The ABCs of Dayton’s plan

A look at how the governor’s proposed budget would impact districts in the northwest metro

BY MINDY MATEUSZCZYK, BRIAN ROSEMEYER, JONATHAN YOUNG AND KATY ZILLMER

Sun Newspapers

DaytonPlan

In January, Gov. Mark Dayton put forward a state budget proposal that includes about $344 million in additional funding for schools during the next two years.

The governor’s proposal has widely been called a starting point for the legislature’s budget conversations. Until lawmakers approve a budget, education leaders in the northwest metro and across the state will be holding their breath to see the final package.

bc21SCavid-3Dayton’s plan focuses heavily on funding all-day kindergarten and special education. According to numbers from the Minnesota Department of Education, funding for all-day kindergarten would go up $79 per student statewide by 2015. Special education funding would rise $180 per student.

In northwest metro districts, how the governor’s plan handles integration funding is under intensified scrutiny because of the diverse population in the region.

The formula currently used to calculate integration revenue is slated to expire, and the legislature must determine how it will distribute the money in the future.

Dayton’s budget wouldn’t allocate additional money for integration aid from the state. His plan would redistribute the current aid so the amount of funding would reflect the percentage of students of color in a district. Several districts in the northwest metro would benefit from that redistribution.

Under Dayton’s plan, however, districts would lose the authority to set an integration levy, which currently accounts for 30 percent of integration revenue.

Sun Newspapers asked the superintendents of four northwest metro school districts what they thought of the governor’s budget and how it would affect their districts.

They generally seemed to appreciate the attention Dayton’s budget gives to education. That said, there appears to be a general consensus that the plan doesn’t amount to the overhaul of education funding they would like to see in order to create an equitable, sustainable system.

 

ANOKA-HENNEPIN DISTRICT 11

The Anoka-Hennepin School District doesn’t like the governor’s plan very much. Supt. Dennis Carlson has even shared testimony at the Capitol.

According to the Minnesota Department of Education, the proposed budget would give the district an additional $54 per student or about $2 million for the 2013-14 school year. In 2014-15, the district would take in $251 per student more than it does now, or about $9.2 million. That makes a total of about $11.2 million additional revenue during the next two years.

Key drivers of the increases would include all-day kindergarten and special education. Anoka-Hennepin’s increase in kindergarten funding would be a few dollars above the average per-pupil increase statewide. But even though the district would see a significant increase for special education, the amount would be about $8 per pupil below the average statewide increase.

All together, the increases wouldn’t even cover the cost of inflation, Carlson said. He identifies this as one of the major problems in the system when it comes to funding public education.

“We need $14 million just for inflation,” Carlson said. “The system is broken. Why is inflation taken into account for the health and human services budget but ignored for public education? It’s not an honest way to do budgeting.”

While Carlson said the district applauds Dayton’s focus on early education, special needs, anti-bullying and mental health, the mandates go largely unfunded. According to the district’s Chief Financial Officer Michelle Vargas, the state’s all-day every-day kindergarten initiative is only being funded about 30 percent by the state.

“They always say ‘we have to do something about these things … about mental health, about security, about special needs and poverty,’ and they do something, but not enough,” Carlson said. “It’s really frustrating. We just get political solutions when we need practical answers.”

In addition to inflation, Carlson said unfunded mandates create a lot of stress on school district budgets.

“It means districts have to pass referendums in order to pay for these unfunded mandates,” Carlson said. He acknowledges that Anoka-Hennepin has had significantly greater support in passing referendums than some other districts, like neighboring Brooklyn Center.

“Our residents have done everything they possibly can to support education,” he said.

Both Carlson and Vargas commented that the funding formulas work against Anoka-Hennepin. Carlson cites simple mathematics for proof of his theory. He identifies the district as a microcosm of the entire state.

“We represent 5 percent of the state population, so if the governor spends $300 million, we should get $15 million,” Carlson said.

This is clearly not happening, and Carlson points to the funding formulas as part of the problem. He said the district ranks as average in categories such as poverty and students of color. Because of this, the proposed budget provides an increase of only a total of $251 per student by 2015, contrasted to the statewide average of $339.

Another major drawback, Carlson said, is how the budgeting process affects staff.

“It’s March, we are doing our staffing for next year,” Carlson said. “It’s the time of year where the district has to decide how many teachers it can afford and whether we need to issue pink slips.”

Under Dayton’s proposal, board members would have to consider laying off 250 teachers, but because they have been able to build up a 10 percent fund balance, Carlson said they are willing to dip into that to cover the teachers for the year.

But he cautions that depending on the budget outcome, the district may have to make double cuts the following year.

 

BROOKLYN CENTER DISTRICT 286

In Brooklyn Center Community Schools, Supt. Keith Lester said any level of revenue approved from Dayton’s budget proposal will help the school district – but there is also concern about requirements that will dictate how the money is spent.

“There isn’t anything there I disagree with,” Lester said. “It’s putting money where the need is. My concern is the restrictions that end up getting put around it.”

The 2013-14 budget proposal would give Brooklyn Center $222 per student more, or almost $504,000 in additional revenue, according to the Minnesota Department of Education. The following year the district would get about $667 per student more, or about $1.6 million beyond current revenue. That makes a total of about $2.1 million added revenue during the next two years.

“It looks good for Brooklyn Center if we got half of what’s there,” Lester said.

Key drivers of the increased funding for Brooklyn Center include all-day kindergarten and special education. Brooklyn Center’s increase in all-day kindergarten funding would be very close to the average per-pupil increase statewide. The district’s special education increase per pupil would be well above the average statewide increase.

Lester said any increase in the amount per pupil for special education will help.

“I am thinking there is enough there in the special education (proposal) alone to pay down the cross subsidy,” he said.

Brooklyn Center’s all-day kindergarten program began with grant funding, and the Board of Education decided it should be in the budget after those dollars ran out, according to Lester. The $78 in per-pupil funding proposed by the governor in 2015 would also be a plus for Brooklyn Center.

As for integration revenue, Lester doesn’t worry about whether Brooklyn Center would get its share. The district is slated to get $117 per student in additional integration revenue by 2015 under Dayton’s proposal.

Overall the district staff has to be cautiously optimistic about the state budget projections, Lester said.

The district’s 2014 budget planning is already underway and preliminary numbers will be approved by the Board of Education before the state turns out its final funding in May.

For now, staff is budgeting for payments toward the statutory operating debt based on the state revenue the district already receives. That would mean reducing the budget by $350,000 to be even for 2014, Lester said.

“We have to base it on reality, he said. “Until the legislature adjourns we don’t know what we’re going to get. I’ve got to believe that no matter what happens in politics, it’s got to be better than it was.”

 

OSSEO DISTRICT 279

The Osseo School District would see a higher-than-average increase in revenue under the governor’s plan. That would help reduce anticipated budget cuts in the district.

According to calculations by the Minnesota Department of Eduction, the district would receive $123 per student or nearly $2.5 million in additional revenue next school year. Revenue would be up $504 per student or about $10.1 million in 2014-15 compared to this year. Overall the district would receive approximately $12.6 million in additional revenue during the next two years.

Even with the extra cash, the district wouldn’t expect to add programs.

The school board voted March 5 to cut $3.1 million in expenses next school year, with the potential for about $8.1 million in cuts for 2014-15. The board delayed some of the most painful reductions in hopes that it will receive additional state funding and possibly win approval of a local operating levy.

“(Under Dayton’s plan) we would reduce fewer expenditures than we are already planning to reduce,” Supt. Kate Maguire said, adding that retaining classroom teachers would remain the priority.

Key drivers of the increases would include all-day kindergarten and special education. Osseo’s per-pupil increase in kindergarten funding would be a few dollars above the average increase statewide. The district’s per-pupil special education increase would be well above the average statewide increase.

As in other racially diverse districts in the northwest suburbs, integration revenue is a key concern. Integration revenue is intended to help close the achievement gap between students of color and white students. The district currently receives about $3.2 million in integration revenue.

“The governor is proposing a little bit of an adjustment to the formula … a redistribution of those funds to better recognize students of color in a school district,” Maguire said.

Osseo would benefit from that.

In the governor’s proposal, Osseo’s integration aid from the state would go up $39 per pupil by 2015. But the authority to set an integration levy would go away, so the district wouldn’t see much change in that revenue. But Maguire said the district is advocating for continued authority to collect an integration levy

“We’re making progress on closing the racial achievement gap,” she said. “We know what it takes … and we need revenue to get it done.”

Maguire generally supports the governor’s plan, calling it a “breakthrough in that it demonstrates a commitment to K-12 education … that we haven’t seen for many years.” Nevertheless, she doesn’t think the governor went far enough in addressing issues of equitable funding.

“I wish that there would’ve been more substantial finance reform that would’ve included a return to the general education levy to increase equity,” she said.

Minnesota used to have a statewide general education levy intended to fund schools fairly. Districts have become more reliant on local levies since that levy was abolished in 2001, and funding has become uneven across the state.

Maguire said providing an equitable school system is one of the few things the state must do according to the Minnesota Constitution.

“A sustainable, equitable and predictable source of funding is critical,” she said.

 

ROBBINSDALE DISTRICT 281

Robbinsdale Area School District 281 is in line to receive some extra revenue with the governor’s proposed budget.

However, in the tangled web of education funding, the extra money and built-in trade-offs don’t equate to a large positive for the district.

For the time being, Supt. Aldo Sicoli said the district would utilize the proposed additional funds to cover inherent budget shortfalls.

“Assuming something similar to this budget gets passed, we would have a relatively well-balanced budget for next year,” Sicoli said. “But there won’t be additional programs.”

According to numbers provided by the Minnesota Department of Education, District 281 would see about $104 per student or nearly $1.3 million in additional revenue for the 2013-14 school year. The following year, it would receive $511 per student or about $6.3 million more than it does now. During the next two years, the district would take in a total of about $7.6 million in additional revenue.

Key drivers of the increases include all-day kindergarten and special education. Robbinsdale’s increase in all-day kindergarten per-pupil funding would be right at the statewide average increase. The district’s per-pupil special education increase would be well above the average statewide.

Sicoli said he doesn’t expect the governor’s proposal will cover all the gaps, even with the change.

“In the following years there are so many unknowns, but we’re looking at a deficit even within the governor’s proposal,” Sicoli said.

The main focus of the district, he continued, revolves around integration aid. While Dayton is proposing to reinstate integration aid, the budget does not renew the ability of districts to set a property tax level for integration funds.

Without the authority to set the levy, Sicoli estimated that the district would be shortchanged nearly $600,000.

“They are trying to reduce property taxes. The levy is 30 percent of our money [for integration], and that’s set to go away,” he said. “Some legislators are very reluctant to reinstate that because they want property tax relief. It’s already on the books to sunset and it would be seen as an increase although, in effect, it would be the same. That’s a political dilemma, so I’m not hopeful that it’s going to work for us.”

An even bigger chunk of District 281’s pie is tied to the integration aid directly received from the state, which is also forecasted to end after the current school year. The aid money itself is set to remain in the state’s budget with intent to distribute the money differently, but Dayton’s budget proposes reinstating those funds specifically for integration.

As it stands, if a school district qualifies for integration aid, the amount is distributed based on total population of the district. Sicoli said District 281 would benefit from an integration formula that follows the ratio of students of color, as opposed to overall population, due to the diversity of the district.

Sicoli also noted the inherent difficulty in regularly drafting a district-wide budget around a number of different off-timing factors, political whims and overall inconsistency.

“Can’t we find a better way to do this, so we have more consistency and can plan ahead of time?” he asked. “What other business doesn’t know what their revenue is going to be when they have to create a budget? It never ceases to amaze me about how close we get to our assumptions and what really happens, but that’s not really a good way to do business.”

He continued to say that, while the governor’s proposal doesn’t structurally fix education’s funding woes, there are aspects therein which take steps in the right direction.

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