Gene Merriam, former Minnesota State Senator, July 23, 2010--The origins of the school aid shift--The shifts of spending from one year to the next are made possible because school districts have different fiscal calendars than the state. The mechanism is known formally as a school aid property tax recognition shift. Schools book the shifts as a payable, while the state books them as a receivable. “Kind of a crazy proposition, Merriam said,” and he recalled when it first came up in the 1980’s: “A superintendent came up to me and said he knew how the state could resolve its problems with cash flow.” He laid it out. “I told him that’s crazy and we’re not going to do it,” and the Senate didn’t, but they went over to the House and got it started there.

Merriam remembered going to the Star Tribune editorial board at the time and they didn’t think it was that bad of an idea. Merriam disagreed. “What a shift does is it allows you to mask the problem. Budget and cash flow streams are not static, so they should always be brought together (annually)…It is not a sound policy.”

Further, the shifts also mask spending patterns. “It’s indicative of a larger problem. Over the past biennium the allocation to education was decreased by $2 billion."

State Rep. Mindy Greiling, April 24, 2009--Importance of innovation revenue--Greiling said she is very optimistic about one section of the House bill, which she called the "centerpiece",  that provides $375 per pupil in innovation revenue that is tied to student achievement.  The bill requires a school district to use at least 5 percent of its new basic revenue for innovative revenue programs including peer-reviewed, research-based measures to improve academic performance.  It requires a district that is demonstrating low student growth to submit a plan to the commissioner of education describing how it intends to use its innovation revenue.

 State Rep. Mindy Greiling, April 24, 2009--Establishing a framework for a new "Minnesota Miracle"--While the bill essentially freezes basic revenue for each school district, in light of current economic realities, it includes language that is intended to implement in 2014, a significant change in school aids to resemble improvements that occurred when the 1971 Legislature largely made it possible for every school district to receive equitable and adequate funding based on equal local effort.  Among new changes will be providing the same funding for all students, K-12. 

  State Rep. Mindy Greiling, April 24, 2009--Whether school aids and local government aids should be settled in the same conference committee--It was noted that a frequently overlooked aspect of the 1971 legislation is that school aids and local government aids (LGA) were settled in the same conference committee.  That approach enabled legislators to make finer adjustments than are possible when school aids and LGA are settled separately.  Such an approach doesn't seem to have been followed since 1971.  Greiling replied that she represents cities that don't receive LGA.  She would like very much if trade-offs could be made between school aid and LGA.

State Rep. Mindy Greiling, April 24, 2009--Question of constitutional amendment for education revenue--A Civic Caucus member asked whether--in light of a stand-off between the Legislature and Governor on tax increases--the Legislature might just by-pass the Governor and submit a constitutional amendment to the voters on a tax increase for education.  It was noted that voters in 2008 approved a legislatively-submitted amendment that increased revenue for water, outdoors, and the arts.   Greiling said she is opposed to such an approach.  Minnesota doesn't want to become like California where something like 3/4 of the state's budget is controlled by voter referendums.   She senses no movement whatsoever for a constitutional amendment for schools.  The people want the Governor and Legislature to reach a compromise.  Moreover, the Legislature doesn't consider such amendments until the second year of the biennium. 

Curt Johnson, Education|Evolving, April 10, 2009--  No great opposition, just the logistics of a difficult budget session--There is broad support for the new schools approach, Johnson said.  The biggest problem is simply the politics of a legislative session which is dominated by how to close a multi-billion-dollar gap in the state's budget.
 

Curt Johnson, Education|Evolving, April 10, 2009--Extra expense with new schools?--Johnson and Tim McDonald, also an associate at Education|Evolving, said that chartered schools often operate at lower expense than traditional schools.  Facilities are lower cost and they don't need as many specialists.  It's not unusual for properly-designed charter schools to run a surplus, McDonald said.

State Sen. Geoff Michel, March 13, 2009--Possibility of education seeking constitutional revenue protection--A Civic Caucus member inquired whether educators might seek in this session the same kind of revenue protection that was given to outdoors and the arts in a constitutional amendment last fall.  Such an option--however distasteful a dedicated fund might be--could be attractive for educators who want more money and legislators who don't want to increase taxes directly.  Michel said he personally is reluctant to go that way.   Taking note of proposals in the Legislature to increase income taxes by $2 billion, Michel said he is opposed because such increases would give Minnesota the highest income tax rate in the nation.  States like Arizona and Florida would welcome such a decision because, he said, those states would welcome former Minnesotans relocating their residences.

State Rep. Marty Seifert, Jan. 23, 2009--Possible changes on education funding--Seifert expects some Republicans in the House to advocate different ways of stimulating better K-12 education.   He expects the Governor to propose statewide usage of Q-Comp, an experiment to partially base teachers salaries on performance. 

Jim Bartholomew, Minnesota Business Partnership, and Tim McDonald, Education|Evolving, Dec. 19, 2008--Dealing with a budget gap--It was noted that the Minnesota Legislature faces an enormous budget gap in 2009 that will have substantial impact on all state services, including education.  Bartholomew said the state must focus on the concept of public education, not simply maintaining current structures and practices.  This will allow policy-makers to focus on the needs of students, while creating opportunities for providing services differently.    Responding further to questions about the budget problem, Bartholomew said he supports relating teachers’ salaries to performance, not only length of service and degrees earned.  It's not only money that attracts teachers, he said, it's the nature of the job, and whether teachers are treated as professionals.   New approaches to licensing teachers need to be explored, he said. 

            McDonald contends that the inputs-focused perspective when analyzing these budget gaps has become a red herring. We need to look more fundamental, to the actual design of schools. There are more economical ways of doing things, he said.

John Hamann and Joann Knuth, MN Secondary School Principals Association, Dec. 5, 2008--Are changes needed?--A Civic Caucus member inquired whether, if the system isn't working, is more money needed or a change in how students are being educated.  Knuth said that more money is needed.  The coalition of education organizations, PS Minnesota, commissioned a report on our state’s public education funding.  It expanded the work of an Education Task Force, appointed by Governor Pawlenty, which determined that Minnesota schools are under-funded by $2 billion per year.  Greiling’s and Bonoff’s bill, the new “Minnesota Miracle,” addresses this funding shortfall in a systemic way over time. Knuth replied that education is not a separate entity outside of the political, economic, and social realm.  She thinks that education will probably be asked to share in the challenge of balancing the state’s budget deficit.

John Hamann and Joann Knuth, MN Secondary School Principals Association, Dec. 5, 2008--Likelihood of a constitutional amendment for a schools-only tax increase?  It was noted in discussion that the Legislature has an almost impossible job to balance a budget satisfactorily in 2009, what with a $5.3 billion gap between likely revenues and projected expenditures.  In response to a question, Knuth said she's not been involved in any discussion suggesting that education might seek a dedicated revenue source from the constitution, as outdoors and arts advocates received in a vote this fall.   The outdoors and arts amendment was adopted because proponents were frustrated by some lawmakers' pledges not to raise any taxes, she said.   She said she voted for the amendment but doesn't think it would be good policy for the state to follow that approach with other services.

            Knuth contended that K-12 education expenditures have declined in recent years as a percentage of personal income. 

            Turning to school districts raising operating income by referendum, Knuth said that over 90 percent of the state's school districts have levies on their local property tax for some portion of their operating budgets.  Because of differences in property wealth among districts, school tax burdens are becoming more inequitable, she said.   She'd not like the Legislature--in balancing a tight state budget--to allow expansion of local taxing authority.  That would put an additional burden on local property tax payers and create greater inequity.

            Knuth highlighted the fact that school districts are finding major increases in health care expenses for employees, plus additional expenses for fuel. 

 
John Hamann and Joann Knuth, MN Secondary School Principals Association, Dec. 5, 2008--Should teachers accept changes in their contracts to help balance the budget?--It was noted that in recent years employees in many private firms have agreed to significant changes in labor contracts to help keep their employers afloat during difficult times.  A member inquired whether teachers would accept changes in their contracts to help school finances in the current economic downturn.   Hamann and Knuth replied that such a step would be legitimizing the fact that schools have been under funded for many years.   Schools can't make more cuts in spending, they said, without significantly impacting the quality of instruction and services, especially in this era of greater accountability.  Essential support staff, such as librarians, nurses, social workers and counselors, have been cut already. Minnesota ranks last among fifty states in school student/counselor ratios; for example, in some of our urban high schools with the most diverse populations, the ratio is 1 counselor for 450+ students.   Class sizes are increasing; it is common to have 35 to 40 students in a math or English class.

Jay Kiedrowski and John Gunyou, former State Commissioners of Finance, Nov. 21, 2008--Proposals for special legislatively-ordered expenditures not included--In discussion it was noted that K-12 leaders are proposing a $4 billion increase for the next biennium.  Such an increase is outside--and would be in addition to--other projected increases.

Fred Storti, school principals' association, Oct. 3, 2008 -  Need for more resources at the early grades—Again speaking for himself only, Storti said that more resources need to be placed in the early grades.   You can’t deny the importance of good education for 11^th and 12^th graders, he said, but there’s no question that investment in early childhood education is key.  A Civic Caucus member wondered whether it’s a social worker or a teacher that is more important in helping families and pre-school children.   Standards are needed for all teachers, public and private, in early childhood, whether in schools or elsewhere, he said. 

Fred Storti , school principals' association, Oct. 3, 2008--More funding at the center of MESPA legislative program—The official legislative program of MESPA calls for adequate, sustainable, funding of schools throughout the state, Storti said.   In response to a question Storti said that to close the gap between current funding and what is needed to do an adequate job would require about $2 billion more per year in Minnesota. 

State Sen. Larry Pogemiller, Dec. 13, 2007--Invest in education--In Minnesota the best thing the state could do for its economy is to increase its investment in education, Pogemiller said.   In response to a question, he said that charter schools are helpful but not a panacea.  Part of the solution, he said, must be more authority for the faculty at each school.  It was noted that in some school districts, including Minneapolis, vacancies in schools are filled by teacher seniority, which means that some senior teachers select the schools with fewer at-risk children.   Pogemiller replied that there'd be no problem if all schools in the state had enrollments with a proportionate share of at-risk children.

State Sen. Larry Pogemiller, Dec. 13, 2007--Use income tax to increase investment in education--The data is overwhelming that increasing investment in education would help the state's economy, and that such investment should be financed by an increase in the state income tax on higher income earners, he said. 

State Rep. Marty Seifert, October 25, 2007--Concern over funding of education—Seifert said he voted against the education funding bill for the first time last year. The bill provided a 2 percent increase in the first year and a 1 percent increase in the second year, with some additional money for special education. Some majority DFL legislators seem to consistently favor money for welfare over education, he claimed.

Continuing his comments on education, Seifert noted that in 1972, the year he was born, the school year was 6.3 days longer than it is today. Today the school bus companies and the coaches seem to have the most influence over the length of the school day, with some high schoolers finishing their school day by 2 p.m.

He spoke against federal mandates that are not adequately funded. The federal No Child Left Behind act is a “disaster”, he said.

Much more attention is needed to equalize funding among school districts across the state.

It’s vital, he said, for immigrants to be immersed in English, even though such ideas might not be deemed politically correct. We’re cheating people out of the American dream by not insisting the immigrants become fluent in reading and writing English.

former State Rep. Dan Dorman, Feb. 2, 2007--Change in the significance of the impact locally of a statewide decision--As a consequence of the shift, we now see that the impact locally takes on less significance.   To illustrate this point, Dorman referred back to when the State Legislature, at Governor Ventura's urging, replaced most school property tax levies with state aid.   But, Dorman said, the Legislature did nothing to halt the right of school districts to conduct excess levy referendums.    He recalled making a motion to discontinue the excess levies after six years, but he only received about 13 or 14 votes in support out of a total of 134 House members .   Thus, he said, it is clear that the Legislature never intended to provide 100 percent of school funding from the state, with no local funding.  But if you listened to the tone of many campaigns last year, Gov. Pawlenty and Republicans were to blame for the need for excess levies.