Saturday, May 28, 2011

Education Finance Bill Scoring is a Financial Shell Game

Yesterday, I started trying to share information on the financial impact on our local district as compared to other districts and charters across the state. To catch a reminder of what I said, just click here.     In yesterday's  post, I described one way, the traditional way, to score the impact of the biennial education finance bill --called the "compare to base" approach.   When you compare to base, you are comparing the amount of funds that the district would have received under the old formula to the amount it will receive under the new.  Under the "compare -to - base" method, our district is scored as receiving a $74 per student reduction, one of the largest reductions in the State of Minnesota.  The education finance bill proposes to transfer money from school districts with large poverty populations and to move it into districts with less poverty, fewer minorities and non-English speakers.     

Now the House and Senate majorities argue that my scoring approach to the education bills is unfair.   They claim that the "compare-to-base" approach doesn't give their bill due credit for increases that they claim we are going to receive.  They claim that we had no right to count on the increases that the existing formula was going to provide us, and so, when we don't get them, its not a cut.   In the last five years, childhood poverty in St. Cloud has skyrocketed.   As that has happened, we've also had a significant upswing in children who come to the district not speaking English.   The compensatory education component of the formula was designed to pay us a bit more to educate these children, because the State expects us to make extra efforts to help these kids catch up.  We are required to find ways to get them to progress significantly more than a full year's growth in one year, and the compensatory education formula pays us more so that we can do that.   The House and Senate majority says, taking that money away is not a cut.

Our Republican representatives rely on the information that they are getting from legislative staff assigned to the majority.  So, I suppose its not fair for me to blame them for this mess, or to yell at them about the way that the majority is scoring their handiwork.  Staff scores the education bill like this:  if they change the formula to take some of our money away, its not a decrease, because we "never had that money anyway."   So, when they score the bill, they don't count cuts in the formula that would have paid us more.   Its just an increase that we never had any right to expect to receive in the first place.

They took some of that  money away --  the money that they claim we never had any right to count on in the first place-- and tranferred  it over to other school districts and charters, and gave them an increase.  And when they gave it to those districts, they counted it is an increase for those districts.     The net result is that in St. Cloud and other financial loser districts, the cuts don't count as cuts.  But in the financial winner districts, that same money is counted as an increase.   As you can see, this is a win win for the legislative majority.  When they take money away, they accept no blame, but when they give it back again, they get tons of credit. Its sort of a fiscal shell game. 

Now that explains how the legislative majority is seeking to avoid blame for money that loser districts lost.   But there is another part of their scoring system that allows them to take credit, even in St. Cloud, for supposedly giving us increases, when in fact we will never receive those increases.  I'm going to write more about that in my next post.  But to get you prepared for that, I need to remind you about the screwy way that Minnesota's special education finance system works.  Because, in St. Cloud, the legislative majority is claiming that we are going to get increased special education support, and they are calling that an increase, when in fact, the only way we can get an increase is if we increase our special education budget by significantly more than the money they say that we're going to recieve.   In short, they are inviting us to spend ourselves into bankrupcy, and if they do, they will take credit for the giving us more money to help us do that.
Here is the state of Minnesota's pre-legislative session projections on special education spending in the State of Minnesota.  
 The numbers in the first row show total spending by school districts in the State of Minnesota, and projected spending, for special education.  I want to emphasize that this spending is advocated for by both parties.   We, in St. Cloud, have urged the legislature to change the system to reduce state mandates, and incentivize efficient spending, but neither party has been willing to support legislation to solve this problem.  So what you are looking for is not a symptom of local school district irresponsibility.  It is primarily a result of a dysfunctional state policy that forces local districts to spend more than the state is willing to pay.

Total spending$1,829,000,0002,001,000,000$172,000,000
Total State-Fed Revenues$1,279,000,000$1,278,000,000$0
Deficit  $ 550,000,000$   722,000,000$172,000,000

Now the point I will discuss in my next post, is the how the legislative majority has scored the increased spending caused by this state unfunded special education mandate.  
  Its another situation where they are taking credit for something that actually causes more misery.   In that post, I'll explain that the legislative majority has been telling local districts that if the mandate causes them to have to spend $100,000 more, and if the state pays them $50,000 more to do that, why, that's an increase.  And, in my next post, I'm going to explain, that it appears that the increase that the majority scoring claims to be providing St. Cloud, isn't coming to us at all.  So, the money that we are losing, is not counted as a decrease.  And, we are getting credit for an increase that we will never receive.

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