Florida Lengthening School Day.  I've been critical of Florida's education reforms in several of my blog entries over the years, but one cannot argue with their success in several areas, especially on closing the achievement gap between white students and students from several categories of racial minorities.  Florida's latest reform will be lengthening the school day and devoting more time to reading instruction.  As most of you know, reading by third grade is a clear market when it comes to measuring chances for future academic success and it will be interesting to see if other states follow Florida's lead.

Here is an article from the January 22, 2014, issue of Education Week:  http://www.edweek.org/ew/articles/2014/01/22/18florida_ep.h33.html?qs=florida+school+day

Great Column.  Here's another item from Education Week (January 8, 2014, issue).  It's a really great column by Georgetown professor Dr; Peter W. Cookson, Jr., that provides some very keen insight on educational equity issues.  There are a lot of angles to the equity issue and while Cookson doesn't hit them all, I think he does a good job of explaining why education is the key to America's future and why it is important that all students have access to a high quality education.

Link:  http://www.edweek.org/ew/articles/2014/01/08/15cookson_ep.h33.html?qs=cookson

I urge everyone even remotely interested in education issues to sign up for the daily e-mail alert from Education Week.  You can view 10 articles a month without a subscription and with a subscription, you have unlimited viewing.  Education Week runs special subscription rates several times a year and a subscription is really worth it.

Thank You Belle Plaine.  It was fun getting out in this cold weather to visit the Belle Plaine school board last night.  It's always great to get out and visit with SEE school boards and if any members would like to have me out, just let me know.  Special kudos go out to Representative Kelby Woodard (R-Belle Plaine) and Senator Kevin Dahle (DFL-Northfield) for providing their insight on what may lie ahead during the 2014 legislative session.

The Latest "Quality Counts" Hits the Newsstands.  If you're like me, your favorite issue of Education Week is the annual Quality Counts issue.  This year's edition hit the newsstands a couple of weeks ago, but I've been unable to sit down and take a close look at how Minnesota stacks up nationally on the comparative national measures this year.

It's a mixed bag for Minnesota in the Education Week stats this year.  While ranking sixth nationally in the area of student achievement, Minnesota received a C+ grade.  While our overall percentage of students meeting proficiency in the NAEP tests rank among the highest in the nation, our achievement gap between poor students and their contemporaries rose over the past ten years, by 0.5% for 4th graders and 3.1% for 8th graders.  While not dramatically worse, a number of states are narrowing the gap and it is troubling that the variety of programs that have been implemented in an attempt to narrow the achievement gap don't appear to be producing the desired results.  I want to make it clear that I don't think these efforts should be abandoned because the gap would most assuredly be worse without these programs and the funding that supports them.  It will be interesting to see over the next few years whether the Literacy Aid program enacted in 2011 will help improve overall scores and reduce the achievement gap.  Minnesota's 80.4% graduation rate is slightly less than six percentage points above the national average of 74.7%.

Minnesota scores a C in the funding category.  Minnesota's regionally-adjusted per pupil revenue of $11,043 ranks 28th out of the 51 jurisdictions listed (50 states and Washington, D.C.)  Minnesota's amount is $821 below the national average.  What is really troubling is that according to the figures, only 33.8% of Minnesota's students reside in districts where spending is above the national average, which is a little more than 12% below the national average.  Equity measures are a mixed bag.  Minnesota sits almost right on the national average in terms of wealth-neutrality and the McLoone index (which measures the amount of current spending as a percentage of the total amount necessary to bring all districts below the median per pupil amount up to that amount).  Minnesota does do better than the national average in the amount of disparity across districts and the dollar gap between districts at the 5th and 95th percentiles.

Where Minnesota does quite well is in the area of the report labelled "Chance for Success," in which Minnesota scores higher than the national average in 11 of the 13 categories that comprise the category.  This category concentrates on the qualities which students "bring to school" in terms of income and the level of parents' education.  The two areas where Minnesota is below the national average--pre-school and kindergarten attendance--will likely improve given the actions of the 2013 Legislature to create early childhood scholarships and all-day kindergarten.

Here is the link to this year's Quality Counts:  http://www.edweek.org/ew/qc/index.html

Minnesota Report:  http://www.edweek.org/media/ew/qc/2014/shr/16shr.mn.h33.pdf (downloadable)

Another Day, Another Task Force.  MDE has been working overtime this legislative interim with a number of task forces and working groups.  As I reported last week, the School Facilities Financing Working Group has finished its work last week and its final report has been posted on the web.  A number of other are still at work and today saw the third meeting of the Integration Rule and Statute Alignment Working Group take place.

This working group is seeking to revise the current Integration Rule so that it aligns better with changes made to the Integration Revenue program over the past three legislative sessions.  As many of you recall, actions taken the legislature in 2011 pegged the entire program for elimination after the 2014-15 school year.  Actions taken during the 2013 legislative session rescued the revenue stream, but added an element of achievement to the concept of racially-balanced school environments upon which the program had traditionally been based.

While not at odds, melding the concepts of racially-balanced learning environments and achievement is not as straightforward a task as one would think.  The problem with focusing solely on racially-balanced learning environments is they can be difficult to create and maintain, especially with the opportunity of disgruntled parents to either opt out of a district's plan through open enrollment or by establishing a charter school.  We have seen this happen when districts make changes in attendance boundaries or enter into multi-district integration efforts.

At the same time, achievement should be at the heart of the education process and the integration program is one of four revenue streams--along with compensatory revenue, English language learner revenue, and literacy aid--that provide districts with resources to create programs intended to close the achievement gap, but integration   What makes integration and achievement revenue different is that it attempts to create learning environments that reflect the demographic balance in the wider community.  There is research that shows this can matter in closing the achievement gap and this perspective is voiced by a number of the working group participants.

There will be at least two more meetings of the working group.  Below is a link to the working group page at MDE.

Link:  http://education.state.mn.us/MDE/Welcome/AdvBCT/IntegrationRuleandStatuteAlignmentWorkGroup/index.htm

School Facilities Financing Report Now Downloadable.  The technology issues that prevented the successful downloading of the report of the School Facilities Financing Working Group have been remedied and the report can now be downloaded without incidence.  I urge you all to download the document and take a long look at it.  There's a ton of great stuff in it that would go a long way toward correcting some of the considerable equity problems in the area of school facilities that face most Minnesota school districts.

Again, here's the link:  http://education.state.mn.us/MDE/Welcome/AdvBCT/SchFacFinanWorkGroup/index.html

The report is the first top link on the page.

Congratulations to Steve Razidlo.  Brainerd superintendent Dr. Steve Razidlo will be leaving the district at the end of the school year to head up the American International School in Vienna, Austria.  Dr. Razidlo has been an exemplary school leader in Minnesota and our loss--a considerable one--will certainly be a gain for the American International School.  Vienna is one of the world's most exciting cities and it is teeming with history.  Although I'm sure the work won't be easy, I can't think of many places where a challenge would be as enjoyable.

Good luck Steve!  We will miss you!

Link: http://brainerddispatch.com/opinion/our-opinion/2014-01-17/razidlos-new-adventure 

New Study on Value of Early Childhood Education.  Let me amend the headline and insert "Quality" in front of "Early Childhood Education."  An article in today's MinnPost cites a new study performed by economists Greg Duncan and Aaron Sojourner that contends that access to high-quality early childhood education programs for all children under age 3 would eliminate the achievement gap between white students and their minority counterparts.  Their evidence is quite compelling and shows how investment in quality early childhood programs more than pay for themselves over the long term.

Link to MinnPost article:   http://www.minnpost.com/learning-curve/2014/01/new-study-high-quality-preschool-poor-kids-under-3-would-eliminate-achievemen

Link to "Can Intensive Early Childhood Intervention Programs Eliminate Income-Based Cognitive and Achievement Gaps?": http://www.minnpost.com/sites/default/files/attachments/Duncan%20Sojourner%202013%20JHR%20Gap%20Closing.pdf

School Facilities Financing Report Posted.  At least there is a link to the report, but I am having trouble getting the link to work right now.  As I reported last week, the contents of this report could prove to be of great value to school districts throughout the state.  The recommendations contained in the report would provide access to increased revenue (considerably increased revenue) to most school districts throughout the state, especially to those districts that are not eligible for the Alternative Facilities Program under current law.

The thing to always remember is that there are two types of revenue limits:  (1) the statutorily-defined limit, and (2) the realistic limit.  The only reason I mention this is that although there will be significantly greater access to facility-related revenue in the report's recommendations, the ability of a number of school districts to fully exercise this access may not be as great.  That is why the increased equalization that is also contained in the report is so important.  Without increased equalization, the tax effort necessary to generate the increased revenue at the amounts suggested in the report would be considerably higher in low property wealth districts, making it highly unlikely that low property wealth districts would be able to enjoy the full benefit of the proposed increases.  Even with the equalization, the tax sensitivity in some districts may prevent them from enjoying the recommended increases.

District-by-district runs were distributed at the last meeting of the School Facilities Financing Working Group, but there is not a link to the runs on the MDE website.  I will try to find a way to get the reports posted at the SEE website.

MDE Link to Final Report:  http://education.state.mn.us/MDE/Welcome/AdvBCT/SchFacFinanWorkGroup/index.html

Great Day at MSBA Leadership Convention.  It was great seeing so many SEE members at the MSBA Leadership Convention today.  It's always a well-planned and valuable convention and this year's edition was no exception.  A great keynote and a number of very valuable pull-out session, particularly Dr. Tom Melcher's annual highlighting of the past legislative session and the outlook going forward.  I was happy to see him describe the recently-completed School Facilities Financing Working Group report I mentioned in yesterday's blog entry.  That report provides a framework for a much-needed infusion of adequacy and equity in the funding of school facility needs.

The highlight of the day (at least for me) was speaking along with MREA lobbyist Sam Walseth to a room of superintendents and school board members from districts affected by what has come to be known as the doughnut hole" in school funding.  Roughly described, the "doughnut hole" affects districts that receive neither the small schools revenue that was enacted as part of the 2011 omnibus education funding bill and the location equity revenue given to all metropolitan-area districts and non-metropolitan districts with enrollments greater than 2,000 pupil units.  In other words, these are non-metropolitan school districts with more than 980 pupil units and less than 2,000 pupil units who receive no benefit from either of these changes. Approximately 120 districts comprise this strata, which by most measures is the lowest funded strata in Minnesota's funding system.

The cost of providing these districts with the Location Equity Revenue is approximately $4.0 million, with some districts garnering new revenue and others receiving property tax relief through greater equalization.  Expanding Location Equity Revenue to all districts below 2,000 pupil units (including those that receive small schools revenue is somewhere in the vicinity of $8.0 million with the bulk of the revenue being used to replace property taxes with state aid through greater equalization.

Even though the amount of revenue needed to correct this problem is relatively minor in the whole scheme of things, this won't be a slam dunk.  Given the Governor's and Legislature's assumed desire for a quick and concise legislative session, it may be a challenge to get on the radar and garner the support necessary to get this into the omnibus education funding bill (assuming there is one) and through the entire process and onto the Governor's desk.

It's great that SEE and MREA are working together on this issue.  MREA Executive Director Fred Nolan has also been working tirelessly on this issue and suggested that SEE and MREA co-host today's event.  When these two organizations work together, good things generally happen.  About 40% of SEE membership finds itself in the "doughnut hole" and while I don't have the exact percentage of MREA members in the same situation, I wouldn't be surprised if it were at a similar level.

Again, thanks to all the SEE and MREA members who participated today.

A Superb Report.  I can't say it any more simply than that.  The final report approved by the School Facilities Working Group today would provide a long-needed boost for school districts throughout the state in meeting on-going facility needs.  If adopted, the recommendations would provide both greater adequacy and equity in funding as resources would be increased along with the equalization factors related to these programs.  This would certainly be welcome.

The recommendations are as follows:

1. Establish a new long-term facilities maintenance program to replace the current alternative facilities, deferred maintenance, and health & safety programs.  This would provide a major revenue increase for districts currently not eligible for the alternative facilities program.
2. Improve the debt service equalization program by increasing the portion of debt service that is eligible for equalization, restoring the state share of equalized revenue, and indexing future equalization.  This is a long-time SEE priority and it's great that this is included in the report.
3. Equalize the capital projects referendum levy.  This levy is currently pretty much the domain of high property wealth districts.  Equalizing it would certainly bring greater fairness to the system.
4. Establish a new school facilities improvement revenue program to replace the current building lease levy, providing all school districts with access to a uniform allowance for locally-defined student needs.  This would expand allowable uses for the lease levy and also equalize it.  It also provides assistance for intermediate districts, education districts, and cooperatives.
5. Increase the operating capital revenue, index it for inflation, and increase the equalizing factor.  Not much to say here except "all good."
6. Provide enhanced debt service equalization to address unique situations or needs.  This recommendation aims to help districts where a disaster has taken place and would also replace the consolidation grant program.
7. Streamline the review and comment process.  This recommendation would increase the threshold below which review and comment would be required and would also eliminate the need for review and comment on projects funded with the newly-established long-term maintenance revenue, facilities improvement revenue, and operating capital revenue.
8. Address the facilities needs of other educational entities (charters, cooperatives, intermediate districts, education districts).  Some of this is addressed with recommendation #4, but this recommendation also deals with charter schools.

All in all, this is an excellent report.  I have a copy of the slightly marked up draft report (there were several minor amendments attached today) and the district-by-district runs.  They have not been posted to the MDE website at this point, but should be shortly.  If you would like a copy, contact me.  Remember that the SEE office is out of commission due to the flooding at the MASA office complex, but I can still be reached at brad.lundell@schoolsforequity.org or 612-220-7459.

In closing, I hope to see a lot of you at the MSBA convention tomorrow.

Task Mastering.  Monday and Tuesday saw the next round of task force meetings being undertaken by the Minnesota Department of Education take place.  On Monday, the Career Pathways and Technical Education Task Force met and began discussing its final recommendations.  My report that this would be the final meeting of this particular task force was inaccurate as it appears there will be two more meetings to finalize the report that must be presented to the Legislature by February 15, 2014.

The collection of recommendations currently being considered are very strong, but they are also a bit on prescriptive side in terms of planning and reporting required from districts, which somewhat impinges districts' ability to provide expanded programming and assistance for students.

Today, the Special Education Case Loads Task Force met today and made a  considerable amount of progress toward putting together its final report, also due on February 15, 2014.  One of the real challenges facing the Task Force is how to address the concerns of parents and special education teachers without hamstringing school districts by limiting their flexibility in the delivery of special education services.

Tomorrow, the School Facilities Working Group is meeting for what may its final time.  I am of the impression that this panel is closer to finishing its work, given the tenor of the discussions to this point.  There are a number of very promising provisions that will likely be in the final report on school facilities, particularly an expansion of districts currently not receiving alternative facilities revenue and increased equalization for all facilities-related levy/aid programs.  I will keep you posted on tomorrow's discussion.

Reminder.  With the recent damage to the lower level of the MASA office building, the SEE office located there is closed.  I am working out of my house, but with all the meetings taking place, I won't be there a whole lot.  I have my cell phone on me 24/7 and that number is 612-220-7459.  Sorry for the inconvenience.

SEE Underwater.  We don't have a mortgage and if we did, we probably wouldn't be underwater.  But our office is currently, if not underwater, very much soaked.  A pipe burst at the MASA office complex on Friday night/Saturday morning and being denizens of the basement, SEE's office is the one that got soaked (along with the MASA conference room).  Needless to say, I'm going to be busy packing things up for parts of the next few days, as desks, storage lockers, bookshelves, and the contents held in each will have to be moved so that new carpet and drywall can be installed.  The SEE phone will also be disconnected for the short-term, but I can still be reached at my cell phone number, which is 612-220-7459.  I will also be able to check my e-mail, which is brad.lundell@schoolsforequity.org.

Big Week Ahead.  The fates couldn't have picked a worse week for a pipe to break.  Three, count'em, three draft reports will be issued from MDE task forces this week:  (1) the Career Pathways and Technical Education Task Force, (2) the Special Education Case Loads Task Force, and (3) the School Facilities Financing Working Group.  On top of that, the MSBA Winter Convention begins on Thursday and the Minnesota Association for Pupil Transportation/Minnesota School Bus Operators Association Annual Joint Winter Convention is on Friday.  In other words, it's a wall-to-wall week of activity.

Speaking of the MSBA Convention.  SEE is co-hosting a meeting beginning at 4:50 on Thursday, January 16, at the Minneapolis Convention Center to discuss the "doughnut hole" issue.  Any district is welcome to attend, but discussion will center on strategies to assist those non-metro districts with between 1,000 and 2,000 pupil units and have thus been left out the Location Equity Index passed in 2013 and the small schools revenue passed in 2011.  I look forward to seeing many of you at the meeting.

Interesting Education-Related Blog I Happened Across.  While doing some research on-line the other day, I came across this blog--School Finance 101--authored by Dr. Bruce Baker, a professor in the graduate school of Education at Rutgers University.  Looking through the blog, there are some really interesting takes on a number of education funding and policy issues, including his latest post on de-ciphering the meaning of the recent National Assessment of Education Progress (NAEP) and Programme for International Student Achievement (PISA) test results.  The results of these tests have caused a lot of discussion and Dr. Baker puts forward a pretty thorough statistical analysis that provides a different perspective on the results than what has generally been reported.

Here is a link to Dr. Baker's blog:  http://schoolfinance101.wordpress.com/

Here are the links to the NAEP results discussed in Dr. Baker's blog:  http://nationsreportcard.gov/reading_math_tuda_2013/#/

PISA test results discussed in Dr. Baker's blog:  http://www.oecd.org/pisa/keyfindings/pisa-2012-results-overview.pdf

Happy Holidays to All!  I'd like to take the time to thank everyone inside and outside SEE who have offered support during 2013 and I look forward to continuing our important work in 2014.  Hope all have a safe and happy holiday season.

It Pays to be Optimistic.  Don't worry.  I remember the snickers from the audience at the September meeting when I said I was optimistic about the state's fiscal  picture (Me optimistic?  I think Deb Henton actually mentioned it in the meeting minutes.  That's how rare optimism comes from me.), but lo and behold, I was right!  There is that anecdote about the blind squirrel finding the acorn that is somehow appropriate here, but there's no question that for whatever reason, Minnesota's financial picture is pretty rosy as we head into 2014.

The November forecast (why is it called the November forecast when it's delivered in December?) came out today and it shows an approximately $1.08 billion surplus for the remainder of this biennium.  That means that after the school property tax shift is paid back and the $15 million owed to the state airports fund, there will be $800 million left on the bottom line.

It needs to be pointed out that approximately $250 million of the budget forecast "surplus" (how many times have I been reminded that it's not a true surplus, but an increase in forecasted--not actual--revenue) comes from lower than expected expenditures.

The Governor has stated that he wants an "unsession," but I think it would be hard for a legislature of any partisan stripe to walk away from an $800 million opportunity to cut some of the taxes enacted last session and/or spend on new or existing programs.  Where there is money, there is action and I expect there will be a tug-and-pull starting February 25 (the first day of the 2014 Legislative Session) over this little windfall.

What is even more heartening than the short-term uptick is the rosier picture for the 2016-2017 biennium, which shows projected revenue to be up approximately $1.5 billion.

Here is the link to the documents related to the budget forecast.  The most valuable document is the complete forecast, which is the third item down:

http://www.mmb.state.mn.us/critical.html

Global Agreement Reached.  The Governor and legislative leadership reached accord on the parameters of the budget for the coming biennium.  The plan features $2 billion in tax increases (income, tobacco, and probably alcohol) and a $475 million target for the E-12 education budget.  It also contains a temporary surtax on high income earners that will be used to pay back the school shift, a high priority for the House DFL caucus.

Here is a StarTribune article that outlines the agreement:  http://www.startribune.com/local/207121531.html

Home Stretch.  It’s the time of the year when I start dusting off the analogies to describe how the legislative process operates as it enters the stage when conference committees on the major budget and policy bills start to put together the final versions of these bills for final legislative approval.  As a refresher, it’s important to remember that each legislative body assembles its version of a bill and those bills, especially in the case of the major budget bills, are rarely identical.  This necessitates the conference committee process—a body composed of representation from both legislative bodies (including the chairs of the budget committee whose jurisdiction covers the bill)—in which the final version of the bill is developed through a set of compromises.  I don’t know if you covered this in your ninth grade civics class (or if you even had ninth grade civics), but a bill must pass both houses of the legislature in exactly the same form (and when I mean exact, I mean exact) before it can be sent to the Governor either for his signature or veto.

Enough with the civics lesson, it’s time for the analogy.  Think of the legislative session as you planning your Thanksgiving dinner.  You probably start out by thinking what you want to serve.  You think about how many people are going to be at dinner and how big a turkey you are going to need to buy.  You think about what you want to serve for side dishes and what recipes you are going to use.  Now imagine that another family member has decided to help out, but they have their own special stuffing recipe that you don’t particularly care for that they insist on using in the turkey.  You balk, but relent after agreeing with the family member that you will stuff the turkey with their recipe and your recipe.  You then buy the turkey and on Thanksgiving Day, you and your sibling stuff the turkey simultaneously with your respective recipes.

We’ve reached the time in the legislative session that the size of the turkey has been determined.  The tax increases agreed upon by legislative leadership and the Governor have allowed the purchase of a big old twenty-five pound Butterball © and over the next few days, it is going to get stuffed with legislative “ingredients,” namely provisions on spending and policy.  In the end, because both recipes have been used and cooked into one turkey, the meal will be identical for all the guests that arrive instead of having one turkey with one dressing recipe and one turkey with a different dressing recipe.

Have I tortured this analogy enough (please say “yes”)?  At any rate, the informal deadline for completion of the bill is Thursday at midnight and the negotiations will undoubtedly result in a package that contains both the House and Senate recipes.  As I said earlier, the package of tax increases that have been agreed upon will provide a sizeable budget target of $475 million for the conference committee.

As I said, the bill will likely be finished by late Thursday (May 16) and it will feature a commitment to voluntary all-day/every-day kindergarten and an increase (perhaps as large as 2% in each year of the biennium) in the general education formula basic amount.  There will also be a commitment to the early childhood scholarship program promoted by the MinneMinds coalition which looks to be about $40 million over the biennium.  In the policy realm, there will be a new assessment system that eliminates the 11^th grade MATH grad and replaces it with a suite of assessments that will hopefully ensure college and career readiness.  The House provision known as "Minnesota's World's Best Workforce," will also likely be part of the final package in some form.

Tax Bill.  The tax bill will also be put together over the next few days and if there is going to be increased referendum equalization (and there likely will be), it will be the product of those discussions and not the discussions on the E-12 bill.  Senator Rod Skoe has been promoting increased equalization all session long and it appears at this point that resources will exist to do something considerable in this area.  One possible negative that exists is the proposed referendum freeze that would prevent districts seeking to increase their referendum this fall.  While districts that have already passed a resolution stating their intent to put a question on the ballot in November are exempt from the freeze, there are many more districts that are likely interested in going before the voters this fall and this issue will have to be discussed and the restriction either eased or eliminated.  Another potential problem springs from the fact that equalization aid currently follows students to the serving district under open enrollment or charter school law.  This could prove extremely problematic, as an equalization increase would result in a district losing money.  Just more things to consider in the thicket-laden world of education funding.

Equalization Proposals Discussed in Tax Conference Committee.  The tax conference committee tackled the provisions in the Senate bill relating to referendum equalization and providing districts with little or no referendum levy with added financial support.  The Senate has altered its approach a bit from the initial proposal that was contained in the tax bill.  Instead of creating a new revenue category (early advancement revenue or EAR), the altered approach calls for making the first $300/PU a board-authorized levy equalized at a very high rate.  Districts with less than $300/PU in referendum authority could, by board action, raise that amount by board action.  Districts with more than $300/PU would have the first $300/PU converted to board-authorized authority that would not have to be renewed by voters.  This first tier, as stated earlier, would be equalized at a rate approximately 65% higher than the current first-tier equalizing factor.  It is difficult to gauge the exact increase in the equalizing factor because the Senate omnibus education finance bill radically changes pupil weightings and balancing the changes with the new "denominator" is inexact at this point.  Rest assured, however, that the new first tier of the referendum (now board-approved) is increased mightily.  The second tier of the referendum then becomes the revenue space between $300/PU and $775/PU and that is equalized at a rate above the current first tier equalizing factor of about 15%.  The third tier is the revenue area between $775/PU and the cap and the equalizing factor for that increment is well above that of the current second tier equalizing factor.  So equalization increases all around and the opportunity for districts with low levels of referendum revenue to close the gap between themselves and districts with high levels of referendum revenue.

Hard to tell where the debate goes after today's exchanges.  There is both support and skepticism coming from the House side.  House Tax Chair Ann Lenczewski, while sympathetic to the plight of low property wealth school districts, has concerns that the metropolitan area continues to subsidize low property wealth areas in the state through property tax relief mechanisms like equalization of school aid formulas and local government aid formulas.  The House position does little in terms of "yield adjustment" in its tax bill (it does increase referendum equalization in its education finance bill) and relies more on direct-to-taxpayer assistance through an improved property tax refund program.

The Senate is committed to accomplishing something in the area of school-related property tax relief this year and the current proposal is very strong.  I would urge all SEE members to contact their members of the House of Representatives and urge them to take a serious look at the Senate proposal.  While the Senate proposal does not recoup the entire erosion of the equalization program that has occurred over the past 20 years, it takes a big step toward righting the ship.

Education Conference Committee Begins.  The Senate/House conference committee that will work out the differences that exist between the two versions of the 2013 omnibus education funding bill began its work this morning.  While there are differences within the bills, there is nothing here that probably cannot be overcome rather easily once the budget targets are set.  The committee has spent the first few hours of the meeting going through the competing bills and highlighting differences that exist.  These differences are relatively minor and it's important to remember that both bills contain:

• A commitment to voluntary all-day kindergarten.
• Revenue going to the general education formula instead of special education.
• Similar provisions on student assessment largely based on the work of the assessment working group convened by the Minnesota Department of Education last summer.

For those of you who want to see the differences in the bill, here is a link to the side-by-side summary.

Link:  http://www.house.leg.state.mn.us/hrd/bs/88/HF0630.pdf

Deb and I will keep you posted on the conference committee's progress.

Tax Conference Committee Continues.  It's important to remember that the Senate tax bill also contains significant property tax relief for school districts and those provisions are on tap to be discussed at some point today.  I will keep you posted on this important matter.

Two Week Warning.  Two weeks from tonight, the 2013 regular session of the Minnesota Legislature will come to a close.  While there's a lot of work remaining to be done, it looks as though things will fall together fairly quickly after the tax target is determined by the conference committee on HF 677, the 2013 omnibus tax bill.  There is little doubt that taxes will be raised this session, but the obvious question is, "By how much?"  Both the Senate and the House have ambitious revenue increases in their respective bills, but the approaches differ dramatically.  Both bills raise state income tax rates for high income earners and make changes to the sales tax that broaden the sales tax base by taxing transactions currently not subject to tax.  The increased revenue generated by these changes in state taxes are used to:  (1) balance the state budget for the coming biennium, (2) put additional revenue into several areas of the state budget beyond what was included in the Governor's budget released in January, and (3) provide property tax relief.  The greatest departure that exists between the two bills is that the House proposes to implement a temporary income tax increase with the proceeds of the tax going to eliminate the property tax early recognition shift and set the education aids payment schedule at 90%/10%.

The tax conference committee has been meeting regularly, but no headway has been made on the major issues facing the panel, which leaves pretty much everything else in flux at this point.  The conference committee will be discussing the Senate's education property tax provisions tomorrow (Tuesday) evening.  As many of you recall, the Senate tax bill contains a $300/PU roll-in of the referendum levy (and equalizes the roll-in at an extremely high rate), increased equalization of the remaining referendum levy, and a re-establishment of the integration levy.  It is also important to remember that the Senate also buys down education property taxes in their version of the omnibus education funding bill by combining a set of levies that are either unequalized or equalized at a fairly low rate and reducing the total levy by $150 million.  The House has approximately $30 million in referendum equalization in their version of the omnibus education funding bill.

It will be a busy two weeks, but I have seen the Legislature cover more ground in less time, so it's not like the session has reached a point where things will simply be thrown together at the last minute.

Follow-up on Referendum Freeze.  As I've reported before, the Senate tax bill contains a provision that would prevent districts from going before the voters this fall to add to their current level of referendum revenue.  Senator Karin Housley offered an amendment on the Senate floor that would exempt districts that have already passed a board resolution outlining their intention to seek additional revenue through a voter-approved referendum to put a question before the voters this fall.  This will not exempt many districts (I can only think of one) from the freeze, but Senator Rod Skoe, the Senate Tax Chair, expressed support for making a larger exemption in conference committee with the only question being how to accomplish that.  I would urge all districts that are considering going out this fall to pass a resolution as soon as possible.  It is my guess that if the freeze survives (and there is a strong chance it won't), districts that pass a resolution by a certain date will be exempted from the freeze.  Everyone will have a pretty good idea of their revenue situation for the coming year and should be in a position to know whether (and how much) they will be embarking on a referendum campaign in the fall.

Anti-Bullying Bill Passes House.  After several hours of debate on a slate of amendments that reached double digits, the House passed HF 826 (the anti-bullying bill) by a party-line vote of 72-57.  There wasn't much new ground plowed in the debate, as questions over free speech, parental notification, and privacy were once again brought forth by those objecting to the implementation of a statewide anti-bullying policy.  Representative Jim Davnie, the bill's chief author, added an amendment to the bill that made clear the free speech rights of students and to not have those rights infringed upon in the implementation of the new policy. The difficulty will be--and this has always been the case--in determining the point at which speech becomes an exercise of opinion and morphs into harassment which then morphs into a pattern that would resemble--and may well prove to be--bullying.  The Senate is taking up its version of the bill--SF 783--in the Senate Education Funding bill tomorrow and it will then have to return to the Senate Finance Committee before hitting the floor.  The earliest the bill would hit the floor is likely to be Thursday and only then if the timing of the Senate floor sessions is such that it will accommodate the re-referral of the bill and the processing of committee reports.  I will keep you posted on the bill's progress.

Senate Passes Tax Bill on Second Try.  Monday's Senate debate on the omnibus tax bill made it seem like the entire proceeding was going to be anti-climactic.  I anticipated a session that would be fraught with amendments trying to highlight the proposed tax increases in the bill along with some of the other provisions.  Instead, the proceedings leading up to the first vote on final passage (note the word "first") was relatively quiet and straightforward.  As I wrote earlier, I was expecting a series of amendments on the income tax, cigarette tax, and the sales tax portions of the bill, but there was very little discussion of that outside of the Republican's macro-theme that given the state of the Minnesota (and national economies) and the fact that the projected budget shortfall has shrunk dramatically, tax increases of the size proposed by the DFL majority simply aren't needed and will be detrimental to the average Minnesotan and, by extension, Minnesota as a whole.

Nine amendments were offered, two being fairly technical amendments coming from Senator Rod Skoe, the Senate Tax Committee chair and the bill's chief author.  Three of these amendments were successful; the two offered by Senator Skoe and one by Senator Karin Housley that exempted districts that have passed a resolution to put an operating levy question on the ballot from the referendum freeze contained in the bill (more on that later).  The six amendments that failed came from a variety of sources and were offered by both caucuses.

There was also a motion to re-refer the bill to the Senate Finance Committee that failed.  The reason that motion was in order is that the tax bill contains a $200 million appropriation for proposed renovation of the Capitol area.  There is reluctance on the part of the Senate to pass a bonding bill, but a realization that the Capitol needs refurbishing and upgrades in a number of areas and the desire to contribute to that project and get it underway.  Bonding projects are almost exclusively handled in the Capital Investments Committee, hence, the discomfort on the part of some for allowing the bill to go forward without a review by the Finance Committee.

But the relatively brief debate (it was a couple of hours, but when one is expecting eight hours, two hours seemed like a welcome nanosecond) belied the drama that was to come.  When it came to the final vote, the bill failed on a vote of 32-34 (35 votes needed for passage).  7 DFLers (6 of them freshman senators) voted against the bill and one Republican voted for the bill.  One DFL senator was absent.  The Senate then recessed and both parties headed into private caucuses.

After something like this happens, it's off to the woodshed to put things in order and after a bit, the Senate re-convened, a DFL Senator who had voted against the bill moved to re-consider the vote.  That motion was successful and the debate ensued once again.  A motion was made to refer the bill back to the Tax Committee and that motion failed, setting up another vote for final passage.  This time, the bill passed on a vote of 35-31, with two DFLers changing their votes from "no" to "yes" and the senator absent from the first vote joining on the affirmative side.

As I mentioned briefly above, Senator Karin Housley offered an amendment that would exempt districts who have already passed a board resolution to proceed and put a question on the ballot this fall.  The bill contains a referendum freeze and this isn't the first time a legislative body has included a proposed referendum freeze (or levy cap) to accompany an increase in property tax relief (and the property tax relief in the Senate bill is considerable).  There is always a concern that property taxpayers will not see the effects of the property tax relief if local governmental units simply turn around and "levy back" the relief.  Of course, the difference between school districts and other units of local government is that school districts have to seek voter approval for almost all proposed levy increases while cities and counties can increase levies by council/board approval.  The problem--and Senator Skoe admitted this in his support of the Housley amendment--is that school districts often plan years in advance as to when they will go before the voters and how much they will seek when they do.  A number of districts have been in the planning process to go before the voters with a ballot question this fall and the proposed freeze would throw a king-sized monkey wrench into those plans.  While Senator Housley's amendment only exempts districts whose boards have already passed a resolution to put the question on the ballot, I believe the sentiment will be to allow more districts to seek voter-approved levies this fall once all the dust settles.  Whether that comes in the form of no freeze or a modified freeze remains to be seen, but I urge any district thinking of going out this fall to put their efforts on the rails and make certain that their legislators know of their district's intention.

Just an aside before I move to the next subject.  As I wrote earlier, I expected a raft of amendments yesterday accompanied by a protracted debate.  The debate was long enough, but amendments did not appear in the multitude I imagined.  It got me to thinking how much social media has changed the process.  It used to be that the public's knowledge of the tax bill and its effects were, if not limited, certainly not at the level they are given the resources available to the average citizen.  People who frequent blogs, go on websites of interest, or follow Twitter have a much greater appreciation for the contents of the bill that previous generations of legislative followers.  This gives opponents of a bill an expanded platform from which they can make their case against the bill either in real time or in a manageable window to get maximum play in the public.  In brief, it's probably a lot more effective way to transmit to interested parties their angle on what is happening in respect to a given bill.  Still, I expected a few more "gotcha" type amendments to insert into negative campaign ads (that's the paradigm in which I was raised), but I think the way the debate and subsequent reaction went down is an indication of how things have changed.

Here are links to news stories on the Senate tax bill deliberations.

MNPost:  http://www.minnpost.com/politics-policy/2013/04/minnesota-senate-needs-two-tries-pass-dfl-tax-bill

StarTribune:  http://www.startribune.com/politics/statelocal/205331721.html

Pioneer Press:  http://www.twincities.com/ci_23131157/minnesota-senate-vote-clothing-income-tax-increases

MPR:  http://minnesota.publicradio.org/display/web/2013/04/30/politics/senate-dems-turn-around-tax-bill-vote-after-initial-defeat


Education Conferees Set.  The conference committee members in the House and Senate have been named.  The House conferees are:

• Representative Paul Marquart (DFL-Dilworth), House Education Finance Chair
• Representative Carlos Mariani (DFL-St. Paul), House Education Policy Chair
• Representative Kathy Brynaert (DFL-Mankato)
• Representative Will Morgan (DFL-Burnsville)
• Representative Dean Urdahl (R-Grove City)

The Senate conferees are:

• Senator Chuck Wiger (DFL-Maplewood), Senate E-12 Division Chair
• Senator Patricia Torres Ray (DFL-Minneapolis), Senate Education Chair
• Senator LeRoy Stumpf (DFL-Plummer)
• Senator Alice Johnson (DFL-Spring Lake Park)
• Senator Kevin Dahle (DFL-Northfield)

A few observations.  First, because no Republican voted for the omnibus education funding bill in the Senate, there is no Republican on the conference committee in the Senate.  A number of Republicans voted for the omnibus education bill in the House and Representative Urdahl has several provisions that he authored that are in the bill.

Representative Brynaert and Senator Dahle have done a lot of work on the assessment issue in their respective legislative bodies and they will be the key players on meshing the two bills together on that issue.  The framework of proposed changes in the assessment system is the working group report from the Minnesota Department of Education that was released near the end of 2012, but there are differences that will have to be ironed out.

Senator Stumpf's presence on the conference committee (he is no stranger to education conference committees, having served as the Senate E-12 chair for eight years) is likely because of the Senate's position on the re-establishment of the general education levy.  One of the things to watch as the education and tax conference committees begin is which target will carry the proposed education property tax relief.

Senate Passes Omnibus Education Funding Bill.  It took about nine hours, with 33 amendments offered and debated (7 adopted), and a kerfuffle during the roll call vote, but the Senate passed the omnibus education funding bill on a vote of 35-28.  No Republican legislators voted for the bill and 3 DFLers voted against it.

The main objections to the bill come from those who believe the GRAD test (or some test with a "cut score")   needs to be retained instead of being replaced with the work of the assessment working group convened by the Minnesota Department of Education last summer.  If the Republicans in both the House and Senate have settled on an issue to attack the DFL approach to education this session, it appears that it will be the proposed changes in the student assessment system.

The other issue that was targeted by the Republicans was the proposed re-establishment of the general education levy.  Several amendments were aimed at either protecting businesses from the re-implementation of the general education levy.  Another angle taken by the Republicans in the criticism of this portion of the bill revolved around the question of why this subject is being handled in the omnibus education funding bill and not in the tax bill.  Of course, as I reported yesterday, there is significant education funding in the tax bill and the cross-pollination of tax policy and education funding policy between the two bills is puzzling (at least at this stage of the debate).

Another set of amendments was aimed at the decision to delay the implementation of the teacher evaluation process passed in 2011 by one year into next biennium, when funding for the program will also be made available under this bill.  Senator Branden Petersen, chief author of the teacher evaluation bill while serving in the House of Representatives last biennium, offered an amendment that would keep implementation on the schedule adopted in 2011.  He also offered an amendment that would have eliminated the practice of "last in/first out."   As in the case of the teacher evaluation process, Petersen was the chief author of that measure.  If you recall, that was passed by the Legislature but vetoed by the Governor.  These measures, like nearly every Republican amendment, went to the legislative graveyard today.

The kerfuffle I mentioned earlier in this piece came as the final vote was being taken.  Senator Chuck Wiger, the chief author of this year's omnibus education funding bill, gave an impassioned speech both urging support and answering Republican criticism as the debate was winding down.  It is generally the tradition that the speech of the chief author is the final speech given.  Because Senator Wiger's speech hit on several points raised by particular Republican legislators, those individual legislators wanted to respond to Senator Wiger's comments.  Instead of recognizing those Senators (which may have been simply an oversight), the presiding officer called for the vote to commence.  Because debate cannot continue during a vote, the legislators who wanted to speak took umbrage with the presiding officer.  For awhile, it appeared that the entire Republican caucus would boycott the vote, but because the Senate was "under call," all Senators present must vote unless they are excused from voting.  The vote took a bit longer to execute, but after a brief delay, all Republicans who were present voted (and all voted against the bill).  Just an interesting way to finish nearly nine hours of debate and discussion.

The bill will now be sent back to the House--it is important to remember that from this point forward the omnibus education funding bill will be HF 630--where the House will move to not concur with the amendments placed on the bill by the Senate (which is in effect the Senate substituting its version of the bill for the House version).  That will result in the naming of conferees in both the House and Senate with that decision being announced tomorrow.  The respective staffs in the House and Senate will likely spend their weekend putting together analysis of each bill and side-by-side documents comparing the two bills with the conference committee beginning to meet formally next week.  It is almost the first of May (I couldn't believe it when I looked at the calendar), which leaves us just three weeks before the Legislature must adjourn.

There are a lot of differences in the overarching approaches taken by the House and Senate, but there really isn't a lot of difference in the major initiatives undertaken in each bill.  Both bills have voluntary all-day kindergarten, have stressed the basic formula over the special education formula, and contain the changes to the assessment process.  The big difference is in the overall budget target and the fact that the Senate has put so much property tax relief in their education funding bill.  In other words, once the overall budget targets are set, there probably isn't that much to fight about and the negotiations should be relatively smooth.  There is a rumor that the Governor is going to push hard for money to go into his proposed special education changes and that could complicate things, but that is merely a rumor at this point.

The Senate is taking up the omnibus education policy bill tomorrow.  Unlike the House, the Senate is passing its funding and policy bills separately.  How that works when conference committee commences will be interesting.

Omnibus Bill passes House.  After an extended floor debate which saw multiple amendments offered (with very few--and none for which a roll call was requested--adopted), the House passed the omnibus education funding bill by a vote of 80-53.  8 Republicans joined the entire DFL caucus in supporting the bill.  Most of the debate centered on the work of the assessment working group that met last summer to develop a new assessment system for Minnesota's high school students.  There has been a concerted effort over the past few weeks by opponents of the report (especially the elimination of the GRAD) to heighten concern among the public regarding the proposed changes and it showed in the buttons with the slogan "Don't Dumb Down the Diploma" worn by a number of legislators and the number of amendments related to the proposed assessment changes.  It's obvious that the DFL members took caucus positions on the amendments, keeping the more contested amendments off the bill.  Some majority members "walked" on a few amendments, but there was sufficient opposition to keep the bill "clean" (at least in the eyes of the majority).

Here is a link to the roll call votes on the amendments and the bill:  http://www.house.leg.state.mn.us/votes/votesbynumber.asp?billnum=HF0630&ls_year=88&session_number=0&year=2013

Tax Committee Takes Testimony, Amends Tax Bill, and Sends it to the Floor.  SF 552, the Senate version of the omnibus tax bill, was discussed in the Senate Tax Committee today.  Milaca Superintendent Jerry Hansen testified in favor of the Education Advancement Revenue program that is part of the bill.  As described yesterday, the Education Advancement Revenue will bring districts with less than $300/PU in referendum revenue up to that amount and will swap revenue from the newly-created component with referendum revenue in districts with more than $300/PU.  In other words, new revenue for districts with less than $300/PU in referendum revenue and tax relief for districts for a vast majority of districts with referendum revenue in excess of $300/PU.

In another matter, the tax bill was amended to include the integration levy that was not included in the Governor's budget (but was subsequently made a part of the House omnibus education funding bill).  The Senate omnibus education funding bill did not include the integration levy in its work.

Senate Education Funding Bill Expected UP Tomorrow.  Speaking of the Senate omnibus education funding bill, it is expected to be debated and approved tomorrow on the Senate floor.  The Senate is covering a number of bills this week and protracted debate on any of them could slow things down and prevent a timely approval of the bills.  It is my guess that debate on the Senate bill will center on two sets of provisions:  (1) the Senate's re-establishment of the general education levy, and (2) the assessment section that is similar to that of the House.

Senate Tax Committee Adds Education Funding Provisions.  When the Senate Tax Committee unveiled the Senate Omnibus Tax Bill--SF 552--this morning, it contained several education funding and education tax relief measures.  Senator Rod Skoe, the Senate Tax Chair, was the chief author of SFs 177 and 526  As a brief refresher, SF 177 was the bill introduced in January that doubled the referendum and debt service equalizing factors.  SF 526 was the bill that created a new funding category called Educational Advancement Revenue (EAR) that would roll in $300/PU of referendum revenue into this new category and provide districts with less than $300/PU in referendum revenue the difference between their current referendum revenue per pupil and $300/PU.  EAR would be equalized discretionary levy.

SF 552 contains much of SF 526, making EAR part of the omnibus tax bill.  The equalization factor for EAR would be $785,000/PU in referendum market value.  It's important to remember that the Senate changes the pupil weightings considerably in its bill, so it is difficult to compare this proposed equalizing factor with current law.  In terms of a "back of the envelope" calculation, it looks like an increase of 45% in the equalizing factor.

The EAR mechanism also reduces the referendum cap by $300/PU and sets a new referendum cap at 25% of the general education formula amount.  I have been unable to discern whether or not the districts currently "grandfathered" above the cap would remain above the cap.

There were no increases in the equalizing factor outside of the increased equalizing factor for EAR.  This is very disappointing to me--and I suspect a lot of SEE members--who were hoping that SF 177 would have been the centerpiece of the Senate's heralded education property tax relief proposal they have been promoting all session instead of the decision to re-establish the general education levy that is currently in SF 453, the omnibus education funding bill.  There is what I would call "backdoor" increased equalization in SF 552, as EAR is equalized at a higher rate than the first tier referendum is.  Further, the first tier remains at about its current law level, meaning that the sum of EAR and the first tier adds approximately $300/PU in heavily-equalized revenue.  The total price tag on EAR and the equalization is $83.6 million, so it is a heady amount.

All that said, higher referendum equalizing factors are still preferred to the general education levy, as the re-establishment of the general education levy does not address the property tax "yield" disadvantage experienced by low property wealth school districts.  While low property wealth school districts may get more relief in the aggregate compared to high property wealth school districts in the process that re-establishes the general education levy, this relief evaporates faster than it does in high wealth districts if and when the low property wealth district attempts to turn the relief into new referendum revenue in a subsequent election.  Policy makers who operate at the junction of education funding and property tax policy often forget that equalization is both property tax relief based on the relative wealth of the school district and "yield enhancement" also based on the relative property wealth of the district.

So, disappointments aside, SEE marshals on.  It is difficult to say how the education property tax proposals proceed.  The House Education Funding bill has an increase in the equalizing factor which provides approximately $30 million in relief and indexes the equalizing factor into the future.  The House omnibus tax bill contains no education property tax provisions.  As I've just outlined, both the Senate omnibus education funding and tax bills contain education property tax relief proposals.  All these provisions will likely find their home in either the tax bills or the education funding bills and be negotiated as part of those packages.

I will keep you posted.

There are one other interesting education property tax proposals in the Senate omnibus tax bill.  Under the bill, there would be a referendum freeze this fall.  In other words, no school district could seek to increase their referendum this fall.  Districts would be able renew existing levies, but would be limited to that amount.  Obviously, this would put a number of districts at a disadvantage, as a number are seeking to increase their levies.  There may be ways around this for these districts, but no alternative paths have been suggested at this point.  My reason for pointing this out is that I remember a similar proposal within the last twenty years when districts seeking to increase their levies during a similar freeze had to apply to the Minnesota Department of Education and could receive a waiver if they met certain criteria.  While any freeze could prove detrimental (and clearly erodes any notion of local control), at the very least those districts who can demonstrate a crucial need to seek increased referendum revenue should be afforded that opportunity.

House Education Bill Clears Next Step.  The House omnibus education funding bill passed the House Ways and Means Committee on a voice vote today after a little more than an hour of discussion and the adoption of two amendments.  Representative Tom Anzelc (DFL-Balsam Township) offered an amendment that stripped the ability for school districts to start school before Labor Day and it was adopted on a voice vote.  While not earth-shattering (nor unexpected) development, the adoption of the amendment shows once again the seeming inconsistency when a segment of the economy is pitted against the education interests of the state.  Representative Tim Mahoney (DFL-St. Paul) told an interesting anecdote.  Representative Mahoney is hosting a foreign-exchange student this school year and when the student first arrived, he was worried over how hard it would be for him to catch up with his American high school peers given the date on which he'd arrived in the United States.  In actuality, the student had arrived the first week of September and while students in his home country had been in school for three weeks, he hadn't missed a day of school in Minnesota.  Representative Mahoney's point is that we are competing in a global marketplace and yet we seem to cling to some quaint notions about the status of education in the United States (and Minnesota) and sometimes do not take the reality and nature of that competition seriously.  Folks can't complain about student achievement on the one hand and then tie school districts' hands when it comes to establishing their annual school calendars on the other.  Again, the world won't come to an end if school districts cannot start their formal school years until after Labor Day, but it's just another inconsistency that arises in the education debate.

The other amendment that was attached to the bill concerned the school climate center that is part of the anti-bullying bill.  The anti-bullying bill is also moving on its own (in fact, the Ways and Means Committee recommended the bill for passage and, like the omnibus education funding bill, referred it to the House floor at the same meeting).

The omnibus education funding bill now heads to the House floor, where it will likely be taken up early next week.

The Senate Tax Committee will be hearing the Senate omnibus education funding bill tomorrow morning.

Let's Get Philosophical.  As I was driving to the Capitol today for the House Ways and Means Committee meeting, I listened to MPR's The Daily Circuit, which featured Minnesota Education Commissioner Brenda Cassellius and Anoka-Hennepin teachers' union leader Julie Blaha (also a member of the Governor's Education Finance Working Group).  The discussion centered on testing and how the proposed changes to Minnesota's testing regimen will go a long ways toward delivering more meaningful assessment of student achievement that will be more helpful than the current system for students, parents, and educators.

Here is a link to the discussion:  http://minnesota.publicradio.org/display/web/2013/04/18/daily-circuit-standardized-testing

Interesting Proposal in the House Bill.  I'm sure we will all hear more about this as the education funding bills march toward final passage and make their way into the conference committee, but one of the more ambitious proposals in either bill is found in Article 2, Section 15, of HF 630.  The proposal is entitled Minnesota's World's Best Workforce and it incorporates the Centers of Excellence proposed in the Governor's budget into a framework of goals, incentives, and penalties that would govern a wide range of education achievement activities in Minnesota.  There's a lot of "mays" and a few "musts" in the language of the proposal.

The goals of the proposal are straightforward.  They are:

1. Closing the achievement gap between all racial, ethnic, and economic subgroups,
2. Achievement of a 100% graduation rate,
3. Achievement of 100% of grade-level literacy at the third-grade level, and
4. Having 100% of students college and career ready by graduation.

Healthy set of goals, no doubt, and here is a description of the proposed process to reach those goals.  Under the proposal, all school districts "must formally develop, implement, and periodically review and, where appropriate, revise a comprehensive, long-term strategic education and budget plan for student achievement premised on research-based strategies . . ."  Whew!  That is the primary must in the proposal and a mighty big and comprehensive must it is.

Things lighten up a bit when it comes to the "how" in the language.  The "must" turns into "may" and districts have options on which methods to employ in pursuit of the achievement goals outlined in the proposal, with the caveat that district plans "must include at least formative assessment practices, consistent with Chapter 120B (the academic standards chapter that will likely be revised if the math GRAD is eliminated and replaced with the proposed college and career ready standards), and other instructional best practices that inform cost-effective, research-based interventions, improve student achievement, reduce disparities in students' academic performance, and foster students' career and college readiness without need for postsecondary remediation."  The measurement of the student outcomes is fairly prescriptive and the status of the district's efforts must be reported to the public on at least an annual basis.

It's here where things get a little dicey under the proposal, as failure to reach achievement goals could result in a reduction of revenue (a maximum of 4% reduction per fiscal year) or, in the worst case scenario, result in a school turnaround plan being forced onto the buildings at which students are consistently failing to reach achievement goal.  The responsibility for handing out these punishments (hard to call them anything else) would be the Commissioner of Education along with the Regional Center of Excellence in which the affected school district is located.

This is a pretty sizable mandate (if meeting academic standards can actually be labelled a mandate; it's more like a reasonable expectation) with a lot of planning and reporting to accompany the outlined goals.  No question this is an ambitious proposal that marks, if not a sea change in the learning and assessment world, a considerable departure from the current system.  I don't imagine this proposal will mollify all who decry the elimination of the math GRAD (I just saw a television commercial urging folks to call their legislators and tell them to not repeal it), but it may produce a system that is more applicable to the challenges being faced by students and the entities that serve them.  The proposed penalties are troubling and determining who will be penalized is also a bit on the murky side, but there may be an opportunity here to do some good things and it will be interesting to see how this proposal is received by the Senate and the Governor as the conference committee commences next week.

Recap from Yesterday.  The House and Senate omnibus education funding bills passed their respective hurdles yesterday, although (as reported yesterday morning) the Senate bill took a more serpentine path to approval in the Senate Finance Committee.

After the Senate Finance Committee passed an amendment on a 10-9 vote to delay implementation of the teacher evaluation process by one year, things kind of fell apart and the debate disintegrated considerably.  There were several attempts to re-refer the bill back to the Education Policy Committee, but those efforts were not successful.  Then, there was some concern expressed about the lack of fiscal notes for several provisions in the bill.  Fiscal notes are prepared for individual bills as they move through the legislative process, but when those individual measures are incorporated into the omnibus bills, the fiscal tracking sheet that shows the proposed appropriation level for each program within the bill has traditionally served as the fiscal note.  That explanation wasn't enough for some members, which extended the debate to an extent the committee had to recess so legislators could go to floor session.

After the floor session concluded, the Finance Committee re-convened.  There was an attempt to reconsider the amendment to delay implementation of the teacher evaluation process.  That attempt failed on a tie vote and after that, there was brief debate and the bill passed on a voice vote.  It will now be up in the Tax Committee later this week (Friday likely).

The House Tax Committee approved the House omnibus education funding bill with very little debate.  At these hearings, the debate is usually limited to portions of the bill that is under the jurisdiction of the committee considering the bill.  In other words, the Tax Committee was only looking at the tax policy contained in the bill.  This took all of about five minutes.  It kind of went like this:  (1) Integration Levy re-established?  Check.  (2) Referendum Equalizing Factor increased to ensure bill doesn't create property tax increase?  Check.  (3)  Anything else?  Nope. Then I guess we'll recommend the bill to pass and send it to the Ways and Means Committee.  And that was that.

The House bill's next stop will be the House Ways and Means Committee with the hearing scheduled for Thursday, April 18, at 10 AM.

Education Bills Moving Today.  The omnibus education bills in both the House and Senate are at their appropriate stops this morning.  I am sitting in the Senate Finance Committee watching them consider SF 453.  The House Tax Committee will be hearing HF 630 momentarily and in the absence of immediate legalization of cloning, I'll have to run between committees..  There likely won't be a lot of action at either of these venues as these committees tend to review the bills for their macro-effects and not particular policy initiatives.  While that isn't always the case, I haven't heard any rumblings that consideration of any changes are afoot.  I'll be back later with some other observations.

EDIT 1:  Shows you how much I know.  The Senate Finance Committee is embroiled in a discussion over whether or not to delay implementation of the teacher evaluation process passed in 2011 by one year, from the 2014-2015 school year to the 2015-2016 school year.  I'm trying to calculate the reason for the proposed delay, but most likely it's because as the Senate bill currently stands does not include a line-item appropriation for the teacher evaluation process as in the Governor's bill.  Not wanting to foist an unfunded mandate on school districts (at least this unfunded mandate), it is my guess that the Senate wants to delay the teacher evaluation process until money is available.  Teacher evaluation will obviously cost money (estimates vary but go as high as almost $200 million per year) and districts not participating in the alternative compensation will especially be under duress as they try to implement this process.  Opponents to the delay are stressing that the delay is a policy issue and that the Senate Finance Committee should be involved only in the level of appropriations in the bill.  That has basically been the tradition over the years (especially in the recent past) but at the same time, there are fiscal implications as to whether or not the teacher evaluation process should proceed without a corresponding appropriation for that purpose.

EDIT 2:  The amendment to delay the teacher evaluation process by one year passed on a 10-9 vote.

And now we are back to discussion to the bill as a whole.

House and Senate Education Committees Finish Their Work.  It was a busy Thursday for both the House and Senate education finance-related committees as they finished up their work on their respective versions of the 2013 omnibus education funding bill.  The House actually had to come back this morning after adjourning last evening shortly after 10 PM to finish its work.  The Senate finished around 9 PM Thursday evening after being in committee session for about six hours.

I posted the high points of the House bill in Tuesday's post and I will do the same for the Senate (SF 453) here.  It's a bit difficult to totally "decode" the Senate bill because there are more moving parts due to their acceptance of the recommendations of the Governor's Education Finance Reform Working Group and their counting of the continuation of integration revenue as new money.  The bill also re-establishes the general education levy by combining three levy categories (safe schools, operating capital, and equity) and reducing the resulting sum by $150 million in property tax relief.  This is the $150 million in property tax relief that I thought would find its way into the bill in the form of referendum and debt equalization and I think everyone in every room of the Capitol and State Office Building knows that.  But, 'twas not the case (at least at this point in the discussion).  More on that later.

Here are the major initiatives in the Senate bill:

• Governor's recommendation of $52 increase in basic formula amount for next year with no increase in the second year of the biennium.  Formula amounts are $5,276 for 2013-2014 and $5,687 for 2014-2015.  Second year amount is adjusted upward due to changes in pupil weightings.
• New pupil weights beginning in 2014-2015.  1.0 for kindergarten students in all-day program, 0.55 for kindergarten students in half-day program, 1.0 for students in grades 1-6, and 1.2 for students in grades 7-12.  The 1-6 and 7-12 weights are the same as in recommendation of the Education Finance Working Group.  Marginal cost pupil units are eliminated and new declining enrollment aid established to buffer districts experiencing declines in student counts.
• Funding for all-day kindergarten beginning in the 2014-2015 school year.
• Change in equity formula with factors eliminated and replaced by a sliding scale based on a district's amount of referendum revenue and the distance of that amount to $2,000 per pupil.  Benefit delivered on a sliding scale with maximum benefit of $100 per pupil.
• Creation of basic supplemental revenue category (not new money) of $56 per pupil that is combined in tandem with the new equity formula to mimic the previous equity formula.
• Expanded transition revenue for hold harmless purposes.
• $22/PU of revenue for non-alternative compensation districts for teacher evaluation beginning in the 2015-2016 school year.
• Special education appropriations at current law (including growth factors) for the coming biennium.

If you read through the bill, there are a couple of numbers (and sentence constructions) that pop out.  The numbers are $411/PU and $826/PU.  Here is the reason for those numbers.  In 2001, as part of the Ventura administration's Big Plan, $415/PU was rolled into the general education formula basic amount from the referendum.  The constituted a misleading increase in the general education amount and $415/PU was subtracted from the basic amount when it was used as a multiplier for the compensatory, sparsity, and transportation sparsity programs.  With the change in pupil weightings, another revenue neutral increase in the basic formula is produced, requiring a subtraction of $411/PU to have an apples-to-apples formula value for the multiplier.  In this bill, the subtraction from the basic amount is $826/PU ($415/PU + $411/PU) for the compensatory program and simply $411/PU for the sparsity and transportation sparsity programs.

I would be remiss if I didn't express my disappointment that the committee did not pursue Senator Skoe's SF 177, which called for healthy increases in the referendum and debt service equalization programs, instead of re-establishing the general education levy.  Both these initiatives propose to deliver $150 million in education-related property tax relief and it's not like low property wealth districts won't get a lion's share of the benefit under either proposal.  The problem is that the general education levy approach does nothing to address the disparity in revenue between high property wealth and low property wealth school districts.  It can be argued that low property wealth school districts can use the "space" they get from the property tax relief to attempt to pass additional referendum levy authority, but so will a number of high property wealth districts.  Further, even if a low property wealth district can pass a referendum with the eroding value of the equalization program, the effort in low property wealth districts goes half as far as it does in high property wealth districts.  In other words, the property tax benefit of the general education levy to low property wealth districts will evaporate twice as fast as it will in high property wealth districts.

What often gets lost in the conversation is that equalization is both property tax relief and "tax power" enhancement.  Bringing back the general education levy without doing anything about the equalization factors won't do anything to remedy the property tax wealth disparities that exist between school districts and result in considerable differences in referendum revenue and educational opportunity.

I'm sure this will be discussed again as the session continues.

The education funding bills will likely reach the floors of their respective legislative houses by next week.  Both bills will make their next committee stop next Tuesday (Finance Committee in the Senate, Tax Committee in the House) and I wouldn't be surprised if they made their final committee stops (Taxes in the Senate, Ways and Means in the House) by the end of next week.  I will keep you posted.

House Releases Omnibus Education Funding Bill.  It's only on-line at this point for all of us junkies to gawk at, but the House has made public its omnibus education funding bill for the 2013 legislative session.  The links for the bill and data runs can be found on this page:

Link:  http://www.house.leg.state.mn.us/comm/committee.asp?comm=88006

To access the documents, go to the far right-hand column and scroll down to meeting notice for Wednesday, April 10.  Below, you will find the links to the bill, the appropriation and levy sheets, and the district-by-district data run.

There are  few surprises in the bill and some noted departures from the Governor's bill.  First, the basic formula takes center stage in both years of the biennium, with a proposed increase of $104/PU next year and an increase of $105/PU the year after.  This translates to roughly a 2% increase in the basic formula amount in each of the next two years.  This proposal goes well beyond what the Governor proposed (2% in the first year and an additional 0% in the second) and while the House target is more than $200 million more than the Governor/s, the House bill had to forego or delay a number of the Governor's recommendations.

The bill also raises the kindergarten weighting to 1.0 for kindergarten students in an all-day kindergarten program.  The weighting does not reach the 1.115 weighting for students in grades 1 through 3, but it is considerably larger than the 0.7 weighting proposed by the Governor.

The bill also increases the equalizing factor for the referendum levy, setting it at 122% of statewide average referendum market value.  Under current law, this would be approximately $573,000/PU, an increase of about $76,000 per pupil in the equalizing factor.  This value would change at both the local and state level due to the increase in the pupil weighting for kindergarten students in the House bill.  It will make every district and the state look a little "poorer" in terms of property wealth (the same aggregate property wealth divided by a larger denominator will result in a smaller value).  The proposed value after the pupil weighting change would be around $520,000/PU, but remember, the statewide average will be dropping as well so the aid-to-levy ratio will increase, making it a good move for low property wealth districts.

Districts with referendum revenue per pupil of less than $300/PU will be brought up to that amount through changes proposed for the state's equity program.  A similar provision was part of the recommendations of the Governor's Education Finance Working Group, but was not included in the Governor's budget.

Another way the House was able to fund its ambitious set of proposals was to delay (and somewhat reduce)  the implementation of the Governor's increase in special education.  The House adopts the framework of the Governor's proposed formula (a base formula, people weightings for three sets composed of different disability categories, and an excess cost formula).  This proposed increase will have to be included in the planning estimates for the next biennium if it is adopted in its current form.  The Governor's proposal cost $122 million (actually closer to $150 million by some calculations) and it will be interesting to see the price tag on the revised proposal.

Other highlights (or deviations from the Governor's budget) include:

• Elimination of 11th grade math GRAD test and replacement with requirements developed by last summer's task force.
• No revenue stream for teacher evaluation.  Teacher evaluation costs become an eligible expenditure within the 2% staff development set-aside.
• Re-establishment of the integration levy (now the Achievement and Integration Revenue Program) eliminated by the legislature in 2011.
• No significant changes to the equity revenue program other than the formula component for districts with less than $300/PU in referendum revenue.
• No change in the debt service equalization program equalizing factors.
• School can start before Labor Day but cannot be in session the Thursday and Friday immediately preceding Labor Day.
• Districts can use compensatory revenue for pre-kindergarten programs.
• $56 million in early childhood scholarships.

There are obviously a number of other provisions and I urge you to contact me with any questions you might have after reading the bill or hearing things through the grapevine.

The committee will be going through the bill tomorrow with Thursday (and Friday, if necessary) dedicated to amending the bill.  It is the committee's intention to have the bill out of committee and on its way to the  Tax Committee by the end of the week.  I urge you to check the House web page for live video if you are interested in watching the proceedings live.

It appears the Senate will be releasing its version of the bill on Thursday.

The Eagle Lands Tomorrow.  At least one of the two eagles lands tomorrow, as the House will be releasing its version of the omnibus education funding bill on-line sometime late tomorrow afternoon.  About the only inkling of what the bill will contain is that it has been announced that some improvement to the kindergarten weighting will be included in the bill and that there will be money for early childhood scholarships.

The Senate may also release its version of the bill tomorrow, although it appears there has been a bit of a slowdown as they put their bill together.  One of the rumored points of contention in the Senate is the method that will be used to deliver the $150 million in property tax relief that is part of the Senate's education funding target.  Several different approaches are being discussed, most notably SF 177 (Skoe), which delivers the relief through increases in the equalization factors for the referendum and debt service levies (along with a $300/PU discretionary levy for districts with less than $300/PU in referendum revenue and a corresponding reduction in the referendum cap) and SF 1142 (Stumpf) that would re-establish the general education levy that was eliminated in 2001 as part of the Ventura Administration's "Big Plan" and deliver the property tax relief through that vehicle.

We wait with bated breath and I will pass along the links and documents when they are posted.  Stay tuned.

General Education Levy Heard.  SF 1142 (Stumpf) was heard this morning in the Senate E-12 Funding Division.  This bill is a modified version of the consolidated levy proposal that Senator Stumpf has crafted at several junctures during the past decade.  Under that framework, the operating capital, equity revenue, and transition revenue programs are rolled into a new general education revenue program that will be funded with aid and levy.  What is different about this bill is that after it was amended today, is that it proposes to use the Senate's $150 million target to buy down education levies and uses that to reduce levies for all districts in the state of Minnesota.  In a somewhat related provision in the bill, the alternative compensation program (QComp) is rolled out of the general education program and funded by aid and levy outside that program.

Two points in all of this:  (1) the bill only provides new revenue for a handful of districts.  It does not provide any new money to all districts through an increase in the general education formula, and (2) it does not target the property tax relief toward low property wealth school districts.  While low property wealth districts are treated a bit more advantageously than a district with higher than average property wealth, the referendum levy remains at its current level of equalization, which creates problems for school districts.  I testified in favor of the bill's concepts, but pointed out that the legislation does nothing to narrow the gap between high and low revenue districts and because it does not put significant new revenue into the system, reliance on the referendum levy will not be lessened.  Because there will still be revenue issues, districts will continue to seek additional revenue through voter-approved levies and that system remains both random and inequitable.  So, in short, it would be nice to bring back the general education levy, but if all one does is bring it back without improving the aid/levy situation in low property wealth school districts and/or narrow the revenue gap between high and low revenue districts, the question must be asked, "What are you getting for $150 million?"

This reminds me of the points we made with the Ventura Administration in 2001 when the general education levy was eliminated.  The general education levy was the fairest levy and SEE's point in that discussion was leave the "best" levy alone and improve the levies that were becoming increasingly inequitable.  Doing the exact opposite, as suggested in the latest version of SF 1142, still doesn't address the issue of inequity that exists in the referendum and debt service levies.  Not bad policy, but policy that ignores the biggest problem facing low property wealth school districts.

Money Proposed for Teacher Evaluation.  The Senate E-12 Division also heard SF 1477 (Clausen), a bill that would provide revenue for districts to fund the teacher evaluation process that will be taking the effect in the 2014-2015 school year.  The bill differs from the $20 million the Governor proposed for this effort in a couple of respects.  First, it appears that districts that receive money under the current alternative compensation program (QComp) that would be ineligible to receive money under the Governor's proposal would be eligible under SF 1477.  Further, the money would be distributed on a per teacher as opposed to a per student basis.  There is no specific amount appropriated in the bill, but it's great to see this being in the discussion for this session.  The teacher evaluation is a huge mandate and any revenue injected into the system to help alleviate the burden that this mandate--and worthy as it may be--will inflict on districts throughout the state.

Back to Biz.  The Legislature returned to work this morning after its Easter/Passover break and things picked up where they left off.  The policy committee deadline has passed and its pretty much going to be all about the budget from this point forward at the committee level. A number of measures of interest (gay marriage, gun control, anti-bullying, etc.) made their policy committee deadlines and are now on the floors (or in an appropriations committee) of their respective houses.

For education, the focus now turns to the E-12 Division in the Senate and the Education Finance Committee in the House.  Both of those panels met today.  The House Education Finance Committee spent its time discussing the House version of the omnibus education policy bill that cleared the House Education Policy Committee right before the holiday break.  The biggest topic of conversation today was the proposed elimination of the 11th grade MATH grad test and its replacement with a new set of measurements to determine eligibility for graduation.  The sections of the bill relating to this subject were largely developed by a task force convened by the Minnesota Department of Education last summer.  The report of the task force can be found at this page on the MDE website: http://education.state.mn.us/MDE/Welcome/AdvBCT/AssessAccountWorkGroup/index.html

The House committee adopted a couple of technical amendments, but these provisions will be discussed once again next week when the policy bill will be melded with the portions of the bill relating to education finance.

The Senate spent its meeting time discussing proposed changes to the integration revenue program.  The program looks similar to what was proposed in the Governor's education finance working group, with the focus of the program being refocused toward achievement as opposed to the movement of students.  Further, revenue (all aid as the levy portion of the program has been eliminated with Pay 13 being the last year the levy will be collected unless it is re-established this session) will be based on students of color and not all students in the district.  There are few differences between the House and Senate versions of the bill and what was proposed by the Governor, so this is one area where agreement should be relatively easy to reach.