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

Reimagine Minnesota Strategy I: Statewide Funding That Ensures Equity, Access and Opportunity for All Students Dr. Dave Webb , Superintendent Aaron Bushberger , Finance Director

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 or 9.4%.

General Education Formula Allowance 2003-2019 Adjusted for Pupil Weight Change and Inflation (CPI) $7,500 $6,908 $7,000 $6,767 $6,626 $6,455 $6,500 $6,311 $6,312 $6,030 $6,188 $6,000 $6,067 $5,855 Source: MDE January 2017 Inflation Estimates $5,831 $5,569 $5,638 $5,500 $5,530 $5,530 $5,228 $5,368 * Had the allowance increased by the rate of inflation each year since 2003 the 2019 allowance per ADM would be $6,908. $4,966 $5,000 * The difference between the FY 19 formula allowance per ADM and $4,966 $4,966 the inflation adjusted formula allowance is $596 or 9.4% $4,500 2003 2005 2007 2009 2011 2013 2015 2017 2019 Formula Allowance Adjusted for Pupil Weight Change Adjusted for Pupil Weight Change and Inflation (CPI)

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)

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

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 our 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 or 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 other 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.

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 West St Paul $388 South St Paul $1,011 Rosemount-AV-Eagan $749 Lakeville $715 Inver Grove Heights $604 Data Source: Ehlers – Pay 2017 School Tax Report HasCngs $647 Prepared by AMSD, November 2017 Farmington $916 Burnsville $569 $0 $200 $400 $600 $800 $1,000 $1,200

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