Minnesota DFL Legislators Strike Deal to Give Schools $2.2 Billion Funding Boost

Minnesota DFL Legislators Strike Deal to Give Schools $2.2 Billion Funding Boost

Minnesota legislative negotiators struck an education spending deal Friday that would tie future school funding increases to the rate of inflation, help cover the rising cost of special education services and address districts’ concerns about the cost of a new mandate.

Democrats’ education budget agreement includes a 4% funding increase for schools in fiscal year 2024, a 2% increase in 2025 and annual inflationary boosts capped at 3% afterward. Their bill also includes more than $300 million per year to help cover schools’ special education costs, and more than $60 million a year to fund a new mandate requiring districts to pay unemployment insurance to hourly school-year workers between academic terms.

“It’s the biggest historic investment in education above base that we’ve ever done,” said House Education Finance Committee chair Cheryl Youakim, DFL-Hopkins.

All told, Democrats’ education bill would increase school funding by $2.2 billion over the next two years.

The money to fund the unemployment insurance change was a last-minute addition that wasn’t included in either chamber’s original education budget bill. It was added after administrators from some of the state’s largest school districts raised concerns about the previously unfunded mandate taking away from their overall funding increase.

Mark Stotts, director of finance and operations for the Rosemount-Apple Valley-Eagan school district, told the Star Tribune earlier this week that the unemployment insurance change could have cost his district up to $5.8 million annually.

Scott Croonquist, executive director of the Association of Metropolitan School Districts, said Friday that he was relieved to see the state pick up the cost of the unemployment insurance expansion.

“We feel better, certainly,” Croonquist said. “We are still worried, though, whether or not there are going to be enough incentives for people to want to work summer school … Are we going to be able to hire the staff we need?”

Youakim said hourly school-year workers should never have been excluded from unemployment insurance eligibility, calling it a “fairness issue.”

“We still don’t understand why these folks, even if you want to consider them seasonal, are one of the only ones carved out of unemployment,” she said.

Some school districts have similar concerns about the cost of a proposed new state paid family and medical leave program, which would impose a 0.7% payroll tax on employers and employees.

Stotts said the payroll tax for that program could cost Rosemount-Apple Valley-Eagan — the state’s third largest school district — $1 million a year if the district splits the cost with employees.

John Morstad, executive director of finance and operations for Osseo Area Schools, estimated the paid family and medical leave program could cost his district $3 million-plus annually. For comparison, Morstad said the 4% funding increase that state schools are poised to get in 2024 would amount to $8 million-$9 million more for Osseo Schools.

“I’m concerned about the fact that there are a whole lot of new mandates that basically wipe that out,” Morstad said earlier this week, before legislators opted to fund the unemployment insurance expansion.

State Sen. Zach Duckworth, R-Lakeville, criticized Democrats for imposing new mandates that he said school districts didn’t ask for.

“What they asked us for was a modest increase to the funding formula, an increase to the funding that we’re willing to provide for the special education … and then little to no other additional mandates,” Duckworth said.

House Speaker Melissa Hortman, DFL-Brooklyn Park, said the funding increase Democrats are offering school districts will far outweigh any cost associated with new state mandates.

“The things that we are looking at are not going to have as dramatic an impact as the substantial increase in funding that we are allocating to education,” she said.

The special education funding included in Democrats’ bill could free up tens of millions of dollars for large school districts. State school districts are expected to collectively face an $811 million shortfall [https://www.house.mn.gov/comm/docs/6xiw7Cit6E_VLzY9doPDoA.pdf] for their special education services this year, with costs far surpassing revenue, according to the Department of Education.

Districts are required by law to maintain special education services, but the government has long offered only a fraction of the money necessary to provide those services. As a result, districts have used money from their general funds to cover the difference, squeezing their overall finances.

Under the DFL’s education funding agreement, Minnesota would commit to covering roughly half of that steep statewide shortfall. The state aid would greatly reduce each school district’s special education deficit.

The bill also allocates more than $40 million per year in 2024 and 2025 toward a similar, though much smaller, deficit for English language learner services.

“We’re optimistic that this could be an unprecedented year for funding Minnesota schools,” said Tom Sager, executive chief of financial services for St. Paul Public Schools, whose $42 million special education shortfall would be nearly cut in half.

Staff writer Jessie Van Berkel contributed to this report.

Needed Investment in Minnesota Kids

Needed Investment in Minnesota Kids

Minnesota DFL legislators and Gov. Tim Walz agreed to devote an additional $2.2 billion to K-12 education over the next two years — a significant 10% increase. Now lawmakers are hashing out how those funds should be spent.

The biggest-ticket items in the increase would rightly boost the general education per-pupil amount. And the increase would wisely raise funding for special education and English-language learning, consuming more than half of the proposed additional spending.

This week, House members approved an education measure that increases the general education formula by 4% the first year and 2% the second. It also indexes that formula to inflation, with a cap of 3%. The Senate version under discussion calls for a 4% increase in the first year and a 5% in the second. There should ultimately be a compromise between those percentage hikes.

Bill author and House Education Finance committee chair Cheryl Youakim, DFL-Hopkins, has called the increased funding “transformational.”

“With divided government, we underfunded our schools year after year and had to compromise away things that we value,” Youakim told an editorial writer. “We certainly can’t completely turn around 20 years of underfunding in one session, but this bill is a good start toward closing opportunity gaps in our schools.”

As included in the House and Senate versions, the final bill should address the steep statewide deficit for special education. School districts are required by federal law to offer those services, but the federal government has never fully funded them. The state Department of Education (MDE) estimates Minnesota districts will collectively have an $811 million shortfall between their special education costs and revenue this year.

Districts have been forced to take funds from general education to cover that difference, so that additional state assistance would free up more dollars for their general operating budgets.

The two bills also sensibly cover a similar though much smaller deficit for English-learner services, with the House covering 100% of the gap by 2027 and the Senate covering 75% by 2026. In addition, proposals in the bills to permanently fund about 4,000 current spots for preschoolers and expand that opportunity to at least another 5,000 kids should also be approved.

Other policy provisions that require students to take civics and personal finance courses to graduate — and to study genocide, the Holocaust and ethnic studies — also merit approval. We trust education leaders, teachers and parents to use this material to better prepare Minnesota students for adulthood.

Many Republican lawmakers agreed that the per-pupil funding amount should be increased. But they criticized the DFL plan, arguing that it does not emphasize improving academic achievement and creates mandates that will be burdensome for districts to meet. Those criticisms are not without merit.

We’d also agree with Republicans and education leaders who oppose a provision requiring staffing decisions and class sizes to be part of collective bargaining. Those decisions, in our view, should be left to district management.

The House passed its education package Thursday, and the Senate is expected to approve its version next week. Both will be the basis for conference committee discussions in the coming weeks before the Legislature adjourns on May 22.

The welcome funding increases for young learners, made partly by the state’s $17 billion surplus, can advance the goal of providing a high-quality education for more Minnesota students and improving classroom achievement.

House Passes Massive K-12 Education Funding, Policy Package

House Passes Massive K-12 Education Funding, Policy Package

House Democratic-Farmer-Labor members on Thursday passed a bill that would provide over $2.2 billion in additional funding for Minnesota schools.

The bill would increase education spending by 10% to $23 billion — about 30% of the proposed $72 billion state budget for fiscal years 2024-2025. The bill’s advocates say the massive education budget is necessary to implement a slew of policies that will lessen disparities among students, increase test scores, attract diverse school staff and make Minnesota schools some of the best in the nation. The bill passed the House 70-60, with Republicans in dissent.

The legislation’s Senate companion — which has some differences — still needs approval from the upper chamber. The two DFL-majority chambers will need to work out differences in a conference committee, a joint session of House and Senate members, who would draft a final version with provisions from both chambers.

The bill would significantly increase school funding, with a special emphasis on special education, English language learner students, and school support staff like counselors and school social workers.

Hopkins Democratic Rep. Cheryl Youakim, chief author of the House bill and chair of the Education Finance Committee, said the Legislature will make a historic investment in education.

“We have had 20 years of underinvestment. We’re not going to be able to turn that around in one biennium, but this bill takes a really good crack at it,” Youakim said at a press conference before the House floor vote.

Here are some of the provisions in the House bill:

Increase in funding formula

The general education funding formula, which determines how much money goes to each district, would go up 4% in fiscal year 2024 and then by 2% in fiscal year 2025. After that, the formula would increase annually with inflation.

The funding formula is the primary source of funds for Minnesota schools and is distributed to districts based on the number of students, as well as the district’s student profile. (A district with more students in poverty receives more money, for instance.) Districts would receive $7,138 per student in fiscal year 2024 under the bill, which is up from the current $6,863 per student.

The bill would increase funding formula spending by $704 million for fiscal years 2024-2025 and by $1.3 billion the following two years.

The provision puts a 3% cap on the amount the formula can increase annually. House Democrats throughout the session have been mulling how much the education formula should increase. At one point Rep. Zack Stephenson, DFL-Coon Rapids, authored a bill that would have boosted the formula by 20%. This would have increased per-student spending from $6,863 to $8,236.

The House and Senate appear to be at odds over the formula right now, with the Senate proposing a 4% increase in fiscal year 2024 and a 5% increase in fiscal year 2025. The Senate education bill, however, does not tie funding to inflation in the following years.

Reducing ‘cross subsidies’

School districts for years asked for more funding to reduce their special education and English learner “cross subsidy” — a term used around the Capitol referring to school districts paying for special education and English learner programs from their general funds because of inadequate state and federal funding.

This often causes districts to ask residents in their local area for property tax levies to help defray the rising cost of special education and English learner costs.

The House education package proposes increasing the state’s share of special education funding for school districts from 6% to 48% — costing Minnesota about $730 million in fiscal years 2024-2025. Many districts asked for a full elimination of the cross subsidy.

Rep. Dan Wolgamott, DFL-St.Cloud, this session introduced a bill to increase the state’s share of special education cross subsidy funding to 100%, but the bill stalled.

The bill also proposes eliminating the cross subsidy on English learner programs by 2027, with state funding increasing annually and costing over $272 million in fiscal years 2026-2027.

A slew of policy changes

In addition to increasing spending, House Democrats are proposing multiple policy changes, including a mandate for collective bargaining with teachers unions to include class sizes, student testing and personnel-student ratio.

In other words, districts would have to negotiate with teachers over key policies — with significant fiscal implications.

The bill also expands unemployment benefits to non-licensed staff; requires schools to provide menstrual products to students in grades 4 through 12; and bans schools from expelling students in kindergarten through third grade, unless there are extenuating circumstances.

“This bill puts mandates over students,” said Rep. Peggy Scott, R-Andover, on the House floor Thursday. “With these mandates and expanding bureaucracy, many districts will actually have more difficult budgets than they are experiencing now.”

The education bill has drawn criticism from some school administrators who worry the additional requirements — coupled with the paid family medical leave schools would have to provide if Legislature passes it this session in which schools would to contribute 0.35% of payroll to — would eat up the majority of their funding.

At a meeting last month, which was first reported by the St. Paul Pioneer Press, Stillwater Superintendent Michael Funk told his school board that he was disappointed with the Legislature’s education bills.

“I think this is potentially one of the most damaging sessions I’ve seen since I’ve been a superintendent,” Funk said.

Youakim, the bill’s chief author, disputed that the bill has unfunded mandates, noting the increases in the general education funding formula.

The House was still debating the bill as of late Thursday afternoon.

House Passes Education Bill that Would Appropriate $2.2 Billion in New Funding for MN Schools

House Passes Education Bill that Would Appropriate $2.2 Billion in New Funding for MN Schools

State aid for K-12 education is primed to dramatically increase in the coming biennium.

The omnibus education finance bill would make appropriations of $23.2 billion, a 10.6% increase over base spending or $2.22 billion in raw dollars.

Both parties agree that schools desperately need this funding boost. However, they disagree on how to allocate this money, with dueling perspectives heard on the House Floor Thursday.

In the end, DFL priorities won out, and HF2497 was passed, as amended, on a 70-60 party-line vote. The 327-page bill now heads to the Senate.

Rep. Cheryl Youakim (DFL-Hopkins), the bill sponsor, argues this infusion of state dollars represents an historic investment in Minnesota schools after 20 years of underfunding.

“Our proposal stabilizes school funding, supports the health and well-being of our students, works on equity and innovation in our schools, increases career pathways and connections with our local communities, as well as building up and diversifying our workforce,” she said.

Republicans fiercely disagree, laying out their case against the bill during a pre-session press conference.

“The DFL bill focuses on mandates, micromanaging our schools, restricting student discipline, … and closing pathways to licensing, leaving our schools with fewer teachers,” said Rep. Paul Torkelson (R-Hanska).

He advocated for a delete-all amendment unsuccessfully offered by Rep. Ron Kresha (R-Little Falls), which would “provide funding and flexibility, local control, innovation, and a focus on literacy.”

This 45-page proposal spurred an impassioned floor debate but ultimately failed along party lines. Among its key provisions, the amendment would have:

  • raised the basic funding formula by 5% in fiscal year 2024 and 5% in fiscal year 2025
  • covered 50% of the special education cross-subsidy and 70% of the transportation sparsity aid cross-subsidy
  • provided $250 million to revamp literacy education based on the “science of reading”
  • distributed $110 million in safe schools aid
  • mandated civics for high school graduation.

But this educational plan was not to be. Instead, the House handed a diploma to the bill brought forth to the chamber, which includes the following major appropriations:

  • $730 million to cover 47.8% of the special education cross-subsidy
  • $705 million to increase the basic funding formula by 4% in fiscal year 2024 and 2% in fiscal year 2025, while pegging future increases to inflation (subject to a 3% cap)
  • $85.3 million to permanently expand pre-kindergarten education to 12,360 seats statewide
  • $85 million to hire and train more student support personnel to attend to students’ mental, behavioral, and physical health needs
  • $81.8 million to reduce much of the English Learner cross-subsidy, with a statutory goal of its elimination by 2027
  • $73.2 million to overhaul literacy education
  • $65.9 million to pay paraprofessionals and special education instructors for preparatory time, professional development, and orientations
  • $60.4 million to nearly double funding for American Indian education.

The bill would also make numerous smaller scale appropriations, such as:

  • $47 million for a tripling of investment in Grow Your Own grants, designed to increase the size and diversity of the teaching workforce
  • $35 million for student safety and cybersecurity measures via the safe schools revenue program
  • $25 million for after-school programming
  • $22.4 million for full-service community school grants
  • $20 million for the development of a special education teacher pipeline
  • $14 million for a 21.8% reduction of the transportation sparsity aid cross-subsidy
  • $4 million for a newly established Office of the Inspector General to bolster grant-funding oversight
  • $3.6 million for menstrual products and opioid antagonists, which the bill mandates schools now carry; and $2 million for the construction of gender-neutral bathrooms.

[MORE: Download the spreadsheet; change items — ]

Policy portion

The bill incorporates the omnibus education policy bill, which would alter the educational landscape in the following noteworthy ways:

  • mandating Indigenous education for all students and replacing Columbus Day with Indigenous Peoples Day on the school calendar
  • adding civics and personal finances courses to the high school graduation requirements, while embedding genocide studies and ethnic studies in the social studies curriculum
  • allowing Tier 1 teachers to join a union and place class sizes, student testing, and student-to-personnel ratios under the “terms and conditions of employment” to be negotiated during collective bargaining
  • phasing out the Tier 2 to Tier 3 experience licensure pathway
  • severely limiting the use of suspension, expulsion, and recess denial as punishments for elementary school students. Finally, the unemployment insurance system would be expanded to include hourly school workers, such as bus drivers and cooks, allowing them to collect this benefit during the summer break.

In addition to Kresha’s delete-all amendment, Republicans offered another 10 amendments, touching on hot-button issues such as literacy, nonexclusionary discipline reforms, and ethnic studies. However, only two of these amendments were adopted: clarifying language around the civics graduation requirement and disciplinary measures for students suspended for violent conduct.

One rejected amendment generated a prolonged debate about religious freedom.

Offered by Rep. Jim Nash (R-Waconia), it would have struck language from the bill to prohibit postsecondary schools participating in the postsecondary enrollment option program from requiring applicants submit a faith statement.

Republicans argue this provision is prejudiced against faith-based higher education institutions; DFLers contend the current state of affairs is discriminatory towards high school students applying to these programs.

DFLers in the MN House, Senate Plan to Spend $2.21B in New Money on Education. Here’s Where it Would Go.

DFLers in the MN House, Senate Plan to Spend $2.21B in New Money on Education. Here’s Where it Would Go.

The Minnesota Legislature’s education budget bills call for big increases to general funding formulas, plus dedicated money for school support staff, literacy initiatives, after-school grants and building a more diverse teacher workforce.

In budget targets announced last week, top lawmakers said they intend to spend $2.21 billion more on education in the next biennium than in the current one.

“We’ve had over 20 years of underinvestment in our schools. While we cannot change that overnight, or even in one biennium, this is an incredible start,” Rep. Cheryl Youakim, DFL-Hopkins, the house education finance chair, said Wednesday.

Differences on spending, policy

While the majority DFL’s leaders in the House and Senate education committees mostly agree on priorities, their spending bills contain significant differences on spending and policy.

The Senate bill unveiled this week would increase per-student state aid by 4 percent and 5 percent in the next two years, at a cost of $913 million. The House bill follows Gov. Tim Walz’s proposal of 4 percent and 2 percent increases.

However, the House bill would tie future formula increases to inflation while the Senate would not. School district leaders have long sought those built-in increases, saying they’d make it easier to plan.

In addition to the formula hikes, both chambers want to send huge amounts of money to schools based on how much they spend on English language learners and special-education students. School leaders say they don’t get enough state and federal revenue for those students, so they have to divert funds intended for everyone else.

The House bill would reduce by half the so-called special-education “cross-subsidy” with $730 million in new biennial funding. The Senate would spend $653 million on the same effort, cutting the cross-subsidy by 40 percent, but their bill would keep chipping away at the funding gap with another $1.08 billion in fiscal years 2026-27.

Both bills would eventually eliminate the English learner cross-subsidy. The House wants to spend $82 million on it this biennium and $272 million the next, while the Senate would spend $143 million and $253 million.

“This is a grand slam,” St. Paul Public Schools lobbyist Jim Grathwol told Senate education finance committee members Wednesday. “These are stunning investments.”

Counselors, teacher diversity

There’s also plenty of money for schools to hire – or retain if they’re being paid with expiring federal grants – more counselors, social workers, school psychologists and nurses. The House bill calls for $75 million over the biennium for these support staff and the Senate $49 million, with those amounts doubling in 2026-27 in both cases.

The House is looking to spend $94 million, and the Senate $52 million, on “Grow Your Own” grants for partnering school districts and teacher-preparation programs to get more people licensed to teach. These grants sometimes are geared toward people of color, but the House ($10 million) and Senate ($9 million) bills also have separate line items for teacher-of-color grants.

“We know that students learn better when they see themselves in the adults they work with every day,” Education Commissioner Willie Jett said.

Pre-school, literacy

Without legislative action, 4,000 state-funded voluntary preschool seats that date to the Mark Dayton administration are set to expire. The House bill would spend $85 million next biennium and $155 million after that to expand the program to 9,200 seats. The Senate bill would spend $40 million just to maintain the 4,000 seats but would also spend $271 million expanding early-learner scholarships for low-income families.

Ericca Maas of Think Small, which advocates for early childhood programming, said that even with those scholarships, only one-third to one-half of the 31,000 low-income youngsters who need quality child care would get it.

Both chambers are intent on ensuring schools are using proven practices, such as phonics, for teaching kids to read and write. The bills – $73 million in the House and $41 million in the Senate – would invest in teacher training and curricular materials and require schools to screen for reading problems in kindergarten.

Other grants

Other proposed spending areas include:

  • After-school program grants (House $25 million, Senate $40 million);
  • Grants for full-service community schools, which make school buildings one-stop shops for a range of services that support young families (House $27 million, Senate $15 million)
  • Grants to revitalize American Indian languages ($15 million both chambers)
  • Paid orientation for paraprofessionals (House $16 million, Senate $14 million but doubling the following biennium)
  • Stocking schools with menstrual products (about $3.5 million both chambers).

Where they differ

There are some areas where the two chambers disagree.

The Senate wants $59 million in dedicated state aid for school libraries for the first time, while the House has nothing for that. The Senate also wants $20 million for Head Start and $8 million for grants that take aim at achievement gaps.

Meanwhile, the House wants $50 million to buy time for special-education teachers to complete due-process paperwork, plus another $10 million in transportation money for sparsely populated districts and $2 million in grants for gender-neutral bathrooms.

Policy changes

Besides all the spending, several new education policies are being considered in the House bill and in a separate Senate education policy bill. They include:

  • Requiring high schools to offer a course in ethnic studies.
  • Explicitly making “class sizes, student testing, and student-to-personnel ratios” subject to collective bargaining by teachers unions.
  • Banning schools from using American Indian tribes as mascots.
  • Letting school boards renew existing referenda without going to voters.
  • Prohibiting schools from suspending or expelling students before the fourth grade unless there’s an ongoing safety concern.
  • Stopping schools from punishing students by withholding recess.

Both the House and Senate education finance committees plan to meet Thursday morning to consider amendments to their bills before legislative leaders from both chambers work toward a compromise.

Clarification: This article has been updated to clarify that the Senate is considering new education policies in a separate bill

Youakim Supports Funding for Building Assets, Reducing Risks system

Youakim Supports Funding for Building Assets, Reducing Risks system

The executive director of Building Assets, Reducing Risks and supporters visited the Minnesota State Capitol Feb. 15 to testify during the House Education Finance Committee with Chair Cheryl Youakim (DFL-Hopkins) in support of HF 806, a bipartisan bill requesting funding that would allow 30 additional Minnesota schools to implement the BARR system.

Angela Jerabek, the executive director of the educational organization, began working as grant director for the St. Louis Park School District in 2000, according to LinkedIn. Previously, she worked as a St. Louis Park High School counselor beginning in 1993. She helped implement the system designed to provide a team approach to ensuring students do not slip through the cracks when reaching the high school level. She helped found the BARR Center, spreading the system to more than 200 schools. She has written articles for national publications, and presented at a White House “Evidence in Education Roundtable” in 2016. Rob Metz, former St. Louis Park High School principal, serves as BARR’s deputy director. Other leaders with ties to the St. Louis Park School District include Carrie Jennissen, associated director of special projects for BARR and former career and college readiness employee for the district, and Brad Brubaker, director of secondary schools for the center and a former social studies teacher and track and field coach for the district. Bob Laney, who helped implement the BARR system with Jarabek when Laney worked as St. Louis Park High School principal, is a trainer, presenter and mentor for the organization.

Jerabek joined Lake Elmo Elementary Principal Stephen Gorde and Instructional Coach Lisa Boland Blake at the hearing.

As described by the organization, “BARR is a strengths-based educational model that provides schools with a comprehensive approach to meeting the academic, social, and emotional needs of all students through the power of data and relationships.”

Youakim said at the hearing, “Over the last month, we’ve heard a lot directly from our schools about the challenges they’re facing meeting students’ needs, from academic to mental health. We’ve heard from teachers asking for support and training to and from administrators who want more tools to do the work they have to do for their students.”

Youakim said state leaders need to provide educators and students in the state with evidence-based support.

“From the testimony we’ve heard today from our schools that have used this program, the BARR system is successfully addressing these challenges in Minnesota schools,” Youakim said in summarizing comments at the hearing. “With House File 806 we have an opportunity to act now and bring this evidence-based system to additional Minnesota schools. This program is scalable – my favorite word – sustainable, and cost-effective.”

For more information about the organization, visit barrcenter.org.

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