Student Opportunity Gaps

School Facilities Financing Work Identifies Inequity

By September 8, 2013 No Comments

 By Sam Walseth, MREA Lobbyist

The 2013 E-12 bill called on the Minnesota Department of Education to pull together a work group to look at current school facility financing programs. At the first meeting in late August, the work group reviewed the state of the current programs, identified inequity in funding, and outlined a series of issues to consider.

Tom Melcher,  director of school finance at MDE, walked the group through the variety of school facility revenue programs that include debt service, alternative facilities, deferred maintenance, health and safety, building lease and operating capital. Commissioner Cassellius shared she views this work group’s charge as unfinished business from the 2013 budget bill.

The Commissioner is right. While most of the December 2012 Education Finance Reform Task Force recommendations became law, an update to school facilities financing was one recommendation that didn’t make it across the finish line.

Inequity & Issues

It’s assumed that the 25 districts that qualify for the Alternative Facilities program have significantly more resources, albeit local resources, to spend on facility maintenance than everyone else. Melcher’s presentation quantified this difference by showing how much is spent per square foot between the two categories of districts. The 25 Alternative Facilities districts spend an average of $2.79/square foot compared to an average for everyone else of $0.58/square foot.

The work group identified several issues including:

  • Decline in state share of debt service revenue
  • Disparity in access to deferred maintenance revenue
  • Decline in inflation-adjusted operating capital budget
  • Disparity in capital project/technology reveue
  • Health & Safety funding; excessive paperwork and significant underfunded costs


The Review and Comment process was another topic the work group brought up.  Melcher noted that 20+ years ago the state was concerned about allowing small districts to go forward with building projects when it made more sense for them to consolidate. He said that tenor seems to have diminished since that time as 600+ districts have become 300+.

Work group members seemed to agree with the principal that districts should have to seek voter approval for new buildings, but once built that local boards should be trusted to maintain those buildings, especially since most of these funds are local property tax dollars.

The work group meets once a month and will submit a final report to the legislature next January. Sen. LeRoy Stumpf (DFL Thief River Falls) authored the amendment that created this work group and attended the first meeting. It was noted that freshman House DFLer Yvonne Selcer (Eden Prairie) may join the work group as well.