Minnesota lawmakers expand extra funding to midsize school districts

One out of every three school districts in Minnesota missed out on millions of dollars in state funding last year.

Minnesota offers extra funding to the state's smallest schools, and last year the Legislature approved new funds for large urban and regional center school districts.

But that left out schools in the middle — some 130 medium-size districts all over the state.

Last week, the Legislature expanded that funding to all public school districts, regardless of size. Supporters say it will give schools, which rely on operating levies to pay for everything from teacher salaries to utility bills, a stable, predictable source of income.

Last year, lawmakers shifted control of hundreds of millions of dollars' worth of school levies out of the hands of voters and into the hands of school districts. The funding came in the form of location equity revenue — $424 per pupil, from a mixture of state aid and local property tax dollars, for districts in the seven counties around the Twin Cities and $212 per pupil for larger regional districts.

The legislation helped districts like North Branch, where money was so tight, it had switched to a four-day-a-week class schedule.

But the funds went only to districts with more than 2,000 pupils. Districts with fewer than 1,000 students received a separate pot of state rural aid. There was nothing new for schools in the "doughnut hole" in between.

The last thing Minnesota wants, Heller said, is for where you live to become "an indication of how well your schools are funded."

Location equity is supposed to take financial pressure off schools and taxpayers. With extra money from the state, residents might see slightly smaller tax bills and districts could continue these levies without going back to voters every few years for approval. For districts without a voter approved levy, the funds provide access to additional state aid.

Critics, including Republicans who tried to block the provision in the tax bill that passed the Senate on Friday, fear it could mean higher property taxes, not lower — as much as $52 million more in property taxes over the next two years.

But doughnut hole districts are eagerly awaiting the funds.

"They're worried that they're going to fall behind in being able to attract teachers, in being able to maintain programs," said Fred Nolan, executive director of the Minnesota Rural Education Association. "We're all in competition with one another, really. There's only so many licensed teachers out there."

"Baseball and softball were on the chopping block last year," said Radinovich, D-Crosby, who sponsored one of bills introduced this session to fill the hole. "We have cut to the bone because we couldn't pass a levy of the size that we needed."

Not continually going back to voters for more money is a tantalizing prospect for districts where ballot measures are hit-or-miss. Since 1991, Montevideo has put operating referendums on the ballot seven times; three have passed.

The Legislature passed the tax bill, which included $424 per pupil in location equity aid to every school district in the state, on Friday.