Student Opportunity Gaps

Funding

By September 9, 2013 No Comments

The significant policy change enacted by the 2013 Legislature was to permit School Board’s Levy Authority on Referendum Market Value (RMV). Prior to 2013, school boards could levy on Adjusted Net Tax Capacity (ANTC) with Health and Safety levy, with approval from MDE, and the 40 largest school districts with Alternate Financing for facility maintenance. RMV is primarily homes, farmsteads with one acre and garage and commercial weighting the same as homes. ANTC is all property. Commercial property is weighted significantly more than homes, and production ag land is weighted less than homes in ANTC.

Where we stand?

All school boards can levy $300 per pupil on RMV for five years, whether or not the voters have approved $300.  School Boards need to weigh the advantages and disadvantages of such action. The first $300 of levy is equalized at $880,000 per pupil. That is a large increase from the previous first tier equalization.  This way, districts which already have a referendum in excess of $300 and who do not ask their voters for an increase this fall will see a decrease in homeowner property taxes. That is why the Senate Tax Committee, Chaired by Senator Rod Skoe, proposed this as a form of property tax relief.

How does this affect you?

School Districts with 2,000 students or more outside the seven county Twin Cities can levy a Location Equity Index (LEI) for an additional $212 on RMV.  School Districts within the seven county Twin Cities metro can levy $424.  This LEI does lower the district’s levy.  This allows districts to go to voters to replace this $424 or $212 with voter approved levy.  The long term effect will be a greater metro-rural gap in per pupil funding.

The LEI creates a “donut hole,” of districts that are between Small Schools Revenue (SSR) and 2,000 students.  This donut hole actually starts at 600 students because $212 X 600 generates $2,000 more than the SSR formula for 600 students. And this gap grows as districts get closer to 1,000 students.

Other funding issues include:

  • Facilities and capital funding
  • Teacher quality funding issues
  • Other new mandates (Bullying prevention and Teacher Evaluation)

Where do we go from here?

In educational funding, on what questions should MREA focus for the benefit of Greater Minnesota’s young children?

  • What are the implications on equity in the wake of the new board authority and LER?
  • How do we best address the “donut hole” left by LER and SSR?
  • How do we best address the metro vs. rural disparity in funding given the implications of LER?
  • What is our response to the capital and facilities needs of Greater Minnesota school districts?
  • Is the broadband access adequate for your schools and parents now? In near future?
  • How intense is your interest in energy efficiency projects (HF 320)?
  • Do you have cost estimates for teacher evaluation and bullying prevention?
  • Is it time to make Q Comp state-wide, focused on evaluation and professional growth?
  • Preventing additional unfunded mandates that may come from any of the task forces including the Special Education Case Load Task Force.