Reimagine Minnesota Strategy I: Statewide Funding That Ensures - - PowerPoint PPT Presentation

Reimagine Minnesota Strategy I:

• Dr. Dave Webb, Superintendent

Aaron Bushberger, Finance Director

Statewide Funding That Ensures Equity, Access and Opportunity for All Students

Desired Outcomes

• Equitable funding plan for ALL students

and school districts

• Taxpayer equity
• Funding for all mandated programs

Current MN School District Finance Challenges

• 1. Basic educaCon formula lags behind inflaCon
• 2. Special educaCon cross-subsidy
• 3. English Learner (EL) cross-subsidy
• 4. Taxpayer equity
• 5. Regional wage variaCons

Basic Education Formula Lags Behind Inflation

• Between 2003 and 2019, the basic formula has lost ground

to inflaCon.

• Had the allowance increased by the rate of inflaCon each

year since 2003, the 2019 allowance per ADM would be $6,908.

• The difference between the FY 19 Formula Allowance per

ADM and the inflaCon adjusted formula allowance is $596

• r 9.4%.

General Education Formula Allowance 2003-2019 Adjusted for Pupil Weight Change and Inflation (CPI)

$4,966 $4,966 $5,368 $5,530 $5,530 $5,638 $5,831 $6,067 $6,188 $6,312 $4,966 $5,228 $5,569 $5,855 $6,030 $6,311 $6,455 $6,626 $6,767 $6,908 $4,500 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500 2003 2005 2007 2009 2011 2013 2015 2017 2019

Formula Allowance Adjusted for Pupil Weight Change Adjusted for Pupil Weight Change and Inflation (CPI)

* Had the allowance increased by the rate of inflation each year since 2003 the 2019 allowance per ADM would be $6,908. * The difference between the FY 19 formula allowance per ADM and the inflation adjusted formula allowance is $596 or 9.4%

Source: MDE January 2017 Inflation Estimates

Special Education Cross-subsidy

• The state and federal governments have never provided

the funding necessary to serve our special educaCon students.

• School districts are forced to use money meant for

regular classroom instrucCon to make up the difference.

• The statewide special educaCon cross-subsidy is

projected to be $671 million in FY 2017 (State PorCon: $248 million)

Total and State Por-on-(if Fed Funding Covered 40% of Excess Cost), FY 2003 – FY 2021 Current $ (Millions)

Source: Minnesota Department of Educa-on, March 2018

Special Education Cross-subsidy

Total and State Portion – (if Fed Funding Covered 40% of Excess Cost), FY 2003 - FY 2021 Current $ (Millions)

EL Cross-subsidy

• There were 72,335 students who were eligible for English

learner services in Minnesota in the 2016-17 school year.

• Eligibility for English learner services was extended from

6 to 7 years beginning in FY 2017.

• In FY 2017, AMSD members had an $82 million EL cross

subsidy.

Taxpayer Equity

• Minnesota’s educaCon funding system is based on a state and

local partnership to provide the resources and opportuniCes

• ur students need
• Local property taxes provide about 27% of the revenue for

Minnesota school districts

• Districts rely on school levies just to maintain current programs
• r to reduce budget cuts.

Taxpayer Equity (cont.)

• Homeowners who live in comparably valued homes, do not

generate a similar level of funding for their schools for a similar level of property taxes paid.

• Some school districts generate three and four Cmes more than
• ther school districts due to the current tax formula
• Districts with more commercial/industrial property are able to

spread out property taxes and reduce the tax burden on their homeowners.

Prepared by AMSD, November 2017 Data Source: Ehlers – Pay 2017 School Tax Report

Comparative Tax Impact of Referendum Revenue

Tax impact of an Operating Referendum of $1,967 per Adjusted Pupil Unit on a Home with an Estimated Market Value of $200,000, Pay 2017

$569 $916 $647 $604 $715 $749 $1,011 $388 $0 $200 $400 $600 $800 $1,000 $1,200 Burnsville Farmington HasCngs Inver Grove Heights Lakeville Rosemount-AV-Eagan South St Paul West St Paul

Regional Wage Variations

• Unlike many other states, Minnesota’s educaCon

funding system does not account for regional wage variaCons.

• As a result, metro school districts, which face

significantly higher labor costs, are heavily dependent

• n voter-approved operaCng referenda.

Average Teacher Salary Comparison FY 2017-2018

Economic Development Region

• Avg. Teacher Salary

% Under Metro EDR 11 – Seven County $63,272 EDR 7W – Central $56,626

• 10.5%

EDR 3 – Arrowhead $54,493

• 13.9%

EDR 7E – East Central $52,884

• 16.4%

EDR 10 – Southeast $52,276

• 17.4%

EDR 2 – Headwaters $52,000

• 17.8%

EDR 6W – Upper Minnesota Valley $51,604

• 18.4%

EDR 6E – Southwest Central $51,345

• 18.9%

EDR 5 – North Central $51,177

• 19.1%

EDR 4 – West Central $49,780

• 21.3%

EDR 1 – Northwest $49,091

• 22.4%

EDR 9 – South Central $48,981

• 22.6%

EDR 8 – Southwest $46,127

• 27.1%

The South St. Paul Story

Total PreK-12 enrollment = 3,554 students

Ø Special EducaHon students

• Serve 550 students
• PopulaCon has increased by 2.1% over past 10 years

Ø English Learner students

• Serve 187 students
• PopulaCon has decreased by 2.8% over past 10 years

Ø Free/Reduced students

• Serve 1,790 students
• PopulaCon has increased by 12.2% over past 10 years

The South St. Paul Story

Funding Category Amount 2017-18 General Fund Revenue $42.8 million General educaCon funding matches inflaCon $2.1 million Eliminate special educaCon cross subsidy $3.5 million Eliminate EL cross subsidy $0.7 million Improve equalizaCon factors ??? Improve regional wage differences ??? PotenHal addiHonal revenue $6.3 million

The South St. Paul Story

$778.32 $562.13 $567.10 $1,135.69 $1,037.39 $1,220.65 $1,424.17 $1,262.32 $1,348.75 $11.76 $256.87 $354.00 $24.98 $180.61 $35.27 $32.36 $314.63 $415.00 $0 $450 $900 $1,350 $1,800 Farmington Inver Grove Heights South St Paul Rosemount-AV-Eagan Dakota County Average Lakeville West St Paul HasCngs Burnsville

OperaHng Levy Comparison (Dakota County School Districts)

Per Student Levy, 2018-19 : 2017-18 (Blue/Gray) + Change (Orange)

The South St. Paul Story

Ø EqualizaHon Ø CommunicaHons Plan

• Local Leaders
• Staff and Community

§ SixTimes PublicaCon § Social Media

• Legislators
• 3Fs – Facts about Families, Fairness, Funding

The South St. Paul Story

For more informaCon, visit www.sspps.org/stateolhedistrict

Possible Action Steps:

• A. Convene a Reimagine MN Finance team to evaluate

and re-structure statewide school funding to educate all learners

• B. Reduce the need for local levy by indexing state aid

to inflaCon

Possible Action Steps (continued)

• C. Fund what is mandated
• D. Ensure a system with revenue and taxpayer

equity

Potential Related Directions

• Re-evaluate and re-structure statewide school funding
• IdenCfy funding needs and shormalls and strategize ways

to ensure sufficient funding for educaCng all learners

• Build a unified legislaCve plamorm supported by all

advocacy groups and policy stakeholders

• Advocate for an equitable and sufficient school finance

system that enables quality educaCon for all learners

Table Discussion

What is your district’s story?

• What is your district currently doing to engage in this

strategy?

• What are other districts doing that interests you?
• Based on what you heard/learned, what new or addiConal

steps will you take to implement this strategy in your district?