Student Opportunity Gaps

Simplifying Operation Revenue Formulas and Student Calculations

By April 4, 2013 No Comments

By Fred Nolan, MREA Executive Director

Both open enrollment and districts’ reliance on voter approved referendums are aspects of Minnesota’s education that have grown exponentially over the past 20 years.  The Finance Working Group recommends a simplification to integrate these two systems and allow districts to receive voter approved referendum revenue based on the students they serve starting in FY ’15.  This recommendation is included in the “Governor’s bills” HF 630 (page 19) and SF 453.

In current law, districts referendum amounts and the cap of $1,845 is defined by resident students.  Over time, two adjustments in law have been made to that. One addresses the state aid associated with operating referendum and the other is a formula addressing the 39 districts which have over 20 percent open enrolled students who are not virtual students.  Both direct revenue to the serving districts.

What’s Proposed

The recommendation proposes a “freeze frame” button for FY ’15 and then a “play” button for FY ’16 and beyond.

The “freeze frame” button in FY ’15 takes the referendum revenue districts get with the current law adjustments and for each district divides that total revenue by new adjusted pupil units served (see article on pupil unit weightings).  That resulting number is now the voter approved per pupil allowance.

The total dollars the district receives in FY ’15 is the same under current law and under the new calculation.  In general, districts that are net gainers in open enrollment will see a decrease in their referendum per pupil $ amount, and districts who are losers in open enrollment will see an increase in their referendum $ amount.

To keep everything else the same, the “cap” will be individualized by district up or down from $1825 based on open enrollment.  Also the ballot language that says “this is not a tax increase” will apply to renewals at the new referendum amount.

The “play” button beginning in FY ’16 uses this new referendum allowance (levy and aid) per pupil for all pupils served by the district with no further adjustments.  It doesn’t matter where the students live. Districts get the referendum allowance approved by their voters for all students served.


This does simplify the formula, which is the stated goal of the Working Group.  Philosophically, the recommendation puts educating students at the core of the formula, because the revenue raised is based on number of students actually served.  The revenue does not “follow the students” because the revenue raised is based on the voter approved amount in the serving district.

This recommendation does highlight a fundamental contradiction in Minnesota’s education system.  State policy allows parents and students to choose the district in which to be educated, but state policy and practice rely on local voters voting to tax themselves, and other residents and businesses, to educate, presumably, the youth of their school district.

At this time, MREA has no position on this recommendation.  The MREA Board of Directors will meet April 22-23 and may take a position.  Should you have an opinion, click the link to the Board of Directors and email Directors in your Zone.

Mapping the Issue

To see the current distribution of open enrollment students see the map of open enrollment.  This is a snapshot in time, not a predictor of future revenues.  Remember there will be a freeze frame in FY ’15. Starting in 2015-16, annual referendum revenue under the recommendation will go up or down depending upon district enrollment changes as compared to the previous school year, regardless of where any of the students live.