplated by both houses in separate bills.

And the upper chamber directs $9 million toward the repayment of the special-education cross-subsidy, the portion of all districts’ per-pupil state aid that must now be siphoned off first thing and diverted to make up the shortfall between the cost of legally mandated services and lagging state reimbursement.

The nod is symbolic financially but enormous in terms of honest policymaking. At the moment, the cross-subsidy exceeds $600 million statewide, so the money won’t go far. But given that this least understood of funding shifts has been used to camouflage much of the funding cuts of the last decade, its appearance as a line in a marquee bill is big indeed.

MinnPost photo by James Nord
Education Finance Committee Chairman Chuck Wiger explained why the Senate hadn’t tackled more of the cross-subsidy.

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“We didn’t have enough for that,” Education Finance Committee Chairman Chuck Wiger said when asked why the Senate hadn’t tackled more of the cross-subsidy. “We do some other things on special ed as well as that [the governor] has recommended,” including paperwork reduction.

The most surprising element of the Senate package is also the hardest to explain. Stumpf’s provision would create a uniform, statewide general education levy but would actually use it to raise very little money. At the same time, another provision directing $150 million to property tax relief would put money back in the hands of homeowners.

The legal mechanisms by which this would occur are devilishly complicated, but the effect is simple. Imagine the general education levy as a new kitchen faucet that can be turned on incrementally as water becomes available. The property tax relief in essence frees up ratepayers from subsidizing other shortages in the state budget to compensate.

Under this measure, “the runs” — the spreadsheet of local level winners and losers that bedevils elected officials back home — become irrelevant. In practice, individual and business property owners will pay the same amount; the way it’s parceled out once it’s collected will change.

For school districts, this shift is supremely important. Without the statewide levy — gone since 2003 in the official end of the Minnesota Miracle — they now are forced to go to voters for local levies. This has created massive disparities between haves and have-nots. And as property taxes increasingly made up for shortfalls in other arenas, it’s become tougher and tougher to ask voters to assess themselves further to pay schools’ bills.

Finally, a levy is predictable; it’s there in prosperous times and thin ones. By contrast, funding schools from Minnesota’s general fund makes them dependent on whether the economy has left state coffers flush.

A wholesale return to a general education levy was at the center of a state task force’s late 2012 recommendations to the governor and Legislature, but the aforementioned runs loomed problematic even as the proposal was being birthed. Start tinkering with the carefully balanced line items, the panel’s financial expert opined, and you’re playing fiscal Jenga.

Most districts would be net winners, and those that weren’t would see tiny tax hikes. But the worst of the pain would be clustered in the Twin Cities’ western suburbs — newly acquired pockets of DFL support the party would just as soon keep.

“I think you’ll see a lot of happy property owners across the state because they should get a nice reduction in their statements,” Stumpf told reporters on Thursday. “In a sense, this bill, with the general education levy, does narrow that disparity between the districts that spend more and those districts that have less to spend.”

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Educators aren’t crazy about the fact that money they’d prefer to be spending is going instead to property tax relief, but they see the beauty of the balance, said Kantner: “There are no losers this biennium.”