What's in the 2013 Education Finance Bill--Part I

Jvonkorff on Education has been on vacation, but now we're back.     This week, we begin a detailed discussion of the recently passed education budget.   What's in the budget?   Do the facts sustain the high hopes of its sponsors?    Shortly after the House passed the final version of the budget, the House DFL caucus posted the following description of the budget:

“The investments are strongly tied to meeting ambitious goals called for in the bill that include closing the achievement gap, raising high school graduation rates, achieving literacy for all students by third grade, and having all students acquire career and college readiness by graduation.......This is a historic bill that will open the doors of opportunity for countless Minnesota students,” ....“It invests in the kinds of proven tools like early childhood education that we need to close our achievement gap and build the world’s best workforce. This is going to usher in a new era of educational excellence. Thanks to this bill, Minnesota is poised to reclaim our role as a national leader in education.” In addition to providing badly needed new dollars for schools, the budget includes reforms to student assessments and diagnostics, teacher licensure, and integration initiatives to make sure taxpayer dollars are spent as effectively as possible."

After signing the bill, Governor Dayton's blog described the bill as follows:

A Historic Investment in Education:  For the first time in its history, Minnesota will offer All-Day Kindergarten to every child in Minnesota.  We are giving thousands of children access to high-quality preschool and child care.  And we are freezing tuition for the next two years at the University of Minnesota and all MnSCU campuses and increasing student financial aid to make higher education more affordable for middle class families. With nearly a billion dollars in new money for education, this budget invests in every learner in Minnesota – from early education through higher education.  This new funding will help give our kids access to a world-class education and train the best-educated workforce in the world. This budget will also eliminate the school shift by the end of the next biennium.

Lets begin our review of the budget by looking at the history of Minnesota's general education basic formula in the K-12 budgets over the past years and comparing it to the basic formula in the new legislation .  The general education "basic" formula is provided to all school districts to spend largely as they wish on regular operations.  To calculate district revenues you take the number of students (weighted) and multiply by the formula allowance.   The basic formula is weighted based on the grade level of the students, so that the actual formula varies, and the total amount of revenue received by a district depends upon whether the district has more students in high school or elementary school.   School districts with smaller special populations (special education, poverty, English language learners, for example) push for budgetary increases to concentrate on the basic formula; school districts with larger special populations push for more of the money to focus on categorical aids, because typically the programs run significant deficits.  

Lets look today at the history of basic formula increases  and compare it to what the legislature has done this last session.

Here are the new formula increases for this session and the percentage rate of increase.  Keep in mind that over the years there have been some changes in the content of the formula, and so when we do comparisons, adjustments have to be made to attempt to report comparable numbers.   The reported percentages for this biennium don't track completely with the calculation of precentages for prior years.    A $76 increase in the formula, in prior years would have been reported as a 1.5% increase.   Presumably the elevated reported percentage comes from a change in the pupil weights which apparently produces more revenue for the same general formula dollars.

Basic Formula Increases (Dollar Increases and percentages)

	New
2013-14	$76	1.75%
2014-15	$78	1.75%

Here are the historic formula increases and percentages.  Keep in mind also that it takes a smaller increase to provide a 1 percent increase in the earlier years than later.  

School Year	Dollar Amount	Percent
1992-93	0	0.00%
1993-94	0	0.00%
1994-95	0	0.00%
1995-96	55	1.80%
1996-97	0	0.00%
1997-98	76	2.45%
1998-99	79	2.48%
1999-2000	167	5.12%
2000-01	157	4.58%
2001-02	104	2.90%
2002-03	104	2.82%
2003-04	0	0.00%
2004-05	0	0.00%
2005-06	182	4.80%
2006-07	191	4.81%
2007-08	100	2.40%
2008-09	50	1.17%
2009-10	0	0.00%
2010-11	0	0.00%
2011-12	50	0.98%
2012-13	50	0.98%
Average	65	1.78%