Student Opportunity Gaps

Fixing the “Donut Hole” Inequity: Advocacy 101

By October 19, 2013 No Comments

By Sam Walseth, MREA Lobbyist

School officials from around Greater Minnesota are fast becoming familiar with the term “donut hole” and what it means for 132 districts and their 147,000 students in this state. For those who aren’t yet aware, the “donut hole” makes up about a third of the state’s districts who don’t qualify for either the Small Schools Revenue program created in 2011 or the Location Equity Revenue program created this last session in the 2013 Tax bill. Leaders in these districts are frustrated with legislative action that has left them out of funding opportunities made available to everyone else for no good reason.

Leaders in 24 of the donut hole districts from A (Albany) to Z (Zumbrota-Mazeppa) gathered for a morning meeting on Oct. 8 at the MASA conference in Duluth. MASA provided MREA the space and time to meet with these superintendents to talk about the politics, policy and process surrounding this inequity and to begin devising a strategy to get the legislature to fix it as soon as possible.

The first step in any legislative advocacy effort is getting organized and we took that first step in Duluth. View a list of the districts present at the meeting and the legislators who represent them.

A Broad Coalition

The next step is to grow this list and to reach more legislative districts to build as broad of a coalition as we can. One dilemma we face right off the bat is that metro legislators aren’t impacted by this inequity so this will be a Greater Minnesota coalition of legislators and we need legislators from both sides of the aisle to grow our strength. The initial list of affected legislative seats shows a good bi-partisan distribution, but the list needs to grow.
While sheer numbers of affected legislative seats is important, it’s especially important to get newly elected rural DFL members on the list. DFL majority leadership in St. Paul has to take care of the vulnerable members and find solutions for them so they don’t get hammered in their re-election bids a year from now.

Likewise, finding GOP districts that have some districts in the donut hole and some out of it by either qualifying for LER or SSR is important. These legislators don’t want to have to explain to their constituents why some of their schools got help and some didn’t. They can certainly blame the DFL since they’re in the minority when LER passed, but it’s still a tough story to tell and most will be motivated to avoid it by helping to find a solution.

Most will be motivated to help, but we will find several members who want to play politics with the issue as we go forward. One come back to this is that he GOP majorities in the legislature created SSR in 2011, so they have both been a part of created this inequity.

Next Step

That leads us to the next step and the more difficult one: Identifying a solution, especially one that has a political chance. Obviously, state aid like SSR is always nice, but paying $212/pupil for these 147,000 students would cost over $30 million in the last year of the biennium and over twice that in the “tails.”

LER is primarily local levy money that is simply converted from voter approved to school board approved revenue. The state does equalize the LER levy so there is some state aid attached to it. How much state aid is needed to equalize another 132 districts converting $212/pupil into board approved levy is a key question and one we need state assistance with.

MREA is working with legislators to get permission to use staff time to run an analysis of how much this will cost the state. Even if that amount is modest, which in E-12 terms is less than $10 million, that is still a significant amount of funding in what will be a non-budget session when they return on February 25, 2014.


There are calls from many corners of the state, from both sides of the aisle, asking to repeal some of the new business-to-business tax increases from the new tax bill. Eliminating the warehouse sales tax would cost $82.4 million in the second fiscal year of the biennium.

There is a major push in the works form a large coalition of disability advocates wanting a 5% increase in the reimbursement to group homes who were left out in last session’s HHS bill. That ask comes with an estimated $86 million price tag. And don’t forget that the next $230 million in surplus revenue to the state is already statutorily obligated to repay the remaining school property tax recognition shift.

Where We Stand

This will not be easy. Getting the legislature do something never is. This may take more than one session to fix. However, we begin work on finding a fix today.

If you’re in the donut hole, talk to your House and Senate members about this issue sooner rather than later and why it’s important to your students that their district participate in the LER program. Be cognizant of not being a complainer, especially toward those legislators who just took tough votes on a tax bill that paid for all day K, money on the formula, special education, equalization on the first $300 of referendum revenue and more. 2013 was the best year for public education in a long time and we have a lot of “thank yous” that need to be said as we ask for help.

Please keep MREA posted on conversations you have with your legislators. It’s important for you to use us to help organize this campaign moving forward. Keeping us in the loop on who wants to help and who doesn’t will make us more effective in our advocacy efforts in St. Paul.

Get more information on the donut hole and a visual map of the donut hole districts in Minnesota.