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K-12 Education Finance Presentation K-12 Education Finance Division Minnesota House of Representatives.

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Presentation on theme: "K-12 Education Finance Presentation K-12 Education Finance Division Minnesota House of Representatives."— Presentation transcript:

1 K-12 Education Finance Presentation K-12 Education Finance Division Minnesota House of Representatives

2 Highlights of 08 Session For FY09: Added $51 per pupil unit to each districts general education revenue Authorized one-time fund transfer of up to $51 per pupil unit from reserved for operating capital account to general fund balance Increased maximum lease levy from $100 to $150 per pupil Authorized levy to replace funds lost due to Local Collaborative Time Study audit 5/28/08Minnesota House of Representatives2

3 Highlights of 08 Session For FY 2010 and later: Removed general education aid offset of Permanent School Fund (PSF) money –provides school districts with added $30 million annually, roughly $36 per resident student (about $30 per AMCPU). 5/28/08Minnesota House of Representatives3

4 5/28/08Minnesota House of Representatives4 Education Finance Reform Process & Background Governor Pawlenty convened a task force in the fall of 2003 to examine Minnesotas education funding system. The task force developed school finance data based on professional judgment panels. The task force issued an initial report in the summer of 2004 and then disbanded. P.S. Minnesota was formed to carry on the work of the task force. P.S. Minnesota is non-partisan coalition of Minnesota education and parent groups united to advocate for adequate and sustainable public education funding. P.S. Minnesota convened a series of meetings, and working with a consultant, interested school groups, and citizens, developed an education funding framework based on nine characteristics. The 2007 Legislature established a school funding task force consisting of the Commissioner of Education and House and Senate members to further study Minnesotas school finance system and build on the recommendations of P.S. Minnesota. Even though the funding for the task force was vetoed by the Governor, the school funding task force held several meetings but never officially adopted a report. The legislative co-chairs of the task force, Representative Mindy Greiling and Senator Terri Bonhoff, introduced HF 4178/SF 3828 toward the end of the 2008 session, reflecting their views of how the P.S. Minnesota funding characteristics could be implemented.

5 5/28/08Minnesota House of Representatives5 HF 4178 Goals Adequate funding for all public school students Equitable funding formulas More fair funding system Simplified funding system Scalable to allow for phase-in over time

6 5/28/08Minnesota House of Representatives6 HF 4178 Characteristics Sets basic per pupil formula high enough to cover districts basic instructional needs while having other component formulas match specific additional needs Fully funds states share of special education costs Increases options for school district facility needs Restores equalization in school property tax system

7 A Closer Look at HF 4178 Funding Formula Details 5/28/08Minnesota House of Representatives7

8 5/28/08Minnesota House of Representatives8 All Students Counted as 1.0 All students – including kindergarteners – count as 1.0 pupil. Ends current pupil weighting by grade level. Continues to fund school districts and charter schools based on number of students served, not on number of pupils resident to the district.

9 5/28/08Minnesota House of Representatives9 Basic Formula Allowance Increased Increases basic formula allowance from $5,124 per adjusted marginal cost pupil unit to $7,500 per adjusted pupil. Indexes basic formula allowance to rate of inflation, as measured by the GDP implicit price deflator for state and local services.

10 5/28/08Minnesota House of Representatives10 Compensatory Revenue Provides additional funding to schools that serve students from low socioeconomic backgrounds. Expands with all students eligible for free or reduced meals generating an added $2,500 (33% of the formula allowance). Concentration factor increases maximum compensatory revenue to 40% of the formula allowance. Concentration calculated on a district level, not a site level.

11 5/28/08Minnesota House of Representatives11 Limited English Proficiency Revenue Expanded Links LEP funding amounts to the basic formula allowance. Sets new LEP formula equal to the total uncapped LEP count times 20% of the formula allowance. Eliminates current LEP funding limit of 5 years for any one student.

12 5/28/08Minnesota House of Representatives12 New Declining Revenue Formula Creates new component of general education revenue called declining enrollment revenue. Revenue equals the greater of zero or formula allowance times the difference between the three-year average enrollment and the current year enrollment. Under current law, a portion of a single years loss in enrollment is built into each districts pupil count.

13 5/28/08Minnesota House of Representatives13 Location Equity Index Revenue Established Location Equity Index (LEI) increases funding for school districts in counties with above-average cost of living as measured through wage and housing data. Sets the formula equal to 50% of the basic formula allowance times the greater of 1.0 or the county index for that school district.

14 5/28/08Minnesota House of Representatives14 Sparsity Revenue Modified Goes to small, geographically isolated school districts. Lowers the minimum sparsity distance from 19 to 15 miles. Keeps requirements that qualifying schools both serve a small number of students and are a minimum distance from the next nearest school.

15 Innovation Revenue Established 1.5% basic revenue reserve created To fund research-based practices that improve student academic performance Districts not making adequate progress file plan with MDE commissioner for use of revenue 5/28/08 Minnesota House of Representatives 15

16 Other Reserves 1% for Gifted & Talented programs. 0.5% for added career & technical programs (in addition to the current levy). Maintains existing reserves for basic skills programs; operating capital; staff development. 5/28/08Minnesota House of Representatives16

17 5/28/08Minnesota House of Representatives17 Streamlines General Education Revenue Eliminates the following revenue components: T&E (training and experience); Equity; Transition; Pension offset; Gifted & Talented; Q-Comp.

18 5/28/08Minnesota House of Representatives18 Referendum Revenue Offset Created Offsets $500 per pupil of each districts referendum revenue and adds $500 per pupil to each districts general education revenue.

19 5/28/08Minnesota House of Representatives19 Special Education Revenue Removes statewide special education basic revenue cap so each school district receives from the state the full formula amount of 68% of its eligible special education costs. Removes statewide cap on excess cost revenue.

20 Pupil Transportation Needs Creates new hazardous pupil transportation aid –Districts determine hazardous conditions –Total aid limited to not more than 20% of districts to and from transportation costs State aid of 5% of districts total transportation costs for bus purchase.

21 5/28/08Minnesota House of Representatives21 School Facility Needs Authorizes every school board to levy for the cost of deferred maintenance needs (now only the very largest school districts can do so). Increases debt service equalization aid. Provides an agricultural school bond credit to lessen the impact of school building projects on agricultural lands.

22 5/28/08Minnesota House of Representatives22 Property Tax Reductions Enhanced equalization levels established for the major school funding formulas Equalizing factors indexed to the statewide growth in tax base. School taxes reduced by eliminating levies for operating capital, equity, transition, and Qcomp, by enhancing equalization levels, and by offsetting $500 per pupil of referendum revenue.

23 5/28/08Minnesota House of Representatives23 General Education Components Current Law vs. HF 4178 ComponentCurrent Law (in thousands) HF 4178 (in thousands) Revenue Increase (in thousands) Basic Revenue4,886,7856,153,3061,266,521 Extended Time Revenue55,63489,88634,232 Compensatory Revenue346,726661,046314,320 LEP Revenue40,30480,31640,012 T&E Revenue1,7670-1,7670 LEI Revenue0155,962 Operating Sparsity22,59633,01810,422 Transportation Sparsity60,96376,53815,575 Operating Capital194,812189,769-5,043 Equity94,9500-94,450 Referendum Offset Revenue0410,220 Gifted and Talented11,4450-11,445 Gifted and Talented Reserve0$61,533 Declining Enrollment Revenue073,450 Transition Revenue29,7450-29,745 Pension Adjustment-30,692030,692 Referendum Revenue724,239313,904-410,338 Q-Comp Revenue92,9790-92,979

24 5/28/08Minnesota House of Representatives24 Online Resources HF 4178, the proposed amendments, and a district-by-district spreadsheet of proposed revenue by school district are available online by searching House File 4178 on the Minnesota House of Representatives websites home page or by going directly to the following webpage: session_year=2007&session_number=0 Detailed descriptions of Minnesotas current school finance system can be found here: and here:

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