There’s significant interest among rural legislators to look at making the formula more equitable for Greater Minnesota schools. MREA was tasked with finding options to accomplish this.

There are old ideas such as delinking categorical components like compensatory from the basic allowance, but those ideas flame out amidst controversy and they really are zero sum proposals. Instead of hitting replay on old fights, MREA recommends an update to a current model.

Small Schools Revenue (SSR) is an existing nod in the direction of rural equity, albeit an imperfect one. If the state took the SSR concept and made it more viable for more school districts, the state could reduce the current operating inequity. Sen. Minority Leader Tom Bakk introduced SF 87 to do just that. Sen. Majority Leader Paul Gazelka has since signed onto this bill, known as Enhanced Small Schools Revenue.

Another option building off of ESSR is to create a Basic Education Guarantee (BEG) by front loading the first 750 kids in the door of every school district by $275 per pupil. This option costs more, but it extends these funds to all school districts and still has the effect of reducing the overall operating funding inequity.

In addition to closing inequities in operating dollars, there’s still plenty of work to do to create a fairer state share of facility funding. Ag2Schools and improving Debt Service Equalization (DSE) are high priorities as well for any tax cut package that emerges this session.

MREA produced a report outlining these various inequities and a series of proposed solutions. Check our Rural Kids Count Report for a deep dive into these issues and the impact they will have on school districts across Minnesota.


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