INCREASED EQUALIZATION Property Tax Relief Enhanced Opportunity for Students + =

The Problem … State funding has not kept pace with increasing costs and rising inflation School districts rely on school levies to maintain basic educational opportunities. ▫ This equates to higher local property taxes Local school levies are not equal ▫ Taxpayers pay more or less for the same school levy dollars depending on where they live 2

The stability of a republican form of government depends mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state. Minnesota Constitution Article XIII, Section 1 Education Funding IS a State Constitutional Mandate 3

History of the Basic Formula School Year Actual Basic Formula Allowance Dollar Increase "Perceived " Percent Change * Roll-ins and Adjustments Actual New Dollar Increase "Real" Percent Change in Formula $3, $3,050$00.0% $00.0% $3,050$00.0% $00.0% $3,150$1003.3%$100$00.0% $3,205$551.7% $551.7% $3,505$3009.4%$300$00.0% $3,581$762.2% $762.1% $3,530$792.2%$130-$51-1.4% $3,740$2105.9%$43$1674.5% $3,964$2246.0%$67$1183.0% $4,068$1042.6% $1042.6% $4,601$ %$429$1182.6% $4,601$00.0% $00.0% $4,601$00.0% $00.0% $4,783$1844.0% $1844.0% $4,974$1914.0% $1914.0% $5,074$992.0% $992.0% $5,124$491.0% $491.0% $5,124$00.0% $00.0% $5,124$00.0% $00.0% $5,174$501.0% $501.0% $5,224$501.0% $501.0% $5,302$781.5% $781.5% $5,831$ %$424$ % $5,948$1172.0% $ % Perceived Average 3.0% Real average 1.4% Real Inflation 3.0%

The Basic Formula Has Not Kept Up With Inflation The basic formula provides the majority of the funding that districts receive from the state 5 86% of our state general education funding comes from the basic formula.

Yet while funding lagged - mandates increased... Teacher Development and Evaluation No Child Left Behind Special Education Mandates Proficiency Testing GRAD Standards Transportation English Language Learning Health and Safety Mandates Physical Education HIV/AIDS Sex Education Drug/Alcohol Abuse Education Bus Safety Title 1 Programs

Special Education Requirements The “Individuals with Disabilities Education Act” (IDEA) 1975 brought over 1 million children who were previously kept at home or in institutions into the public school system. Neither the Federal Government or the State has ever paid the excess cost of providing mandated services to our special education children.

Special Education Cross-Subsidy (unfunded cost)

Districts rely on voter-approved school levies School levy revenue is primarily generated by local property taxes The state allows school districts to raise an additional $2,294 per pupil for general education revenue through several voter-approved or board–approved levies. The cost to the taxpayer “per levy dollar” is based on the individual property wealth of each district, which varies greatly across the state ▫ Without significant commercial and industrial property to broaden the tax base, taxpayers in mostly residential school districts can pay two or three time more for the same amount of revenue for their schools than taxpayers in high wealth districts. 9

Opportunity Gap - Annual cost to residential taxpayer for a $2,294 per pupil levy per $100,000 assessed value: Where do you live? Hopkins$172 St. Louis Park$205 Edina$226 Eden Prairie$244 Stillwater$255 Lake Superior$261 Winona$291 Annandale$418 Rockford$421 Monticello$438 Elk River$447 Anoka-Hennepin$452 Buffalo-Hanover-Montrose$459 Delano$464 Big Lake$491 Dassel-Cokato$613 St. Michael-Albertville$637

Equalization is for Students and Taxpayers The intent of equalization was to make the cost of a school levy dollar uniform across the state so ALL districts have the same ability to raise school levy revenue for their students It's a "match" of state aid to provide tax relief for citizens in low property wealth districts Calculation of the state aid/local levy split: The equalization factor has not been adjusted to keep up with inflation. % Levy = District’s referendum market value per student $476,000 (equalizing factor) 11

Annual cost to residential taxpayer for a $2,294 per pupil levy per $100,000 assessed value IF fully equalized. Increased Equalization Equals Taxpayer Fairness + Enhanced Opportunity for Students Hopkins$172 St. Louis Park$172 Edina$172 Eden Prairie$172 Stillwater$172 Lake Superior$172 Winona$172 Annandale$172 Rockford$172 Monticello$172 Elk River$172 Anoka-Hennepin$172 Buffalo-Hanover-Montrose$172 Delano$172 Big Lake$172 Dassel-Cokato$172 St. Michael-Albertville$172

What can you do? or call your state legislators and share your concerns. Receive SEE’s electronic legislative updates and action alerts. ▫ Sign up online, For more information, go to All public school children must have equal access to a high quality education regardless of where they live in Minnesota! 13