Gov. Tim Walz’s budget plan announced today calls for increasing the general education formula by 3 percent in 2020 while driving additional funding for school readiness, special education and school safety.

This comes after school leaders from across the state shared the need for the Governor and Legislature this session to provide predictable and adequate funding for education. The General Education Formula for schools in Minnesota has not kept up with inflation since 2003 when the state’s commitment to fund schools with the General Education Formula went into effect. It is now underfunded nearly $600 per pupil, totaling $525 million annually.

“MREA supports the Governor’s approach and understands as he does that schools and rural education, in particular, depend on the general fund,” MREA Executive Director Fred Nolan said. “We look forward to working the Governor, Legislature, Commissioner Ricker and her staff to close the gaps in education and better assure that a child’s education does not depend on race or zip code.”

Walz led off the announcement sharing that the budget is based on his two years of visiting Minnesotans in their communities. “Minnesotans want three things:  education, health care and community prosperity,” Walz said.

He described his budget as a moral document reflecting the state’s morals and values. “This is the budget that Minnesotans voted for in historic numbers in November,” he said.

He prefaced his education budget with, “Every student deserves to learn in the best schools in the world and with caring teachers.” But he has observed in traveling across the state that “the quality of a student’s education is too often dependent on a child’s race or zip code.”

The result has been an increased dependence on local funding creating greater gaps between wealthy and poor and the metro and Greater Minnesota. “While some schools have stadiums and turf fields, others are struggling with a referendum to fix a leaky roof,” he said.

With that introduction, Walz presented his budget recommendations.

MAJOR EDUCATION PRIORITIES

  • General Education Formula: $523 million
    Increase the general education basic formula by 3 percent in FY 2020 and an additional 2 percent in FY 2021. The per-pupil formula would increase by $189 to $6,501 in FY 2020 and an additional $130 to $6,631 in FY 2021.
  • Jumpstart to School Readiness: $59 million
    Restore the level for participants of Voluntary Pre-Kindergarten (VPK) and School Readiness Plus (SRP) from the current 3,160 (FY 2019) to 7,160 for FY 2020 and later. This will maintain the currently available slots for the eligible school districts.
  • Special Education: $77 million
    Increase special education aid by an amount sufficient to hold the state total cross subsidy per student in average daily membership (ADM) steady at current FY 2019 level of $830 per ADM, and that the increase be allocated through an improved special education aid formula.
    This will be accomplished with the following four specific recommendations:

    • Adding a new cross subsidy reduction aid beginning in FY 2020 that would cover a percent of the prior year’s cross subsidy for each school district. The percentage would increase from 2.16 percent in FY 2020 to 5.42 percent in FY 2021 and then 5.5 percent in FY 2022 and later.
    • Adjusting the growth cap/maximum aid calculation by setting the maximum aid at the greater of the current calculation or the sum of 54.3 percent of current year special education program costs for FY 2020 and FY 2021, or 56.3 percent of current year special education program costs for FY 2022 and later, plus 95 percent of current year special transportation costs, plus the current year tuition adjustment.
    • Adjusting the hold harmless, minimum aid calculation by: (i) reducing the annual inflation adjustment by 0.2 percent per year, from 4.6 percent in FY 2020 to 4.4 percent in FY 2021 to 4.2 percent in FY 2022 to 4.0 percent in FY 2023, until the inflation adjustment reaches 2.0 percent; and (ii) limiting the minimum aid guarantee to the sum of 80 percent in FY 2020, 75 percent in FY 2021 and 70 percent in FY 2022 and later of current year special education program costs plus 100 percent of current year special transportation costs, plus the current year tuition adjustment.
    • Reducing the tuition billing rate paid by the resident district for open enrolled students from 90 percent to 85 percent of the unfunded costs for FY 2020 and to 80 percent for FY 2021 and later. Charter schools would receive additional special education aid from the state to offset the impact of the tuition billing change.
  • School Safety Levy
    Increase school safety levy $9 per pupil per year to $54 in FY 2021

OTHER EDUCATION PRIORITIES

  • Community Schools
    Increase funding for Full Service Community Schools at $2 million per year over four years to allow districts to plan and enter the program over the four years.
  • Centers of Excellence
    Increase funding for Regional Centers of Excellence so they can serve twice the number of school districts.
  • Operating Referendums
    Permit locally-elected school boards to renew expiring operating referendum authority for operating referendums approved by the voters after July 1, 2019. This proposal would require that voters have an opportunity to revoke the board-renewed authority in a reverse referendum, and that the ballot language for the expiring referendum provided notice that the referendum may be renewed by school board resolution.

View the Governor’s Education budget

View Governor Walz presenting the budget

Gov. Walz funds his education and other general funds proposals in part by increasing the gas tax by 20 cents per gallon and continuing the 2 percent medical provider tax.  According to Commissioner Franz, the increase in the gas tax restores $460 million to the General Fund by eliminating the “temporary diversions” of sales tax revenue to transportation. That “temporary diversion” was a signature effort of the GOP controlled legislature this past biennium and will likely be a major issue with the GOP controlled Senate.

Walz’s budget is based a projected $1.5 billion surplus. The state will release its updated economic forecast later this month and current indicators suggest the projected surplus could shrink.

The Legislature must approve a final budget by the end of the legislative session on May 20.

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