A Double Header of Hearings. The House Education Funding Committee's hearing was once again dedicated to a tutorial conducted by Tim Strom and Emily Adriaens. I will post the Powerpoint used to describe Minnesota's education funding system once it is put on the committee's website.
The Senate Education E-12 Funding Committee featured a presentation by Mark Haveman, the Executive Director of the Minnesota Center for Fiscal Excellence on a 2015 report from the organization entitled How Much is Enough? The Implications of School District Labor Cost Trends for State Education Aid. The report is fairly straightforward, but it takes a few pages to get to the main point of the report, which is given the cost structure of Minnesota's education labor market there is an impending resource shortage if the cost structure isn't altered. The report provides some recommendations, mostly surrounding the need to move away from the unified step-and-lane salary schedules used in a vast majority of school districts and to make certain that categorical revenue is used efficiently to meet the intended needs of these formulas.
Something the report doesn't say (but it may infer) is that the property tax may need to play a larger role in education funding. For that to happen, there will need to be more revenue dedicated to the referendum equalization program. This discussion puts me in the Way Back Machine with Mr. Peabody (come to think of it, I kind of look like Sherman) to the year 2001 when the Ventura Administration got rid of the general education levy and made the basic formula totally dependent on state aid. A lot of us warned policy makers of what might happen if the formula became too dependent on state aid and, sure enough, within a year, the state was short on revenue and there was no general education levy to fall back upon to provide additional resources to school districts. On top of that, districts that could pass referenda soon began to widen the revenue gap between themselves and districts that couldn't, which was largely a function of equalization factors not being adjusted upward to reflect the statewide growth in property tax wealth.
With the upward adjustment of the first tier referendum equalizing factor in 2013 and the creation of local option revenue in 2014, the gap that had grown throughout the first decade of the 21st century narrowed dramatically. If we don't continue to pay attention and keep adjusting the equalization factors to reflect statewide property wealth growth, these gains in terms of equity may be sacrificed in the name of adequacy, and it will only be adequacy for some (those fortunate enough to pass referenda).
Here is a link to the report: MCFE Report on Education Labor Costs