Will the Education Budget be Transformational for Students who need Transformational Education the Most ? Part 2

 This is a second in a series on what the 2023-2024 budget must do, if it is to be truly transformational.  Shortly after our first post in the series, Minnesota Public Radio published an online article based on the research of Rutgers University and the Shanker Intitute which discloses that Minnesota grossly underfunds school districts with concentrated populations of lower income students, English language learners, and students of color. (See How Minnesota school funding leaves the most in-needs school districts behind.).   The Rutgers-Shanker study compares Minnesota's school funding for each Minnesota district as compared to the funding necessary for that district to provide its student with a national average education -- a much lower standard than Minnesota's constitutional requirement for an adequate education that meets all state standards. The Rutgers-Shanker study shows that even at this lower standard (a national average education), Minnesota's finance system fails many districts:

"The least adequately funded districts in Minnesota include both Minneapolis Public Schools and St. Paul Public Schools, which is consistent with national patterns of below adequate funding in large, diverse, urban school districts. But the list also includes many districts outside of the Twin Cities, like Worthington, St. Cloud, Chisholm and Mabel-Canton–and suburban districts, including Columbia Heights and Brooklyn Center. ..."What these districts have in common is that they have a higher proportion of students who need the most from public schools, in combination with local factors that increase the costs of school districts. These local factors include local wages and geographic sparsity."

Minnesota's Adequacy Funding Gap 

The "adequacy funding gap" is the difference between the state funding necessary for a district to provide an adequate education to its students and the funding actually provided.  Assessing whether Minnesota districts have an adequacy funding gap depends, in part,  on one's definition of an adequate education.  As we have said, the Rutgers-Shanker measure of the adequate funding gap utilizes the national average education for that purpose, a rather low bar for Minnesota Department of Education's vision calling for a world-class education.    The Rutgers-Shanker study merely estimates the additional funding required to raise a district's educational results to the national average.   By way of example the Rutgers-Shanker study estimates that the state underfunds St. Paul by about $4800 per student, Minneapolis by about $4500 per student, and my own St. Cloud district by about $6700 per student.

The regrettable fact is that the State of Minnesota -- Governor and legislature -- has never investigated the question posed by the Shanker-Rutgers study.  To close the achievement gap, Minnesota must close the adequacy funding gap, but Minnesota can't do that effectively when it doesn't have data on what an adequate education costs in the districts serving large number of students with higher educational needs.  At the same time, the legislature must develop policy guardrails to assure that adequate funding is actually used by local school districts efficiently and in a manner that delivers that adequate education.  As the legislature begins to close the adequacy funding gap, the legislature and MDE must implement a measure of accountability for funds designed to close the gap in funding and the gap in educational results

 Minnesota's past failure  to determine the full cost of providing an education that meets all state standards and mandates

Two decades ago, as Minnesota increased state mandates designed to assure that all students received a world class education, districts across the state complained mightily that mandating higher expectations was raising the cost of meeting those expectations.   Formerly, Minnesota had imposed no proficiency expectations for public education.  New proficiency expectations particularly raised costs for district serving higher numbers of students with higher educational needs.  

In his 2003, State of the State address Governor Pawlenty highlighted this growing concern, stating:

“As good as our schools have been, we are leaving too many children behind. And the sad reality is, they tend to be poor, disabled or children of color.”

 To this end Governor appropriately appointed a  blue-ribbon school funding task force to report on whether: 

"Minnesota’s education finance arrangements ensure resources are distributed “equitably” to students throughout the state and does Minnesota appropriately adjust state revenue allocations for legitimate cost differences between districts, including additional costs for “at-risk” students?"

That task force reported that Minnesota could not close its achievement gap, unless Minnesota re-calibrated its school funding formulas to cover the "full-dollar costs of ensuring Minnesota public school students have an opportunity to achieve state specified academic standards."   Cost based funding, the report explained required that the funding formula must be:

Tailored to relevant characteristics of each individual student. “Relevant characteristics” means a student’s grade level and incorporates, where appropriate, extraordinary conditions such as  student disabilities,  household or neighborhood poverty,pre-K or Kindergarten readiness,- English language learners, and high incidence of school-to-school mobility.

The report noted that in a number of districts the percentage of students with higher educational needs was growing.  To address this challenge, education funding should be based on costing data, that is on:

"research to determine the appropriate weighting for the various relevant characteristics (e.g., student disabilities, poverty, school readiness, English language deficiency, student mobility) of individual students...."

It would be impossible for the legislature to mandate the delivery of an adequate education without knowing the cost, any more than it would be to build an adequate bridge, without determining the costs of materials and construction.   But making that determination is just the first step in delivering a constitutionally adequate education to Minnesota students.  Minnesota must then provide districts with the full cost of that education, and further must assure that the new funding is actually used to provide a better educational product.  For that reason, the 2004 task force recommended that further study be conducted so that the state could accurately base funding on the cost of educating student to state-specified standards. The resulting cost based allocation model, the Report explained:

"will shift education funding to a more rational, transparent, and publicly understood basis. Once instructional and operational costs are reasonably determined and sufficiently funded, local education officials have an obligation to ensure public resources are deployed efficiently and students achieve to high standards." (emphasis added)

Concealing the Cost of Delivering an Adequate Education

However, in 2004, the Governor may have feared that determining the actual cost of delivering an education (one that that meets state mandated standards) could be used in a constitutional suit to enforce the constitutional right to an adequate education, that is, to force the state fully to fund the "full-dollar" cost of an adequate education under the Supreme Court's Skeen decision.  For whatever reason, the Governor dismissed the task force before it completed its work, halting efforts to make manifest the extent to which  Minnesota's funding formula was not sufficient. 

Since that time, although there have been several Minnesota education finance studies, no Governor, nor any Minnesota education commissioner, has allowed any of the education finance studies to report on the full dollar cost of educating English language learners, students of color, or lower income students to the high Minnesota state standards.  By so doing, the state has hamstrung the legislature from performing its constitutional duty, and has shielded the public from understanding why Minnesota has persistently failed to close its achievement gap.  

Since the 2004, as we showed in the last post, study after Minnesota study, has decried Minnesota's persistent failure to make adequate inroads on its achievement gap.  Minnesota has tried numerous remedies, but has persistently refused  to follow the most important recommendations of the 2004 blue-ribbon task force:  (1) Full Funding: to fund school districts with the full-dollar cost of providing an education that meets all state standards for students with greater educational needs, and(2) Use Full Funding to Achieve High Standards:  to assure that local education officials meet their obligation "to ensure public resources are deployed efficiently and [that] students achieve to high standards." 

 In Part 1 of this series, we pointed out that in issuing his Education budget the Governor articulated the laudable goal that in this year of surplus, his budget would be truly transformational. On January 22 along with the release of his public education budget, the Governor pronounced:

"My messages to families, to students, to teachers, to support staff is, 'This is the budget for many of us who taught for decades, this is the budget we're waiting for. This is the transformational moment that can happen,"

 However, like every past budget, the Governor's 2023 budget is not based on cost, and although the details on the budget's impact on district has not yet been disclosed, it is not at all clear that the Governor's budget will address the funding needs of districts with high enrollment rates of students with higher and more costly educational needs.

 Will the Governor's Budget Close the Adequacy Funding Gap?

In Part 3, we'll ask: How is the Governor's budget transformational?   And for whom?  How, if it all,  does the proposed budget attack Minnesota's achievement gap?  Should  we expect that a budget designed to attack the achievement gap would direct significant and targeted relief to the students who are lagging behind and to the districts that serve them?  Shouldn't we expect that a a truly transformational budget would reflect transformational funding targeted specifically to addressing the achievement gap?   

In Part 3 of this series, we'll take a look at the components of the Governor's proposed education budget with special reference to whether that budget continues Minnesota's practice of intentionally under-funding the full dollar cost of providing an adequate education to students of color, lower income students, English language learners and students with reading challenges such as dyslexia.  In that post, we will dis-aggregate the Governor's proposed budget into categories to try to determine whether the Governor's budget is making a significant effort to close the funding adequacy gap, or whether it simply maintains the status quo, by spreading money around without regard to need. 

A nationally recognized study has determined that Minnesota needs to provide significantly more funding to districts serving lower income students, English language learners and students of color.  That study used a lower standard of educational adequacy than the one to which Minnesota aspires:  a world class adequate education that meets all state standards.  It is essential to recognize that placing more funds on the basic funding formula will not address efficiently this problem.  To address Minnesota' s adequacy funding gap, the 2023 education budget must direct significantly more money to districts serving students with higher more costly educational needs.  Correspondingly, it is equally important that truly transformative funding will be tied and targeted to accountable use of that funding on proven strategies to close the achievement gap. 

Will the Education Budget be Transformational...for the Students that Minnesota is leaving behind?

On January 22 along with the release of his public education budget, the Governor pronounced:

"My messages to families, to students, to teachers, to support staff is, 'This is the budget for many of us who taught for decades, this is the budget we're waiting for. This is the transformational moment that can happen,'

There is every indication that the legislature intends to craft an education budget that will include significant increases in funding for public education.  The Governor has proposed increases in the general education funding formula of 4 percent and 2 percent for the next two years.  Historically, increases have topped out at 2 percent and 2 percent for two years, and in some years significantly less.  The 2024-2025 Biennial Budget Base report for education explains that from FY 2003 to 2021 "when adjusted for inflation, revenue per student remained essentially constant."  When adjusted for the "Implicit Price Deflator"  (IPD) funding for districts during this time period actually declined.  . 

Inflation Adjusted General Fund "Increases":  The cost of the 3 percent average annual increase in the general fund formula is $1.4 billion in the second year.  To put the Governor's proposal in context, the Consumer Price Index for urban consumers in 2021 rose 7.5%, and for 2022 rose 6.5%, although in recent months the CPI has moderated. However, advocates at the Capitol rightly point out that the proposed budget will apparently yield further declines in the general education formula adjusted for inflation. 

In my home district, a two year 6% increase in the general education formula (that is an average of 3% per year) would increase state funding by about $5.1 million in the second year, or about $510 per student. Taken by itself, is this a truly "transformational" budgetary increase?  The answer depends on whether the governor's budget provides enough money to provide fair compensation for existing staff, and whether it also provides enough additional funding to cover the cost of making transformational improvements in programs addressing the needs of lower income students, English language learners, students of color, and students with dyslexia.  A review of the budget suggests that Minnesota public education may be gravely disappointed when it is discovered that there is not enough new money to address both of these objectives.

It is true that the Governor's budget contains other relief, some of which we discuss here.    The Governor's budget proposes to reduce the special education cross subsidy by 50%.  Although the "runs" translating the budget into district-by-district projected funding appear not to be available, if spread proportionally across districts, this would provide about $6 million in permanent relief for the St. Cloud district (about $600 per student) and $25 million for the Minneapolis District, by the second year in the biennium.  

By What Mechanism does this Relief Become Transformational

There is additional targeted funding in the Governor's proposed relief, and we'll discuss that in a following post.   But so far, we've identified two of the most significant forms of relief, formula increases (costing $1.4 billion in the second year) and partial special education cross subsidy relief (costing $840 million in the second year).  Importantly, none of this relief is targeted, none of it requires any school district to allocate a single dime of this relief to addressing the educational needs of lower income students, of English language learners, of students of color, or of the over 15% of students with dyslexia.   There is some targeted relief in the Governor's education budget, totaling about $581 million, of which $434 is dedicated to early childhood education.  However, even targeted relief is not inevitably transformational, unless it is actually used in the local district to implement transitional improvements. 

A Truly Transitional Budget Must Address the Unmet Educational Needs of Students

Take for example, the estimated  $6 million new money allocated to my home St. Cloud District in 2024, or the $25 million new money allocated to Minneapolis, to cut their special education cross subsidy in half (assuming that the funding is allocated prorata to reduce deficit proportionally.)   Each of these districts has very high unmet needs in the areas of English language learners, lower income students and students of color.  The cross subsidy deficits has impaired those districts ability to deliver necessary programs to address the needs of those other students, and restoration of that money should be used to improve the services provided to those students.   And we know that many districts in Minnesota are in this position, because report after report has warned that Minnesota districts serving these students have been unable to make adequate progress in closing learning gaps disproportionately impacting those students.  (See report list below). 

This question places squarely before us whether the Governors' budget has allocated enough funding to accomplish two important goals:  (1) to cover the legitimate needs of teachers and other existing staff for fair compensation and (2) to expand the educational services required to make meaningful inroads on the education of students who are not meeting state learning standards, to meet the legislative 2013 mandate that "All racial and economic achievement gaps between students are closed, and "all students are ready for career and college." (Worlds Best Workforce -- WBWF).  Sometimes we are asked to double-count an appropriated increase.   Teachers and staff may expect that the new funds are intended to provide them with transformational increases, so that the increases simply yield the same staffing and same programs, but at a higher compensation cost.   Districts struggling to meet the needs of students with unmet educational needs may see this new funding as finally providing transformational opportunities to meet those needs.  But if the actual funding is not enough to meet both needs, how is the budget truly transformational?

In districts like Minneapolis and St. Cloud, the special education cross-subsidy deficit has resulted in a reduction of necessary programs that would otherwise be addressing the WBWF goals.   With restoration of half of that deficit, suppose those districts add that money back into their budgets to expand services to English language learners, students with dyslexia or low income students!   Suppose representatives of staff say, wait a minute, the Governor's budget has only provided the district with 6 percent increases, 3 percent per year.   Look at inflation!  We are falling back.  We demand that you use that new special education deficit relief  money to compensate us fairly!  If that happens, will the Governor's budget turn out to be transformational, or will it merely address the legitimate needs of employees, but still leave unmet the needs of students who are historically unmet? 

This is the time to confront this problem: rather than letting it play out in a string of labor disputes and threatened shutdowns.    A truly transformational budget must fulfill both of these legitimate needs: the need for fair compensation for existing staff, and the pressing and persistent need for the state to provide enough funding to deliver high quality programs that assure that all students receive a world class education.   If the Governor's budget is inadequate to accomplish both of these objectives, then it is not truly transformational.   Instead of pretending that not-enough is really enough, the legislature must assure that  money to cover the cost of transforming education for students we are now leaving behind is allocated and targeted, and it must assure that when the money reaches districts, the districts who receive it actually allocate it to true transformation. 

We'll discuss this issue in coming posts, in part by discussing the Governor's targeted funding, but we end today's post with a reminder of Minnesota's continuing persistent failure to meet the needs of too many students listing 20 years of reports:

Ø Investing in Our Future: Seeking a fair, understandable and accountable, twenty-first century education finance system for Minnesota (Acknowledging that “Minnesota has one of the largest achievement gaps in the nation )(Governor’s Task Force July 2004 P11)

Ø Funding Education for the Future, (MDE May 2011) (“There are wide gaps in reading and math proficiency by race and by economic status. Little progress was made in closing these achievement gaps between 2006 and 2010.” ) Education Finance Working Group Recommendations and Report p 5 (Nov 2012)

Ø 80-20-10 Bringing Equity to Minnesota’s School Finance System (School Finance Working Group, November 2020) (Over the past 20 years, educational outcomes measured by state accountability tests have stagnated with a large, persistent achievement gap while the percentage of children of color has more than doubled from 16% to 34% )

Ø Office of Legislative Auditor A Minnesota Department of Education’s Role in Addressing the Achievement Gap (2022) p 3 (“Minnesota has had long-standing academic achievement gaps, despite efforts by MDE, school districts, and charter schools to implement policies designed to close them.)

Ø Wilder Foundation “Tackling the achievement gap head-on” (2006) (A wide gulf divides public school classrooms throughout the Twin Cities region. It closely follows the lines of family income and of race and ethnicity. This achievement gap persists throughout the school years, from grade-school test scores through high school graduation rates.)

Ø  Minnesota’s Educational Achievement Gaps: A Statewide Crisis. (Federal Reserve Bank of Minneapolis, 2019 (Minnesota’s education achievement gaps have persisted for decades despite implementing policies designed to close them.)  

Ø Educational Outcomes and Minnesota’s Economy, Minnesota Federal Reserve Bank of Mnneapolis, 2022 (“Data show that Minnesota’s public schools consistently underserve students from low-income families, Indigenous students, and students of color”.)