The education plans proposed by the Minnesota House, Senate, and Governor do nothing to reduce the decline in the formula allowance, although the Governor’s proposal alone comes close to keeping pace with inflation. The House proposal, in contrast, loses over $100 to inflation in just two years. North Star Institute released an analysis.
Over the past 15 years, the reduction in the formula allowance since FY 2003 has contributed to perennially tight school budgets and significant property tax hikes, as school districts attempt to replace a portion of the decline.
While the per pupil formula allowance has never declined in nominal dollars, it failed to keep pace with inflation during the decade following the state takeover of general education costs in FY 2003. In constant FY 2017 dollars, the formula allowance fell from $6,949 in FY 2003 to $5,504 in FY 2014—a decline of over $1,400 (20.8 percent).