A New Window on School Funding Trends (Part II)

 This post is part of a series on why so many school districts are announcing deficits in a year when the state government ran an historic surplus.  In our last post we pointed out that Anoka has announced a $24 million deficit, Minneapolis $90 million, Rochester $9 million and St. Paul $107 million.   Why were districts unable to balance their budgets if their increases were as high as advertised in the media?  Where did the increases get allocated?  And, who will be the victims of the cuts to follow?  Will the increases have an impact on Minnesota's achievement gap?    

 Tracking Inflation Adjusted Funding. When we discuss public education funding policy, It we cannot simply look at the increase in funding unadjusted by inflation .  Using my home school district the chart below illustrates the difference between funding increases unadjusted and adjusted for inflation.  The black line on Chart I below portrays the percentage growth in actual funding dollars per student; in St. Cloud District it shows that from 2003 to 2025, unadjusted for inflation, funding has doubled.  Yes, the 2023-2025 education budget increased the basic funding formula by 6% over two years but that increase doesn't account for inflationary costs. 

Chart I St. Cloud District Inflation Adjusted Revenues Per Student

Adjusted for inflation using the implicit price deflator (IPD) which adjusts for the typical cost of government services, we see that the St. Cloud District's revenues per student, inflation adjusted, has remained constant.  No dollars for improving educational services.   But that measure, the inflation adjusted revenue per student provides a grossly misleading picture of the education funding for all districts, and especially for urban districts like St. Cloud, because of demographic changes.

To understand the real impact of this lack of growth in real dollars, one must recognize that:

• From 2003 to 2025, the demographics of the St. Cloud district have massively changed, so that the number of students with higher educational needs has expanded dramatically.  
• From 2003 to 2025, Minnesota's education standards and requirements have significantly expanded 

This change in demographics would best be illustrated with a chart displaying the change in lower income students, English language learners and students of color.  But unfortunately, MDE has chosen to illustrate these trends with a chart, replicated here, that displays only the change in non-white enrollment and so this is the best chart available, despite its limitations.

Table II--Percentage of Non-White Students 2003-2025 St. Cloud District

 

While inflation adjusted funding in St. Cloud remained constant, its non-white student enrollment rose from 12 percent to 60 percent. At the same time lower income population tripled, and the enrollment of English language learners, predominantly East African immigrants, grew to 20 percent.  Research on the cost of providing these students  with an adequate education suggests that it will cost from two to three times other students, if not more.  And so, if Minnesota were seriously trying to comply with the constitutional requirement to provide each student with an adequate education that meets all state standards, the inflation adjusted funding for St. Cloud should be increasing dramatically.   

But that is only part of the story, and will discuss this further in Part III of the series.  Suffice it to say that the charts above for St. Cloud are replicated in a number of school districts. Minnesota is grossly underfunding districts serving lower income students, students of color, and English language learners, but our leadership at the Capitol refuses to admit it.