Parents United

1
Parents United

• The Funding of our Public Schools
• www.parentsunited.org

2
Minnesota State Constitution

• Section 1.UNIFORM SYSTEM OF PUBLIC SCHOOLS.
  The stability of a republican form of government
  depending mainly upon the intelligence of the
  people, it is the duty of the legislature to
  establish a general and uniform system of public
  schools. The legislature shall make such
  provisions by taxation or otherwise as will
  secure a thorough and efficient system of public
  schools throughout the state.

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How Public Schools are Funded

• The legislature taxes, funds and regulates
• School boards dispense funds

4
The Legislative Process

• The Minnesota State Legislature works on a
  biennium basis.
• One year for policy and the next for funding.
• In its funding session, the Legislature sets the
  per pupil formula for the next two years.

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The Funding Process

• Per pupil formula
• x AMCPU (adjusted marginal cost pupil units)
• District Operating fund (General Fund)

6
How Did We Get Where We Are?

• 1. A per pupil formula that has averaged 1.14
  increase annually
• 2. State policies reforming property tax
• 3. The 2001 General Education Buy Down

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Per Pupil Formula Analysis prior to 2005 session
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Flat per pupil formula

• The true per pupil formula grew an average of
  1.14 annually
• As in all labor intensive sectors i.e. health
  care and education, expenses grew an average of
  5 annually

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How Did We Get Where We Are?

• 1. A per pupil formula that has averaged 1.14
  increase annually
• 2. State policies reforming property tax
• 3. The 2001 General Education Buy Down

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State policies to reform property taxes

• Class rates for taxing businesses were reduced to
  more closely resemble residential property tax
  rates
• Agricultural and recreational land removed from
  the equation for school taxes
• General Education Fund Buy Down

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Annual School Taxes 1997-2002 on a 250,000 Home
12
How Did We Get Where We Are?

• 1. A per pupil formula that has averaged 1.14
  increase annually
• 2. State policies reforming property tax
• 3. The 2001 General Education Fund Buy Down

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General Fund Buy Down

• In 2001, the state accepted the liability of
  funding 85 of
• public schools cost
• Passed half of the legislationthe liability was
  accepted, without a revenue stream to support it.
• Destabilized the funding source for schools and
  now makes them reliant on the states economy

14
Change in percent of school

revenue from
the state
15
Price of Government

• The Price of Government is the State of
  Minnesotas official measure and is factored as
  total revenue as a percentage of personal income.

16
What was happening with the economy?

• Between 1995 and 2001 the state of Minnesota and
  the federal government experienced the largest
  surpluses ever recorded
• Minnesota rose to rank 8th in per capita income
  of the fifty states
• Residents received tax rebate checks in multiple
  years
• Property tax reductions were enacted over
  multiple years
• Business tax rates were reformed

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Requirements for public schools grew while
funding did not

• Testing
• Standards
• Special education mandates
• Transportation
• English Language Learning
• Days added to the school year
• Health and safety mandates
• Physical Education
• HIV/AIDS Sex Education
• Drug/Alcohol Abuse Education
• Bus Safety
• Title 1 programs
• 100 Rule

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The 90s

• Growth Increases
• Expectations Increase
• Costs Increase

Income tax reductions Property tax
reductions Business tax rate reductions
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2005 Legislative Session

• Largest increase in K-12 in 14 years
• Schools needed 5/5--received 4/4
• Continued use of cross subsidy dollars
• Early childhood increases to 2003 figures
• Increased local prop tax by 139 million
• Used 95 million in tax shifts
• Used Cigarette taxes

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Per Pupil Formula Analysis after 2005 session
21

• So why
• should any of this
• matter to us?

22
Minnesota Future Labor Force
23
The Boom Generation Turning 65 in 2011 More 65
Than School Age by 2020
24
Minnesotas Populations Of Color Are Much Younger
25
Change In Minnesota School Enrollments 1999-00
to 2004-05 By Language Spoken At Home
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Special Education

• In the mid 1970s, the federal government
  mandated special education services. They were to
  have paid 40 of the cost of those services. They
  have never paid more than 18.
• In 2005, the state auditors report on public
  school costs showed that the greatest increases
  in school budgets were for special education.

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What do we need to do?

• Define the cost of educating a child in the state
  of Minnesota.
• Define the cost of educating that child if they
  have special needs, need English language
  learning support or qualify for free and reduced
  lunch
• Study different funding formula models that may
  be used.

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Funding Study

• 2003 Funding Study commissioned
• Significant findings made public in 2004
• Those schools with higher concentrations of
  children who are English language learners,
  qualify for free and reduced lunch and/or have
  special needs have higher costs.
• Student access to quality local public schools
  should not be dependent on the property wealth of
  their district.
• Today Education groups are having the study
  completed

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Andbe part of the conversation

• How should schools be funded?
• Taxes?
• Casinos?
• Sin taxes?
• Should schools themselves be revenue generators?
• Vouchers/Tax Credits
• Who should fund schools?
• What should the states responsibility be?
• What should the local taxpayers responsibility
  be?
• Should philanthropy be used and to what extent?

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• What the best and wisest parent wants for his
  own child, that must the community want for all
  children
• ---John Dewey

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• Addendum slides

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State and Local Taxes plus Government fees and
Charges

• Rank State
  of
  personal income
• 1 Alaska 26.4
• 2 Wyoming 20.0
• 3 Delaware 17.9
• 4 New York 17.5
• 5 Louisiana 17.5
• 6 Maine 17.3
• 7 Utah 17.3
• 8 New Mexico 17.1
• 9 North Dakota 17.0
• 10 Mississippi 16.8
• 11 West Virginia 16.6
• 12 Minnesota 16.5

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Minnesota Taxes in Context

• Minnesota is a big government state if you
  measure it by taxes alone. But it collects less
  revenue than other states from user charges (such
  as tolls, tuition and permit fees) and from
  federal transfers. Add all sources of revenue
  together, adjust them for the states population
  and per capita income and Minnesota is about
  average among the 50 states.
• federal transfers are funding provided by the
  federal government to the state for projects
  such as Medicaid and transportation
• Source Minnesota Budget Project
  Star Tribune

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State and Local Taxes plus government fees and
federal transfers

• Rank State of
  personal income
• 1
  Alaska 34.1
• 2
  Wyoming 28.4
• 3
  West Virginia 26.6
• 4
  New Mexico 25.4
• 5
  North Dakota 25.4
• 6
  New York 25.1
• 7
  Mississippi 25.0
• 8
  Montana 24.5
• 9
  Louisiana 24.4
• 10
  Nebraska 24.3
• 11
  South Carolina 24.2
• 12
  Utah 24.1
• 13
  Oregon 23.3
• 14
  Delaware 23.0
• 15
  Vermont 22.4
• 16
  Maine 22.5
• 17
  Ohio
  22.1
• 18
  Alabama 22.0