Legislature's $485 million windfall for schools not reflected in new district budgets

Art classes won't be restored at Lakeville elementary schools next year. Some Eden Prairie schools will be down several clerks and teacher aides due to a $4.3 million shortfall. And in Stillwater, school administrators are contemplating a four-day week.

Most Minnesota school budgets finalized this month reflect financially conservative times even in the wake of a $485 million new cash windfall granted by legislators in what many have dubbed "the education session."

While school advocates applaud that significant financial boost over the next two years, they say it will take much more to compensate for decades of flat funding and the Legislature's longtime practice of balancing the state budget by withholding payments to schools.

In fact, many schools already have plans to go to the voters in the fall and ask for more money to help pay for basic operations.

"Districts have been running lean and they will continue to run lean," said Brad Lundell, executive director of Schools for Equity in Education, a consortium of 62 poor school districts seeking changes to the way the state finances education by relying on property values. "Not a lot changes this year."

Almost one-fourth of new money approved this session will fund all-day kindergarten throughout Minnesota. It's a move that's been on schools' wish list for decades as studies show full-day kindergarten programming helps boost future school success and close achievement gaps.

But that money — along with almost $30 million in special education aid and new dollars generated by changes in the state tax bill that will benefit schools unable to pass a referendum — won't flow into school coffers until fiscal year 2015.

"The bottom line is — and it's something we need to have a more open debate on — is that we don't have an expenditure problem. We have a revenue problem," said outgoing Brooklyn Center Superintendent Keith Lester. "That's true of many schools in Minnesota."

The most immediate bump in funding that all schools will receive this year comes from the general education formula, which currently provides schools $5,224 per pupil. Schools will receive a 1.5 percent increase each year — $78 extra dollars this year, and $80 next year as a result of the most recent legislative changes. That's the highest percentage increase in the general formula since the 2007-2008 school year when schools got an extra $100 from a 2.4 percent increase.

For most schools, those new funds are minimal. In Minneapolis Public Schools, for example, it reflects a $3 million increase to its almost $525 million operating budget, according to mid-June calculation by the state education department.

Scott Croonquist, executive director of the Association of Metropolitan School Districts, said schools would need to receive at least a 1.7 increase in the general education funding just to keep up with inflation under the most conservative estimates.

"Clearly, most schools are just treading water when it comes to the basic formula that provides the most money" Croonquist said.

That's the case for Anoka Hennepin Public Schools, the state's largest school district. This week, the school board approved a budget with a $7.5 million shortfall, prompting the district to tap its reserves to cover the deficit.

Just a few months ago, the district was projecting a $27 million shortfall over the next two years, but last minute legislative changes to funding formulas for low income students and integration aid helped reduce that amount, Superintendent Dennis Carlson said.

"State legislators have been put in a really bad spot over the past decade because of the debt," Carlson said. "I think they did the best job they could this year given the resources they have."

While Anoka-Hennepin won't be seeking new levy dollars from voters this fall, other schools will. A preliminary survey by the Minnesota school board Association indicates 72 schools will turn to referendums come election day.

One of those schools is Stillwater Area Public Schools which is proposing to raise the district's current $1,005 per student levy to $1,495 per student. If the levy is allowed to expire, the district estimates it will need $10 million in cuts. On the chopping block are the school's current five day week and band and orchestra programs; it's also considering raising class sizes.

"I want to make this very clear. I am not one of those superintendents who believe more money is the answer to solve the problems within education," Lunn said. "But when you are faced with unfunded mandates both on the state and federal level, it becomes a very difficult situation." He cited the requirement to evaluate teachers as one of the newer state initiatives many schools are struggling to fund.

While most Minnesota schools will have to wait another year to feel the impact of the 2013 legislative session, some metro area schools will be receiving new money this year to fund integration efforts.

In the past, the state formula favored big districts like Minneapolis and St. Paul and did little to help suburban schools with increasing numbers of minority students. But legislators revised the formula, and now suburban schools stand to gain.

"It's money that should have been there all along," said Lester, the Brooklyn Center superintendent. "Now, we get to play by the same rules as everyone else."

About $250,000 in new integration aid will be flowing this year into Brooklyn Center Public Schools, a district so cash-strapped that teachers donated a portion of their paycheck this year to pay for things like field trips and class projects. Between that money, an increase in state money for low-income students and the renewal of a couple of significant grants, the district projects to be out of statutory operating debt in another a year or so.

Significant funding increases also are in store for next year as a result of legislative tweaks to the state tax bill. Key among them is the ability for school boards to levy up to $300 per pupil without voter approval.

School officials say that will be a huge boon to property poor school districts who have been unable to pass referendums. About 10 percent of Minnesota's 337 school districts have no operating levy.