Friday, July 22, 2011

A Bit of a Different Angle Today. Before I delve into the teacher evaluation piece of the bill omnibus education policy bill passed on Tuesday night/Wednesday morning, I wanted to blog about two money items that found their way into the bill. In Article 1, there are two sections (Sections 17 and Section 36, Subdivision 10) that distribute revenue to select sets of school districts.

Section 17 is the newly-established small schools revenue that will be part of the general education formula. Districts (charter schools are not eligible) with less than 1,000 pupil units will receive revenue on a sliding scale (the further a district is below 1,000 students the more revenue it will receive) with a maximum benefit of approximately $522 per pupil unit (this example would be the extreme case as it would be a district with one student). Cyrus is estimated to be the smallest school district in the state with an adjusted marginal cost pupil count of 36 during the 2012-2013 school year, making its benefit approximately $501 per pupil. The small schools revenue formula will be a permanent part of the general education formula going forward. While I'm not nuts about it one way or the other and it will augment current sparsity revenue for a number of districts, I am aware that smaller districts have higher marginal costs per pupil and this formula should be helpful in meeting those needs.

Subdivision 10 of Section 36 proposes a formula to distribute one-time money to the 20 largest districts in the state by augmenting the compensatory formula for any of these districts that currently receive less than 1,400 per pupil in compensatory revenue (in other words, every district in the top 20 in terms of student population except for Minneapolis and St. Paul).

There is an interesting dynamic at play here, especially at the bottom of the top twenty. For the current school year, Stillwater ranks 20th and Minnetonka ranks 21st in terms of students served. According to the February forecast, those two districts change places for the 2012-2013 school year. I find it a bit odd that a swing of 111 students to the good for Minnetonka and 325 in the opposite direction for Stillwater is going to cost Stillwater a gigantic chunk of change. I guess that shows what advertising on MPR will do for a district and why having a huge charter school in your district siphoning off students isn't. It's also a bit of a thumb in the eye, given Minnetonka is a district--and the only one in the top 20 in terms of student count for 2013--that is over the current referendum cap and Stillwater is more than $400 per pupil below the cap. I'm not saying Minnetonka doesn't need more revenue (all districts do), but it just kind of smacks of lunacy. Of course, it's not the 2012-2013 school year yet and who know what each district's pupil count will be when that rolls around.

I'm not going to go on-and-on about these two provisions, but they show once again why there is a need for comprehensive funding reform that achieves both greater adequacy and greater equity. What we see here are two piecemeal solutions that aim to do something in terms of funding needs for two distinctly different sets of districts. I'm not going to cry "#$!^*#+!@ POLITICS!" because this is no more partisan or political than what's been going on since 1858. Education funding, both in terms of level and distribution, is an extremely political process. Maybe someday I'll write a book about it, but for now, just take my word for it.

What is frustrating is that once again, the bulk of low-property wealth districts throughout the state find themselves on the outside looking in when it comes to revenue delivered through the framework of state and local education funding formulas. For the past school year, the state average per pupil general education funding was $7,046. For the top 20 districts in terms of student population, it was $7,364 (all four SEE members in this group are well below this average and all but one below the state average as well). The per pupil average for those districts below 1,000 pupil units is $7,019 per pupil. For SEE members--all but three with more than 1,000 and only four in the top 20 pupil unit count for the 2010-2011 school year--the average is $6,570.

I'm not going to go off on a Dennis Miller rant here. Even with the 60/40 shift, the education community made out better than a lot of other parts of state government this past session. The $50 per pupil unit increases in both years of the biennium are welcome. The new literacy aid program will send new revenue to all districts in the state. Maintaining current law growth factors for special education is important and welcome. The maintenance of local government aid at current law levels will also help a number of SEE districts by preventing the property tax atmosphere from becoming even more hostile and disadvantageous when compared to higher wealth areas. So it isn't all bad.

But it is still frustrating that the King Kong-sized gorilla in the room is being ignored. SEE districts continue to fall behind for two very specific reasons. First, the array of general education formulas continues to become more concerned about differences that exist between districts as opposed to having the basic formula be a closer reflection to the cost necessary to fully educate a student in the 21st century. Second, the failure to have the equalization factors for the referendum and debt service programs keep pace with property growth makes the referendum a less viable tool for low property wealth districts with each passing year.

Briefly, the plight of low property wealth school districts remains largely unsolved. After a lot of progress in the early 1990s in working to equalize property tax levies, low property wealth districts are now facing increasing challenges in both of their standing in terms of state formulas and an increasingly unbalanced property tax system and it's been hard for us to get our hands back on the dice.

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