Testimony of
Jerry Von Korff
District 742
Vice-Chair
on
Operating Referendum Extension
April
2, 2013
Thank
you for affording a hearing to HF 234, the operating referendum extension bill
authored by Rep. Jerry Newton. Passage
of this bill is one of the highest priorities of our school board, and it is
important as well to school districts across the state. I’ve served on our school board since 2004,
but I’ve been involved as a parent volunteer since the 1980’s. Since 1994, our district has run seven
operating referendum campaigns, each time seeking to maintain just about the
same operating referendum support, in the range of 4-6 million, or about $400
to $600 per student. I have served as
volunteer chair of two of these campaigns, and as a board member or candidate,
worked on three other of these campaigns.
Four
of those seven campaigns have been successful.
Three of them have failed. (See table 1, below). Most of our referendums have produced less
revenue than our special education deficit.
From 2001-2003, it took our district three tries to pass an operating
referendum. During that time, the
district suffered catastrophic losses and cut necessary programs. We
have one of the lowest school tax rates in our region, and the lowest
referendum amount of the big four districts in our area, but still, passing an
operating referendum is extremely difficult.
Our operating referendum must be
renewed in 2014: otherwise our district will be thrust into a deep downward
financial spiral. Because of our
history, we will schedule our first renewal campaign in 2013 to give us two
opportunities to pass the referendum, before catastrophe strikes. During this time, we will call on our
volunteer community to spend countless hours to campaign, and the volunteers
will try to raise a significant war chest to communicate their message. This creates a tremendous diversion of
volunteer resources away from mentoring and other school volunteer activities,
and over to the campaign. This system
of repeated referendums in Minnesota is wasteful and ineffective.
As
of 2011, although our school district had one of the highest special education
deficits in the state, and one of the highest poverty rates in the state, we
ranked only 93d
in revenue per student. Many districts
across the state with lesser challenges receive significantly more operating
referendum revenue per student. We need
local revenue to meet our responsibilities as trustees of the state’s most
important responsibility.
I
wish to make the following critical points:
- Renewal of
Operating Referendum Revenue is Necessary to meet our constitutional
responsibility. For Districts
like ours, operating referendums are absolutely necessary revenue sources
without which we cannot meet our constitutional responsibility to provide
education which the state requires us to deliver. Since 1986, the percentage of districts requiring
operating referenda has risen from 47 to 90 plus percent. In the last 10 years, the percentage of
general revenue supplied by referendum in the Twin Cities has risen from 3% to
14%. In the suburban metro ring it has
risen from 8 to 16%. In regional centers
like St. Cloud it has risen from 3% to 10%.
We understand the temptation to sweep away this problem by trying to
make referendums go away. But under the
Governor’s budget, that is not a solution:
it would destroy us financially.
- Special
Education and other Cross Subsidies are Crippling School Districts financially. Operating referendums are needed to
address funding shortfall caused by the rising cost of special education and
the nearly $700 million annual deficit in funding that is imposing a crushing
financial burden on school districts.
Since 2005, Minneapolis cross subsidy has risen from $540 to $905 per
student. White Bear Lake’s cross subsidy
has risen from $462 to $877. Duluth’s
has risen from $422 to $801. Our own cross subsidy has risen to about
$8 million, or more than $800 per student.
That means that we are taking 20% of the basic formula to fund the
special education deficit. The small
relief that Governor Dayton’s budget provides school districts is a drop in the
bucket compared to the magnitude of this budget. Until you fix this problem, school
districts need local property tax revenue to cover our huge special education
deficit.
- In Outstate School Districts, referendum
passage is uncertain and speculative.
The chart below shows that our district has
suffered major reversals in fortune depending on a slight swing in voter
turnout. A small change in voter
sentiment can throw our district into a financial tailspin. It means that we cannot plan
effectively. It means that major basic
programs are at risk for sudden cancellation.
Because this revenue is critical to our mission, the elected school
board should have the authority to renew.
Voters lack command of the details of school budgets. They react based upon transitory
sentiment. An increasing percentage of
our voters have no children in school, and a significant number of our parents
are now immigrants who have no vote at all.
The
fact that 90% of Minnesota’s School Districts have operating referendums ---
most of them at higher levels than ours -- is powerful evidence that we need
the revenue that referendums provide. In Minnesota, the right to an education is a
constitutional right, not a right that depends upon the whim of the
voters.
In
St. Cloud, we regularly conduct outside independent reviews of our operations
to identify places we can save money. We
have an independent citizen advisory committee, with membership from the
legislature that reviews our finances on a regular basis. Our rate of teacher salary increases has
been lower than the average increases across the state. Our rate of special education cost increase
has been lower than most school districts.
The system that forces us to run periodic referenda to make ends meet is
illogical and unfair.
The
legislature needs to recognize that as long as this state funding shortfall
exists, districts must have access to local revenues. Children should not be forced to attend
poorly funded school districts simply because they happen to reside in
districts with high rates of poverty, or high percentages of students with
special needs, or high parochial school populations. Children in more conservative districts have
the same educational needs as districts that are more liberal.
Getting rid of
referendum revenue would be irresponsible, because it covers our mandate
deficits. The responsible solution is to
allow school boards to take local responsibility to renew referendum revenue,
so that we can meet our constitutional mandate to educate all children. We on the St. Cloud School Board have the
courage to meet our constitutional responsibility to raise revenue necessary to
do our duty. We ask you to meet your
constitutional responsibility by giving us the power to do what we all know
needs to be done—to raise the revenue needed to deliver a quality education to
all children.
Table
1
St.
Cloud Referenda From 1994 to Present
|
Year
|
Per
Pupil
|
Length
|
Yes/No
|
Yes
%
|
|
1994
|
$303
|
4 years
|
14,518 / 12,481
|
54%
|
|
1998
|
$332
|
10 years* (taken away by legis.)
|
16,215 / 15,830
|
50.6%
|
|
2001
|
$550
|
10 years
|
7,187 / 11,836
|
37.8%
|
|
2002
|
$375
|
4 years
|
13,844 / 15,020
|
48.0%
|
|
2003
|
$450**
|
4 years
|
9,737 / 8,967
|
52%
|
|
2007
|
$522
|
5 years
|
7,172 / 7,332
|
49.5%
|
|
2008
|
$555
|
6 years
|
24,295 / 22,176
|
52%
|
Passed Referenda
Failed Referenda
*Most of the 1998 levy was equalized away in 2001, and the
funds used for equalization were given to taxpayers and districts without referenda. The result was to create significant funding
shortfall in St. Cloud leading to massive cuts and the loss of the District’s
fund balance**2003 levy was broken into five questions. Four questions passed, one by only 2/10 of a
percent
