Equalization Part of Final Tax Agreement.  With all of the talk about the funding increases in the E-12 bill, not much was said about the just under $10 million that was contained in the tax bill for referendum equalization.  It's below what we were hoping for and less than what was either in the House or Senate initiatives passed by the respective bodies (House $25 million in their E-12 omnibus bill and Senate $15 million in their tax bill), but it clearly is a step in the right direction and it is greatly appreciated.  The tax relief is accomplished through an increase in the now first-tier equalizing factor from $510,000 in referendum market value per pupil unit to $567,000 in referendum market value per pupil unit.

As measured annually by the Minnesota Department of Education, the gap between districts at the 5th and 95th percentile of funding in the categories of the operating referendum, local option revenue, equity revenue, and transition revenue is widening again after being narrowed dramatically by changes made during the 2013 and 2014 legislative sessions when the $300/PU board-approved operating referendum was established and the $424/PU local option revenue was made uniform for all districts.  Narrowing that gap will likely fall to individual districts passed voter-approved levies.  The increased equalizing factor will not deliver relief to districts that will now be at zero in referendum authority (the $300 per pupil unit board-approved referendum and the $424 per pupil unit local option revenue has now been combined into a single category of local option revenue equalized at the current rates for each of the previous categories), but as those districts seek to pass new referendum authority, those districts below $567,000 in referendum market value per pupil unit will receive some measure of state aid.

The challenge for low property wealth districts going forward will be to further increase the equalizing factors across-the-board and then have those factors indexed to averages in statewide property wealth growth.

Here is a data run for the increase in referendum equalization.  The increased aid is found in the column labeled "Q".

District-by-District Referendum Equalization Aid Increase Run