Minnesota high schools expected to shoulder sports league's budget again

Eight months after imposing unprecedented fee increases on schools to offset the financial burdens of COVID-19, the Minnesota State High School League has weathered schools' criticisms and collected almost the entire $4.7 million sought to ensure solvency this year.

As of last week, 96% of all membership dues were paid, according to league executive director Erich Martens. Remaining dues were owed by 51 schools — about 10% of the league's membership. Of those, 47 had paid a portion and four had not paid a dime.

The new COVID-related fees, amounting to up to $11,000 each for the state's largest high schools, are likely to continue in some fashion into the next school year because the league's funding concerns will last beyond the pandemic.

The first indication of how much the fees will be is expected to be decided at the league's board of directors meeting on Tuesday. Agenda items include a preliminary 2021-22 budget and the ''establishment of membership dues and the method by which they will be determined for member schools," Martens said.

At the last board meeting in April, the league's finance advisory committee indicated "a consensus of $4.5 million membership responsibility'' for the coming year. The committee seeks a sustainable revenue model rather than riding the volatile waves of tournament attendance and uncertain revenue.

The large fee increases do not sit well in Albert Lea, about 90 miles south of the Twin Cities. School leaders maintain the league acted outside its own bylaws when it approved as much as a 300% jump in some schools' membership fees last fall. Albert Lea leaders paid a combined $4,999 in annual membership, per student and activity fees but balked at paying two "COVID-19" installments of $4,500 each.

In an April 6 letter, the high school league told the school it was "no longer in good standing" and warned that paying past dues was "a condition for membership in 2021-2022."

Though Funk said the district would "slap the league with a legal injunction" if the league punishes the school, the standoff will not last. Funk expects his school to square all outstanding accounts as part of its 2021-22 school year fees. Holding out, he believes, sends an important message.

"This is part of a bigger concern with the Minnesota State High School League, that when they are out of money, they impose other fees on schools," Funk said. "But you're not going to just tell us to write a check. I don't feel they've justified the 'Why' in this case."

Earlier in the year dozens of smaller schools also protested the size of the fee increases. The league subsequently reduced the size of the hikes, though some schools felt it didn't go far enough.

Hard times in education fueled hard feelings. School districts statewide are struggling to balance budgets and staffing needs thrown into chaos by the pandemic. Albert Lea's district recently eliminated nine teaching positions.

The high school league's financial concerns predate the brunt of the pandemic. In February 2020, the league's board approved fee increases to address an immediate budget deficit. Long-term, the league sought to shift the league's primary revenue source from state tournaments to school fees, thereby flipping which stream would provide about 75% of the needed dollars.

When the league set its budget for this year, it projected holding no state tournaments and reduced its annual budget from about $9 million last year to $5 million this year. The main source of those funds became clear in September, when the league sent its 500 member schools notices of the new COVID fees.

The league ended up hosting winter state tournaments this year and has plans for them in the spring. Its finance advisory committee said in April that next year it projects "tournament revenues will exceed costs by an estimated $750,000.''

The percentage of school responsibility for the league's budget surprised Karissa Niehoff, executive director of the National Federation of State High School Associations. She said she isn't aware of other states where schools contribute more than 50% of its governing body's revenue.

Niehoff said some states generate revenue with per-team state tournament fees. In Minnesota, a recently created league financial task force has weighed options such as higher activity fees and lower per-student fees tied to a school's enrollment.

Equitable distribution of financial responsibility remains a challenge, a process where lines blur. A prime example: Region 4A, home to 67 smaller metro-area public, private and charter schools as well as some of the league's most vocal critics. Schools in the region also have shared more than $500,000 in aid from the league over the past 13 years.

The fee spike drew angst from Todd Russ, president of St. Croix Lutheran in West St. Paul. He later joined the league's financial task force. Doing so did not dull his concerns about the manner in which the league's developed and communicated its fee increases.

As his task force works toward a recommendation to the board of directors, even as most schools have paid in full, Russ cautioned fellow task force members, "Do not confuse compliance with acceptance."