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Dayton proposal includes extra $371 million for MN public schools

Brenda Cassellius, commissioner with the Minnesota Department of Education, presented Gov. Mark Dayton's budget proposal to the House Education Finance Committee Wednesday, Jan. 25, 2017. (Forum News Service photo by Maureen McMullen)

ST. PAUL—New funding for education makes up a weighty portion of the more than $1.9 billion in new spending Minnesota Gov. Mark Dayton proposed in his two-year budget.

The plan would add $371 million in funding for public schools through 2018 and 2019. The extra dollars would increase the state's spending per pupil by 2 percent each of the next two years.

This means the state would boost its spending on each public school student by $121 to $6,188 on average in 2018 and $124 to $6,312 in 2019. If legislators would approve it, which is far from certain, the plan would mark the fourth and fifth consecutive years the state's per-pupil formula receives a 2 percent increase.

But Minnesota still lags nationally in funding for public schools.

The state recently earned a D grade for per-pupil education funding in a nationwide ranking by Education Week, as noted by Dayton in his State of the State speech Monday, Jan. 23.

The amount the state spends on each student in Minnesota plummeted 10.6 percent between 2003 and 2013, and it has yet to catch up.

Although increases to the per-pupil formula have exceeded inflation since 2014, Minnesota's per-student spending for the past 14 years has not made up for the lost dollars since 2003.

For the 2017 fiscal year, the amount sits at 8.5 percent, or $562, less than the 2003 amount.

The 2 percent increase proposed for 2018 and 2019 is just shy of the 2.4 percent inflation rate expected for each year.

Tom Melcher of Minnesota Education Department said the state will need to increase the formula further to offset the decade-long drop.

"It's not going to close that gap, it's going to keep us essentially even with the rate of inflation," he said.

Although the increase will fall below inflation, state Education Commissioner Brenda Cassellius said it would provide schools a "step forward to fortify their budgets."

Per-pupil funding from the state can vary among school districts. Some districts will receive more funding than others for criteria like high numbers of low-income families, students learning English as a second language and students with disabilities.

"Your student population depends on how much money you get, but the general education per-pupil formula, that's dollar-for-dollar," Cassellius said. "That goes out to everyone equally."

For schools in rural Minnesota with fewer students, a lower amount of state funding and fewer opportunities to levy money through property taxes can strain finances.

Senate Minority Leader Tom Bakk, D-Cook, recently introduced a bill that would change the formula to fund small, rural schools "a little more preferentially."

The bill would modify the spending formula to include an additional $29 million from the General Fund for about 200 schools throughout the state with fewer than 1,500 students.

This would add about $71 to the schools' per-pupil funding formula, which could provide some schools with upwards of $100,000 in additional funding.

The bill would enact a permanent change to the formula, which would adjust with inflation.

Despite a tense start to the legislative session, preceded by public clashes between Republican House Leader Kurt Daudt and Democratic Gov. Mark Dayton, Bakk's bill has drawn support across the aisle.

Senate Majority Leader Paul Gazelka, R-Nisswa, is among four Republicans listed alongside Bakk as authors of the bill.

Legislative "leaders usually don't put their names on a lot of bills because it sends a pretty strong message to everyone else in the building," Bakk said. "It takes the kind of issue that really has no partisanship in it."

Dayton's budget proposal also aims to boost other K-12 programs facing financial struggles like special education. The plan includes $40 million in additional funding to chip away at the "cross-subsidy" schools face as they shift money from their general unreserved funds to cover deficits in special education.

The extra funding for special education, Melcher said, would reduce the cross subsidy by about 3 percent, or $20 million for 2018 and later.

The plan also includes $68.5 million to cover the cost of a raise in employer contributions to teachers' pension schools are expected to pay to stabilize retirement funds.

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