Minnesota is not Funding the Actual Needs of Students

Post 4 of 8 • Minnesota Education Finance Reform

This is the fourth post in an eight-part series on reforming Minnesota's K–12 education finance system, based on the Research Appendix drafted for the 2025 MDE Task Force on Education Finance. Post 1 introduced the series; Posts 2 and 3 covered Minnesota's history of inaction and the case for an adequacy study. We have pointed out that the 2004 finance study urged that the legislature should fund the "full dollar cost" of educating each student, and that the Skeen decision ruled that the constitution demanded the legislature to provide districts with enough funding to provide an adequate education that meets all state standards. This post addresses how funding must be tailored to the real cost of educating each student and how the state fails even to try to meet that standard.

In the prior post, we identified two methods of estimating the full dollar cost of delivering an adequate education. But there is another method largely ignored in Minnesota and elsewhere. Every district in Minnesota serving students of color, lower income students, English language learners, and/or students with disabilities is spending way more money, per student, than the state supplies for those students education. Most of them are stretched and would like to be able to spend more. Since each of those district is spending more than the state is supplying, surely it is reasosonable to conclude that what they are spending is compelling evidence of the minimum amount of money necessary to provide those student with an adequate education. The real question is how much more than they are spending, constrained as they are, would be required to provide that adequate education.

Funding Students, Not Just Schools

It costs more to educate some students than others. Minnesota's funding system doesn't reflect that — and the students paying the price are the ones who can least afford it.

By Gerald Von Korff • jvonkorff.com

There is a principle in education finance that sounds almost obvious once you state it: it costs more to educate a child who arrives at school three grade levels behind than a child who arrives ready to learn. It costs more to serve a student who doesn't yet speak English than one who does. It costs more to educate a child living in deep poverty — with all the health, nutrition, housing, and family instability challenges that poverty brings — than a child whose basic needs are reliably met.

This is not a liberal or conservative position. It is arithmetic. And it has significant implications for how Minnesota funds its public schools.

Minnesota's current system acknowledges this principle in theory — it provides categorical supplements for certain high-need student populations. But those supplements are set at levels determined by political compromise, not by rigorous analysis of what education actually costs for these students. The result is a systematic underfunding of exactly the students who need the most support.

The Historical Shift That Changed Everything

To understand why weighted student funding matters so much, it helps to understand how the cost of education changed when Minnesota — and the country — shifted from seat-time to proficiency-based standards.

Before the 1980s, Minnesota public schools were legally required to deliver required course content in a minimum number of hours of instruction. That was the standard: show up, teach the curriculum, maintain the required student-teacher ratios. Under that model, it was expected and accepted that students would perform very differently. Some would thrive; some would struggle; some would fall through the cracks. No one was held responsible for closing the gap.

In 1983, Minnesota began transitioning to a proficiency-based system — one that holds schools accountable not for the instruction they provide but for the learning that results. All students are expected to reach minimum standards of proficiency in core subjects. The state now mandates reading at grade level, math proficiency, and graduation. Schools are judged on whether their students achieve those outcomes.

This transition was the right thing to do morally and economically. But it fundamentally changed the cost structure of public education. Under seat-time standards, a trained teacher with an appropriate curriculum was essentially sufficient. Under proficiency-based standards, a school serving students who are significantly behind — whether due to poverty, language barriers, disability, or other factors — must do dramatically more to achieve the same outcome: more instructional time, more intervention services, more support staff, more family engagement, more individualized attention.

"If students are behind, or must overcome barriers to successful learning, they need more services, more time learning, and more support, and therefore significantly more funding."
— Thomas Fordham Institute, "Fund the Child" (2006)

This conclusion comes not from progressive advocates but from the Thomas Fordham Institute — one of the country's most prominent conservative education think tanks. When even ideological conservatives acknowledge that high expectations for disadvantaged students require more resources, the debate about whether weighted funding is necessary should be settled.

The Students Minnesota Is Underfunding

Students from Low-Income Families

On average, students living in poverty arrive at school with accumulated educational deficits — less early childhood preparation, more health and nutrition challenges, more frequent mobility, less access to out-of-school enrichment. Closing those gaps requires significantly more instructional support, earlier intervention, and extended learning time. Research consistently shows that the additional cost of providing an adequate education to low-income students double the base cost for more advantaged students or more.

English Learners / Multilingual Learners

Students who are still acquiring English require specialized instruction, bilingual support staff, and additional time. Minnesota's current ELL funding creates what researchers describe as a "cross-subsidy" — districts are required to spend far more on ELL services than the state provides, meaning other programs are effectively subsidizing ELL education. The 2020 Walz administration report recommended reducing this cross-subsidy to no more than 50% by adjusting per-student funding and lifting the cap for inflation. That reform has not been fully implemented. The 2023 legislation represented a major step forward — nearly doubling the per-pupil EL allowance and creating a new cross subsidy aid component starting FY 2027 — but that new component only reimburses 25 cents on the dollar of the remaining gap, so a significant cross subsidy burden remains. A district's cross subsidy, as measured by the state, is not the difference betweeen providing an adequate education to ELL's, its merely the difference between what the district is spending and the amount of reimbursement. Other than a potential constitutional claim, there is no practical mechanism to assure that districts are allocating adequate funding to English language learners.

Students with Disabilities

Special education is treated differently. State and federal law demands that districts provide the adequate education the law demands, but purposely underfunds the cost. Students and their parents are afforded a right afforded to no other student: to seek administrative or judicial relief to force the district to provide a free and appropriate education. As a result, Special education is the one area where Minnesota has built a relatively robust state accountability and funding system. Federal law requires a free and appropriate public education for students with disabilities, and the state has developed compliance monitoring, fiscal oversight, and complaint adjudication systems to back it up. As one example, the Minneapolis public school district is required to spend as of the latest report $43 million more on special education than the state reimburses. To cover this deficit, Minneapolise must divert funds from programs and services for other students. Under the Minnesota Supreme Court's Skeen decision the state is required to provide districts with enough funding to provide an adequate education meeeting state standards For students with disabilities districts are required to deliver the adequate education, but even for special education students the funding requirement is ignored.

Students in Early Childhood

Research is overwhelming that early childhood education — particularly for children facing educational barriers — produces substantial returns. The Great Start for All Minnesota Children Task Force, authorized by Governor Walz in 2021 with bipartisan support, recommended that Minnesota move toward a system where no family pays more than 7% of annual income on early care and education, and that early learning scholarships be expanded to include three-year-olds. Early investment reduces the remediation costs that accumulate when children arrive at kindergarten significantly behind. In 2024, first Children’s Finance estimated early childhood shortages affected 89,528 Minnesotan children with working parents. Without better options, many parents stay home or reduce their work to part-time in order to care for their children. Some parents alternate working hours with their partners or other family members, missing out on important family bonding time.

What the Research Says About Funding Weights

The 2004 Taxpayers Association study found that the cost of an adequate education in Minnesota varied from roughly $6,200 to over $14,000 per student — a ratio of more than two to one, depending on student characteristics. That study was conservative and is now more than two decades old. More recent research suggests the differentials may be even larger.

Dr. Bruce Baker's national research finds, as a general principle, that input-based analyses — which is what Minnesota's current categorical supplements essentially are — "fail to capture the full additional costs to provide equal opportunity in high need settings." In other words, the supplements Minnesota currently provides are structurally likely to underestimate what high-need students actually require.

What this means in practice: A school district in which 80% of students qualify for free and reduced-price meals, 30% are English Learners, and 15% have disabilities genuinely needs two to three times as much per-pupil revenue as a district serving a predominantly affluent, native English-speaking population. Minnesota's current formula does not come close to reflecting that differential. The districts serving the most vulnerable students are receiving the least adequate funding.

The St. Cloud Example

In 2023, the St. Cloud Area School District — in partnership with a citizen group called SCERAC — prepared a detailed description of what adequate funding would make possible for its students. The district's submission to MDE described specific programs that additional revenue would support, including: expansion of early childhood education; significantly enhanced Multilingual Learning services; expansion of its dyslexia programming; increased counseling and support staff; diversification of accelerated learning opportunities; and continued recruitment of teachers and staff of color.

The district noted with pride its commitment to evidence-based Multilingual programming — and documented the "multi-million dollar funding shortfall" that prevents it from fully implementing what it knows works. This is the practical consequence of inadequate weighted funding: schools that know what to do, and want to do it, but lack the resources.

The Principle: Fund the Actual Cost

The 2004 Governor's Task Force stated the principle clearly and it has not changed: "Education funding must be tailored to relevant characteristics of each individual student, such as student disabilities, household or neighborhood poverty, pre-K or Kindergarten readiness, and the needs of English language learners."

Twenty years later, Minnesota has still not implemented this principle in any rigorous way. Categorical supplements exist, but they are set by political negotiation rather than cost analysis. The adequacy study described in the previous post would provide the factual foundation for setting those weights correctly — based on what education actually costs for each student population, not on what the Legislature finds politically comfortable.

Funding the actual cost of education is not a luxury. Under Minnesota's proficiency-based standards, it is a legal and moral obligation.

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Next in the series → Post 5 of 8

Evidence-Based Practices: Money Is Necessary But Not Sufficient — Adequate funding is essential, but money spent on the wrong things doesn't help students. The next post explores how states like Illinois, Wyoming, and Maryland have paired funding reform with requirements to use evidence-based instructional practices — and why Minnesota's own Read Act offers a promising model for what this can look like statewide.

The Case for Adequate Cost-Based Education Funding in Minnesota

Post 3 of 8 • Minnesota Education Finance Reform

This is the third post in an eight-part series on reforming Minnesota's K–12 education finance system, based on the Research Appendix drafted for the 2025 MDE Task Force on Education Finance. Post 1 introduced the series; Post 2 surveyed twenty years of unheeded warnings. This post makes the case for adequate, cost-based funding.

Minnesota's Unfinished Business: The Case for Adequate, Cost-Based Funding

We know education costs more for some students than others. Why won't Minnesota calculate how much more?

By Gerald Von Korff • jvonkorff.com

In 2004, Minnesota's Governor-appointed task force took an important step: it authorized a nationally recognized consulting firm to conduct a comprehensive study of how much money Minnesota districts actually need to provide every student with the opportunity to achieve state standards. The study was nearly complete when the Governor terminated the work. The adequacy study was never finished. The recommendations were never implemented.

In the two decades since, Minnesota has remained one of the only states in the country that launched — and then abandoned — such a study. Other states, including Kansas, Kentucky, New York, New Jersey, Washington, Illinois, Maryland, Wyoming, and many others, have not only completed adequacy studies but built their entire school finance systems around their findings. Minnesota has not. Ironically, Minnesota's funding is, in many respects fairer than many other states. It may well be that it would take less money in Minnesota to reach adequate funding for the students Minnesota now leaves behind. But that's not an argument for ignoring what it actually costs to meet the constitutional standard: enough funding to afford each student with an adequate education that meets all state standards. On the contrary, it means that if Minnesota would allocate enough funding, and pair that with effective practices and accountability, it should be easier to reform our broken school finance system.

This post explains what an adequacy study is, what it would likely reveal about Minnesota's funding levels, and why rebuilding the state's basic funding formula on a true cost basis is the essential first step in closing the achievement gap.

What Is a Funding Adequacy Study?

An adequacy study asks a simple but powerful question: how much does it actually cost to provide each student with a genuine opportunity to achieve state academic standards?

This is different from asking how much money Minnesota is currently spending, or what neighboring states spend, or what the Legislature is willing to appropriate. Those questions describe what is happening. An adequacy study asks what should be happening — and calculates the price.

There are two major methodologies used in adequacy studies. The first, called the Evidence-Based Funding approach, assembles educators and experts to identify the specific programs, staffing levels, and services that research shows are effective, then calculates the cost of providing them in each district. This approach has been used in Illinois, Wyoming, Arkansas, and many other states.

The second, developed by scholars over decades including Dr. Bruce Baker of the University of Miami, is an econometric cost model that uses statistical analysis of actual student outcomes — graduation rates, test scores, long-term earnings — to estimate what funding levels are associated with achieving defined outcome targets. This approach, used in a landmark 2021 national study, has the advantage of being grounded in real-world results rather than theoretical program designs.

Both approaches reach similar conclusions about Minnesota: the state is significantly underfunding the districts and students who need the most resources.

What the 2004 Taxpayers Association Study Found

Even the business-funded 2004 Taxpayers Association study — which used conservative assumptions and was explicitly skeptical of large funding increases — found that the cost of an adequate education in Minnesota varied from roughly $6,200 to over $14,000 per student depending on student characteristics. That is a more than two-to-one ratio.

The same study found that Minneapolis was underfunded by an estimated $138 million — more than $3,000 per student — even by its conservative standards. And that was in 2002 dollars. The authors acknowledged that their study was only intended to "illustrate the approach" and explicitly stated it could not be used as the basis for actual policy without further work. And that is exactly what this post advocates: that Minnesota must marshall all the evidence, develop evidence based cost estimates, and provide adequate funding with accountability guardrails to assure that districts are using adequate funding to deliver an adequate education to the students we are now leaving behind.

In other words, even the most fiscally conservative adequacy analysis available confirmed that Minnesota's highest-need districts were dramatically underfunded. And that study is now more than twenty years old.

What the 2021 Rutgers Study Found

The most rigorous recent national analysis, conducted by Dr. Baker's team at Rutgers and published by the Shanker Foundation in 2021, estimated the additional funding each Minnesota district would need to bring students to national average outcomes — a standard less demanding than full proficiency for all students.

The findings were striking. The least adequately funded districts in Minnesota included not only Minneapolis and St. Paul, but also Greater Minnesota districts like Worthington, St. Cloud, Chisholm, and Mabel-Canton, as well as suburban districts like Columbia Heights and Brooklyn Center. The pattern was unmistakable: districts serving higher concentrations of students of color, English Learners, students experiencing poverty, and students experiencing homelessness were systematically the most inadequately funded.

"Minnesota students who are English Learners, students of color — particularly Black students — and students experiencing poverty are significantly more likely to be enrolled in school districts where funding is below adequate."
— Summary of the 2021 Rutgers/Shanker National Study as applied to Minnesota

Why the Basic Formula Doesn't Work

Minnesota's basic education funding formula provides a uniform per-pupil amount to every district, with some categorical supplements for specific populations. The problem is that the basic formula was never set at a level derived from a rigorous analysis of what education actually costs. It was set — and has been incrementally adjusted — based on what the Legislature was willing to spend, not on what students need.

The 2004 Governor's Task Force put the principle clearly: education funding must "cover the full-dollar costs of ensuring Minnesota public school students have an opportunity to achieve state-specified academic standards." That standard has never been met.

Moreover, simply increasing the basic formula uniformly cannot remedy the specific deficits affecting special education, English Learner education, and education for students from low-income families. The 2004 Task Force recognized this explicitly: a uniform increase helps every district equally, but it does not address the disproportionate needs of districts serving the most disadvantaged students.

The core problem in plain terms: Minnesota currently sets its education funding based on what it is willing to spend, not on what it actually costs to deliver proficiency-level education to all students. Until those two numbers are aligned, the achievement gap cannot close — because the state is systematically under-resourced in the districts serving students who need the most support.

What a Genuine Adequacy Study Would Do

A properly designed adequacy study — the kind that was begun but never finished in 2004 — would accomplish several things.

First, it would establish an evidence-based cost estimate for providing every Minnesota student with a genuine opportunity to achieve state standards. This would give the Legislature an objective foundation for its funding decisions, replacing the current practice of incremental adjustments to a historically arbitrary baseline.

Second, it would quantify the cost differentials between students and districts, providing a principled basis for the categorical weights and supplements that are supposed to account for higher-need students. Right now, those weights are essentially political compromises. An adequacy study would replace them with research-grounded cost estimates.

Third, it would establish accountability: if the state commits to funding education at the level the adequacy study determines is necessary, it becomes much harder to justify underfunding without confronting the direct consequences for student outcomes.

What Other States Have Done

Minnesota is an outlier. Dozens of states have conducted comprehensive adequacy studies and rebuilt their finance systems around the findings. Some of the most instructive examples:

Wyoming has contracted with a consulting team to recalibrate its education funding model every five years since 2005. Its finance system is explicitly designed to fund the programs and staffing levels that research identifies as effective. The system is regularly updated as costs change and new evidence emerges.

Illinois enacted a landmark Evidence-Based Funding reform in 2017, creating a professional review panel to regularly recalibrate the state's funding model and a balanced accountability committee to monitor outcomes. The reform has driven hundreds of millions of new dollars to the state's most underfunded districts.

Maryland, after commissioning a comprehensive adequacy study, enacted the Blueprint for Maryland's Future in 2021 — committing to a $3.9 billion increase in education funding over ten years, paired with accountability provisions and a mandate to implement effective practices. The Blueprint's five pillars — early childhood education, high-quality teachers, college and career readiness, additional resources for high-need students, and accountability — represent exactly the kind of comprehensive approach Minnesota needs.

In each of these cases, the adequacy study was not the end of the process — it was the beginning. It provided the factual foundation for legislative action.

The Ask: Finish What Was Started in 2004

Minnesota's first immediate priority should be to commission the adequacy study that was terminated twenty years ago. The study should use both the Evidence-Based Funding methodology and the econometric approach pioneered by Dr. Baker's team, so that the Legislature has the benefit of both perspectives. It should be completed within eighteen months and used as the basis for rebuilding the basic funding formula.

This is not a radical ask. It is, in fact, the minimum that responsible governance requires: before deciding how much to spend on education, determine how much it actually costs.

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Next in the series → Post 4 of 8

Funding Students, Not Just Schools — Even if Minnesota sets its overall funding at the right level, the money won't reach the students who need it most without a dramatic overhaul of how funding is weighted for student characteristics. The next post explains why per-pupil funding must reflect the real, higher cost of educating children facing poverty, language barriers, disability, and other challenges — and what that means in practice.

Twenty Years of Unheeded Warnings: Leaving Children Behind

Post 2 of 8 • Minnesota Education Finance Reform

This is the second post in an eight-part series on reforming Minnesota's K–12 education finance system. The series is based on the Research Appendix drafted for the 2025 MDE Task Force on Education Finance. Start with Post 1 for an overview of the series and why it matters.

Twenty Years of Unheeded Warnings

Report after report has reached the same conclusion. Why hasn't Minnesota acted?

By Gerald Von Korff • jvonkorff.com

Imagine receiving the same diagnosis from twelve different doctors over twenty years — and choosing, each time, not to begin treatment. That is essentially the story of Minnesota's response to its education funding crisis.

Since the early 2000s, a remarkable parade of task forces, academic studies, federal reserve analyses, university researchers, and legislative auditors have all reached the same conclusion: Minnesota's school finance system is structurally inadequate for the students who need it most, and the achievement gap that results is not closing. In some respects, it is growing.

Understanding this history — the pattern of diagnosis without treatment — is essential context for understanding why the reforms this series advocates are so urgent. This is not a new problem awaiting a new solution. The solutions are known. What has been missing is the sustained political commitment to implement them.

The Reports: A Parade of Warnings

2004

Governor Pawlenty's Blue-Ribbon Task Force

Governor Pawlenty convened a task force chaired by Superintendent Rick Dressen, which acknowledged that "Minnesota has one of the largest achievement gaps in the nation." The task force recommended a cost-based funding formula sufficient to ensure all students could achieve state-specified academic standards — and was authorized to commission a national expert to calculate exactly how much that would cost. The study was nearly complete when the Governor terminated the task force's work. Minnesota is perhaps the only state that initiated, and then stopped, a funding adequacy study before it was finished.

2004

Minnesota Taxpayers Association Adequacy Study

Commissioned by the Minnesota Taxpayers Association and financed by business groups, this study used sophisticated statistical modeling to estimate what adequate funding would cost. It found that the cost of an adequate education varied from roughly $6,200 to over $14,000 per student depending on student characteristics — a more than two-to-one differential. Its conclusion, notably, was that closing the achievement gap through adequate funding would be "cost prohibitive" and "politically unfeasible." The study's own authors, however, cautioned that it could not be used as a basis for actual policy without further work to define adequacy and involve stakeholders.

2009

Minnesota Budget Trends Commission

This commission warned of a rising dependency ratio as baby boomers retired and the workforce shrank. Its solution: Minnesota must urgently address educational attainment gaps in the K–12 system, because those students would need to support the state's future economic growth. "We will need to utilize the talents of all of our younger citizens," the Commission wrote, "no matter their family income, race, or ethnicity."

2011–2013

Governor Dayton's Task Force

This task force repeated the warnings of its predecessors: "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." Its recommendations focused largely on reallocating existing resources rather than adding new ones, as the state faced significant fiscal constraints. Some of its proposals — including all-day kindergarten — were eventually enacted. The achievement gap, however, persisted.

2016

Minnesota Education Equity Partnership (MnEEP)

MnEEP connected the dots between Minnesota's achievement gap and its economic future. As the state's student population was becoming more diverse — more students of color, more English Learners, more students from low-income families — the proportion of students not achieving educational proficiency was growing. The economic stakes were enormous. Researchers quoted in the report estimated that closing racial and ethnic achievement gaps nationally could make the U.S. economy nearly $2.3 trillion larger by 2050.

2019

Federal Reserve Bank of Minneapolis

The Minneapolis Fed joined the chorus: "Minnesota's education achievement gaps have persisted for decades despite implementing policies designed to close them." This was not an ideologically motivated advocacy report — it was the Federal Reserve, assessing the economic consequences of educational inequity.

2020

Governor Walz's 80-20-10 Report

The most recent gubernatorial task force before the current one documented that test scores had stagnated over twenty years while the percentage of students of color doubled. The report found that the buying power of general fund revenue had declined by 10% over the preceding decade — meaning districts were effectively receiving less money in real terms even as the student population they were asked to serve became more challenging.

2021

Rutgers University / Shanker Foundation National Study

Using the National Education Cost Model, researchers estimated the additional funding each Minnesota district would need to bring students to national average outcomes. The least adequately funded districts included Minneapolis and St. Paul, but also many Greater Minnesota districts — Worthington, St. Cloud, Chisholm — and suburban districts like Columbia Heights and Brooklyn Center. The pattern was clear: districts serving higher proportions of students of color, English Learners, and students qualifying for free and reduced-price meals were the most severely underfunded.

2022

Office of the Legislative Auditor

Minnesota's own legislative auditor concluded: "Minnesota has had long-standing academic achievement gaps, despite efforts by MDE, school districts, and charter schools to implement policies designed to close them." The auditor also documented that the accountability mechanisms in place were toothless — MDE had insufficient staff, insufficient authority, and insufficient tools to actually require improvement from districts that were failing their students.

2022

Federal Reserve Bank of Minneapolis (Updated)

"Data show that Minnesota's public schools consistently underserve students from low-income families, Indigenous students, and students of color." The Fed had to say it again, three years later, because nothing had changed.

The Pattern: Why Has Nothing Changed?

Reading through these reports, a pattern emerges. Each successive effort acknowledges the prior warnings, documents that little has changed, and makes recommendations. Some partial reforms are enacted. But the structural problem — a funding formula that does not cover the actual cost of educating high-need students to proficiency — is never fully addressed.

Why? Several forces are at work.

First, there is genuine fiscal pressure. Adequately funding education for all students is expensive, and Minnesota has faced recurring budget constraints that make large new commitments politically difficult.

Second, there is a strong tradition of local control. Many Minnesotans — including many educators and school board members — are deeply resistant to state-level accountability mechanisms, viewing them as interference with local decision-making. This attachment to local control, however well-intentioned, has allowed persistent failure to continue without consequence.

Third, the students most harmed by this system are also among the least politically powerful. Low-income families, families of color, and immigrant communities have less lobbying capacity than the interests that benefit from the status quo.

"Diffuse local control empowers the powerful, the advantaged, and interests that may be seeking to preserve the status quo."
— Research Appendix, 2025 MDE Task Force

Fourth — and perhaps most fundamentally — there has been a persistent belief that the problem is not really about money, but about practices, culture, or effort. This belief, while containing a grain of truth (money spent ineffectively does not help students), has been used repeatedly to avoid the harder question of whether Minnesota is actually spending enough in the right places. The research, as we will explore in later posts, is clear that it is not.

The Cost of Waiting

Twenty years of inaction has a cost. Each cohort of students who passed through inadequately funded schools represents a generation of unrealized potential — lower graduation rates, lower earnings, greater reliance on public services. The Federal Reserve's concern is not abstract: an undereducated workforce is an economic drag that compounds over decades.

Meanwhile, Minnesota's student population has continued to change. The share of students of color — the students most severely underfunded relative to their needs — has doubled. The problem is not getting smaller while we wait.

The 2025 Task Force represents another opportunity to break this pattern. The research is, if anything, more compelling than it was in 2004. The question is whether this time, Minnesota will act on what the evidence requires.

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Next in the series → Post 3 of 8

The Case for Adequate, Cost-Based Funding — Minnesota is perhaps the only state that started and then stopped a school funding adequacy study before completing it. The next post explains what an adequacy study is, what it would reveal about Minnesota's funding levels, and why rebuilding the basic funding formula on a true cost basis is the essential first step toward closing the achievement gap.

Minnesota's Education Funding Must be Reformed: A Series

Series Introduction • Post 1 of 8

Minnesota Is Failing Its Most Vulnerable Students — And Has Been for Twenty Years

An eight-part series on what the research says, what other states have done, and what Minnesota must do now.

By Gerald Von Korff • jvonkorff.com

Over the past two decades, Minnesota has been warned — repeatedly, by governors, legislators, federal economists, university researchers, and its own auditors — that its public school finance system is failing the students who need it most. Students of color, students from low-income families, English Learners, and students with disabilities are being systematically underfunded. The achievement gap is wide, persistent, and in many respects growing.

And yet, despite report after report, task force after task force, the structural problems remain unaddressed.

In 2025, the Minnesota Department of Education convened a new Task Force on K–12 Education Finance. This post is drawn from the Task Force's Research Appendix — a comprehensive review of twenty years of evidence on Minnesota's achievement gap, what other states have done to address funding adequacy, what the research says about money and outcomes, and what a genuine accountability system looks like.

This blog series draws on that research to make the case — in plain language — for the reforms Minnesota needs. It is written not just for policymakers and educators, but for any Minnesotan who cares about whether our public schools are delivering on their promise.

Why This Matters — and Why It Hasn't Been Fixed

Minnesota has a deserved reputation as one of the country's better-educated states. Average test scores are high. Graduation rates are solid. But those averages mask a deeply troubling reality: Minnesota also has one of the largest achievement gaps in the nation between white students and students of color, between affluent students and students living in poverty.

This is not a new problem. It has been documented since at least the early 2000s. What is remarkable — and troubling — is how little progress has been made despite so many well-intentioned efforts.

"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%."
— Minnesota School Finance Working Group, 2020

The reasons for this failure are structural, not personal. Minnesota's school finance system was not designed to deliver proficiency-level education to all students regardless of background. It was built for a different era — one in which schools were expected to provide instruction, not guarantee learning. When Minnesota (and the country) shifted to outcome-based, proficiency-focused standards beginning in the 1980s, the cost of education for disadvantaged students rose dramatically. The funding system never caught up.

What This Series Will Cover

Over eight posts, this series walks through the five reforms the research points to as necessary and sufficient to finally close Minnesota's achievement gap. Each post corresponds to a section of the research memo prepared for the Task Force:

The Eight Posts in This Series

1. Post 1 (this post): Series introduction — the problem, why it persists, and what we'll cover.
2. Post 2: Twenty years of unheeded warnings — the reports, the data, and the pattern of inaction.
3. Post 3: The case for adequate, cost-based funding — why the current formula doesn't work and what a real adequacy study would reveal.
4. Post 4: Funding students, not just schools — why per-pupil funding must be weighted to reflect the real cost of educating each child.
5. Post 5: Evidence-based practices — what works, and why money alone isn't enough without guardrails on how it's spent.
6. Post 6: The accountability gap — why local control has not produced systemic improvement and what a real accountability system looks like.
7. Post 7: Continuous improvement — how states like Wyoming and Maryland build recalibration into their finance systems.
8. Post 8: What Minnesota must do now — the six immediate legislative priorities that would put the state on a new path.

A Word About the Research

This series is grounded in the Research Appendix drafted for the 2025 MDE Task Force, drawing on peer-reviewed academic research, state-commissioned adequacy studies from across the country, federal reserve analyses, legislative auditor reports, and the work of leading school finance scholars including Dr. Bruce Baker of Rutgers University and Dr. Allan Odden of the University of Wisconsin.

I have tried to make this accessible to general readers without sacrificing accuracy. Where I cite studies, they are real. Where I draw conclusions, I try to be clear that they are my own read of what the evidence requires.

Minnesota has the knowledge. It has the research. What it has lacked is the political will to act. My hope is that this series contributes, in some small way, to building the public understanding that makes action possible.

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Next in the series → Post 2 of 8

Twenty Years of Unheeded Warnings — The next post surveys the remarkable parade of task forces, academic studies, federal reserve reports, and legislative audits that have all reached the same conclusion: Minnesota is failing its most vulnerable students, and the situation is getting worse. Understanding this history is essential to understanding why reform is so urgent.

Expert Report in Cruz Guzman case documents MSP and St. Paul's Unconstitutional Failure to Provide an Adequate Education

 The ten year old Cruz Guzman case is at a stage where parties must reveal their expert opinions.   The plaintiffs in Cruz Guzman claim that there is a causal link between racial composition of schools and academic outcomes.  They assert that if Minnesota would require all schools to be racially diverse that might improve academic outcomes and Minnesota's constitution therefore requires judicial relief ordering the economic and racial integration of Minneapolis and St. Paul schools.  Representatives of Charter Schools, including Higher Grounds charter school, assert to the contrary, that schools serving non-diverse populations can deliver an adequate education.  Implicitly, their position supports an inference that other defects in Minnesota's public education system account for Minnesota's failure to deliver an adequate education to so many students 

On April 15, 2026, the Court posted the report of Higher Ground's expert.   The intervenors’ expert report—while primarily aimed at disputing a causal link between racial composition and academic outcomes—nonetheless provides substantial factual support for the conclusion that public schools in Minneapolis and Saint Paul are not providing an adequate education, and that this inadequacy falls disproportionately on students of color and students from low-income backgrounds.   While challenging an integration conclusion, the report provides powerful evidence that the State of Minnesota is violating the constitutional education clause by failing to provide the adequate education that meets all state standards required by the Supreme Court's Skeen decision.   

Here are the key findings in the expert's report supporting an inadequate education finding. 

1. Majority of Students Are Not Meeting State Academic Standards

The report relies on Minnesota’s statewide assessments, which are explicitly aligned to the Minnesota Academic Standards. Students are deemed “proficient” only if they meet or exceed those standards.  Using this benchmark, the report finds that:

• In Minneapolis Public Schools, only about 35.79% of students (including students of all races and incomes) are proficient in math and 40.79% in reading.

• In Saint Paul Public Schools, proficiency is even lower: approximately 26.55% in math and 34.82% in reading.

These figures establish that a substantial majority of all students in both districts are not meeting state-defined academic expectations, which is strong evidence of systemic inadequacy if adequacy is defined by meeting those standards.

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2. Large Numbers of Schools Are Identified as Failing Under the State’s Own Accountability System

The report uses Minnesota’s North Star accountability system, which identifies schools for “targeted” or “comprehensive” support based on low performance. It finds that:

• Many schools in Minneapolis and Saint Paul are formally identified as low-performing under this system.

• Numerous schools show extremely low proficiency rates, often in the single digits or teens in both math and reading.

• These schools are not marginally underperforming—they are persistently and severely below state expectations.

This is particularly significant because it reflects the State’s own determination that these schools are failing to deliver acceptable educational outcomes.  

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3. The Inadequacy Is Systemic, Not Isolated

The report repeatedly emphasizes that:

• “Several but not all” schools are low-performing—but the number of such schools is large.

• Districtwide proficiency rates confirm that the problem is not limited to a handful of outliers.

Taken together, the data show a systemic pattern of inadequate educational outcomes across substantial portions of both districts, rather than isolated failures.

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4. Disproportionate Impact on Students of Color

Although the report rejects racial concentration as a causal mechanism, it documents a clear and important distributional fact:

• Schools with the lowest performance levels tend to have higher concentrations of students of color.

• The overall achievement patterns show persistent racial disparities in academic outcomes.

• Students of color are therefore more likely to be enrolled in schools that are failing under state standards.

This supports the conclusion that educational inadequacy is disproportionately experienced by students of color, regardless of the report’s views on causation.  

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5. Disproportionate Impact on Low-Income Students

The report also presents evidence related to socioeconomic status:

• Schools with high concentrations of students eligible for free or reduced-price lunch (FRPL) tend to have lower achievement levels.

• When the report analyzes school-level poverty composition (e.g., percent FRPL), it finds statistically significant relationships between higher poverty concentrations and lower achievement, although suggesting that the effect sizes are modest.

• Students from low-income backgrounds are therefore overrepresented in the lowest-performing schools.

This establishes that educational inadequacy is also disproportionately borne by low-income students.

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6. Persistent Disparities Across Schools and Student Groups

The report’s descriptive and regression analyses together show that:

• Achievement gaps across schools are large and persistent.

• These gaps align with school-level concentrations of disadvantage, including both race and income.

• Even when controlling for individual student characteristics, the overall distribution of outcomes reflects deep structural disparities in where students are educated and what outcomes they experience.

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7. The Report’s Own Framework Links Adequacy to State Standards

 The expert acknowledges that defining “adequacy” is complex, but adopts a practical approach: Evaluating performance relative to state academic standards and state accountability systems.

Under that framework:

• Schools failing to produce proficiency in core subjects and

• Schools identified as low-performing by the State

are, by implication, not delivering an adequate education.

Even though Higher Ground's expert rejects racial composition as a causal driver of achievement, the report provides strong factual support for the following conclusions:

• Public schools in Minneapolis and Saint Paul are not providing an education that enables most students to meet state academic standards.

• This failure is widespread and systemic, affecting a large share of schools and students.

• Students of color and low-income students are disproportionately concentrated in the lowest-performing schools and therefore bear the greatest burden of this inadequacy.

In short, the report undermines a segregation-based causation theory, but affirmatively documents the existence, scale, and inequitable distribution of educational inadequacy in these districts.

This then is the expert report of a party to the Cruz Guzman case who opposes the relief that the plaintiffs ask for.  They intervened in the case as defendants in support of the State. Yet, their own expert is documenting the failure of the state to provide an adequate education that meets all  state standards required by the Minnesota constitution.     

That poses an important question:  are the parties in the Cruz Guzman dedicated to fixing Minnesota's unconstitutional education system, or they merely fighting over whether schools must be integrated or not.   In our next post we will argue that Minnesota's constitutional education clause requires the courts must be a forum for providing an adequate education, not merely a sparring ground in which parties fight over which solutions won't work  

Lessons from Baker and DiCarlo: Combine Adequate Funding with Integration

JVonkorff on Education has been advocating that to deliver a constitutionally required adequate education to students of color, lower income students and English language learners Minnesota must combine three fundamental reforms: 

(1) fully funding the cost of delivering that education; 
(2) Rigorous accountability for efficiently implementing effective practices, and
(3) fostering racial and economic school integration. 

While integration is a worthy end in itself, without adequate funding, integration schemes are unlikely to fulfill the constitutional requirement. In Segregation and School Funding: How States Reinforce Inequality and What to Do about It “Bruce D. Baker, Ph.D., a nationally recognized expert in school finance and education policy and a professor at the University of Miami, and Matthew P. Di Carlo, Ph.D., a senior fellow at the Albert Shanker Institute provide convincing research and experience based evidence that neither integration alone, nor increased funding alone, will deliver the adequate education to which Minnesota integration and school finance advocates aspire.

 Integration advocates rely on research supporting significant educational benefits to students attending racially and economically integrated schools. Unquestionably, Minnesota desperately needs comprehensive reform to address the educational needs of students of color, English language learners, and lower income students. For example, only 17 percent of black students in Minneapolis who are not English language learners score proficient in reading, as compared to 74 percent of white students, and that gap is growing. Sixty four percent of Minneapolis black students who are not English language learners score in the lowest “Does not Meet” category as compared to 12 percent of Minneapolis white students. Students in that category read significantly below grade level, have difficulty understanding the main ideas of grade-level passages and struggle to interpret vocabulary and context. 

Something radical clearly must be done: Baker and Di Carlo’s work suggests that integrating schools can make a contribution, but to deliver an adequate education to those students we must combine integration with enough funding to deliver an adequate education that meets all state standards, just as the Minnesota Supreme Court’s Skeen decision requires. 

The challenge facing policymakers is not simply how much Minnesota spends on education, but whether the state is spending enough—and in the right places—to ensure that every student has a genuine opportunity to meet Minnesota’s academic standards. Education finance scholars Bruce Baker and Matthew DiCarlo argue that the relationship between school segregation and school funding is not accidental but systemic. As they explain,

 it is helpful to think of segregation and funding inequity as part of a self‑reinforcing cycle—a national problem whose causes and consequences vary across regions but are often especially resistant to policy solutions outside the South (Baker & DiCarlo, p. 3).

 When racially and economically isolated schools are underfunded, too many of their students do not thrive educationally.  Consequently, parents are scared by the published test scores and tend to migrate to other schools, even if their own students seem to be doing well. As the percentage of underfunded students rises, the school is forced to implement unattractive reductions and the downward spiral continues

 In Segregation and School Funding, they write:

“Many higher-poverty, disproportionately Black and Hispanic districts have to spend a lot more than their lower-poverty, whiter counterparts to achieve the same outcomes, but they typically spend about the same or just a little bit more, at best. This segregation-fueled disconnect between what districts need and what they actually get is the beating heart of school funding inequity.” (p. 4) 

Although their new book does not target Minnesota, it identifies six important lessons for Minnesota educators and for integration and funding advocates alike: 

Lesson 1: Equity Does Not Mean Equal Funding One of Baker and DiCarlo’s central insights is that equitable school funding is not the same as equal funding:

“Equal opportunity… is not just about how much districts spend. It is, rather, about how much they spend relative to what they need.” (p. 19) 

Indeed Minnesota constitutional education clause case Skeen v. State (1993) adopts this very principle. In Skeen a group of school districts—primarily from non‑metropolitan areas—argued that the Minnesota Constitution requires the state to provide the same funding resources per student to every school district. The Minnesota Supreme Court rejected that argument because equity requires greater funding to schools overcoming greater needs. The Court held that the constitutional requirement is not equal funding across districts, but adequate enough funding to afford each student with an adequate education that meets Minnesota’s educational standards. In other words, the Court recognized that the goal of school finance is not equal dollars but enough funding to provide an equally adequate education that meets all state standards. 

The Skeen requirement aligns closely with Baker and DiCarlo’s analysis. Students arrive at school with very different needs. Students living in poverty, English language learners, and students who have historically been underserved often require additional instructional support, specialized services, and expanded learning opportunities in order to meet the same academic standards as their peers. For that reason, equitable school finance systems must allocate more resources to students with greater needs. The goal is not equal spending, but equal opportunity to meet state standards. 

Lesson 2: Adequate Funding Must Be Defined by the Cost of Meeting Standards As a corollary to Lesson 1, Baker and DiCarlo emphasize that the real question for school funding systems is not simply how much money is spent, but whether schools have the resources necessary to achieve the outcomes states expect of them. They write that school finance systems should: “Account for differences in the cost of achieving equal educational opportunity across school districts.

Proper determination of districts’ costs—setting ‘funding targets’ for each district… is the foundation of any state’s system.” (p. 26) 

In their framework, cost refers to the amount of funding a district needs to reach a particular educational goal. If those costs are miscalculated—or ignored—then the entire funding system may fail to provide equal opportunity. In practical terms, Minnesota must answer a fundamental question: What does it cost to ensure that students from low‑income families, students of color, and English language learners can meet Minnesota’s academic standards? 

Lesson 3: Segregation Concentrates Educational Need Baker and DiCarlo also emphasize that school funding cannot be understood separately from patterns of racial and economic segregation.

“Districts serving larger shares of students of color also tend to serve larger shares of low-income students, special education students, English language learners, and other groups that require more funding to achieve common outcome goals.” (p. 34).

 Schools serving high concentrations of poverty and language diversity often require smaller class sizes, additional literacy and language support, expanded counseling and social services, extended learning time, and specialized instructional staff. When those schools are underfunded, parents with choices are driven away to avoid schools that appear to be failing. 

Lesson 4: Integration Alone Is Not Enough Advocates for integration have invested significant effort in promoting school integration through litigation and advocacy.   Research shows that integration can produce important benefits. But Baker and DiCarlo caution that integration alone cannot solve educational inequality. 

“Disparities in funding adequacy are a big factor in maintaining those gaps, and closing adequacy gaps is a key tool for narrowing outcome gaps.” (pp. 48–49) 

Lesson 5: Money Matters Citing modern research, Baker and Di Carlo write: “There is an emerging consensus… that spending more improves outcomes, and spending less hurts outcomes. Money leads to better results because the things that cost money lead to better results.” (p. 23) 

Recap: Integration and Funding Reform Must Be Addressed Together Baker and Di Carlo write: 

“The idea that one can choose between racial and economic segregation, or between racial and economic inequality, is false. Breaking the cycle of unequal opportunity and unequal outcomes requires addressing both.” (p. 54) 

Equity in school funding does not mean treating every school the same. It means ensuring that every student—regardless of race, income, or language background—has access to the resources required to succeed.

Baker and DiCarlo's New Book Calls for a Unified Strategy to Combine Funding Reform and School Integration

 JvonKorff on Education has been urging that Minnesota must fix its broken school funding system to provide enough funding to provide students of color, lower income students and English language learners with an adequate education that meets all state standards, as the constitution requires.  There can be no legitimate dispute that Minnesota's current public system is failing too many students of color, lower income students and English language learners. In Segregation and School Funding: How States Reinforce Inequality and What to Do About It, Bruce Baker and Matthew Di Carlo, two leading school finance scholars have urged that states like Minnesota must combine school finance reform and school integration -- economic and racial -- as one unified strategy.  Their book is a welcome wake up call to those who mistakenly advocate for simplistic single-factor fixes to Minnesota's system of public education.  This post and a few following posts will summarize the wisdom delivered in Baker and Di Carlo's "Segregation and School Funding," but that summary will be no substitute for reading this important contribution.   Take my advice, and get yourself a copy.  

The single factor approach to fixing Minnesota's public education identifies just one thing to solve a complex problem:  Integration, school choice, adequate funding, charter schools, or vouchers.   For over two decades advocates have urged that Minnesota's constitution requires full and adequate funding, enough funding to afford each student with an adequate education that meets all state standards under the Skeen decision.   But the legislature has never attempted to implement that decision.  Indeed, since 2004, the state of Minnesota has not even attempted to determine what it would cost to deliver an adequate education the students Minnesota schools now leave behind. 

For well over two decades others have argued that school integration is the solution, but those integration cases provided no permanent long lasting solution.   Decades ago, Minnesota advanced one of the country's first aggressive charter school reforms, combined with open enrollment, asserting that school choice and school experimentation. While school choice has provided a solution for individual students, generally, at scale, charters have not provided a better education to those students.   

The endnote of Baker and Di Carlo's book exclaims: 

More than seventy years after Brown v. Board of Education promised equal educational opportunities for students of color, US public schools remain stubbornly segregated, with large gaps in the adequacy of funding by race and income.  In Segregation and School Funding, Baker and Di Carlo reveal the cycle that keeps resource starved schools at a perpetual disadvantage and shows how to break it. 

Baker and Di Carlo argue for a multi-faceted multi-factor solution that marries school integration with full funding based on "full-dollar cost funding " of education students with greater needs.   I commend that book to you as providing an understandable window on school funding and integration issues. 

Three Fundamental Causes. Inadequate funding is only one of the three major causes of Minnesota's failure to address the educational needs .  The first, of course, is Minnesota's persistent failure to deliver enough funding to cover the cost of delivering an adequate education to schools serving students of color, lower income students and English language learners.  The second is racial and poverty concentration.   Because Minnesota's legislature has never attempted to deliver funds necessary to cover the full cost of delivering an adequate education to those students, for school districts with very high percentages of underfunded students, those funding shortfalls mount up and create a cycle of inadequacies. 

A third is a lack of accountability for utilizing best practices.  Minnesota has operated under a radical local control paradigm, in which school districts are free to ignore best practices, to keep on doing what they've been doing, despite mounting evidence that these strategies are not working for the students with greatest needs.  The danger of funding with lack of accountability has been starkly illustrated by the recent Minnesota fraud scandals.  There is no evidence at all, that Minnesota school districts are characterized by fraud: in fact, when fraud is discovered, it is widely recognized as a great aberration. But there is evidence that Minnesota districts and charters are not subjected to adequate supervision for efficient use of best practices.   

Baker and Di Carlo's book focuses primarily on major metropolitan areas such as Baltimore, Kansas City, and Oakland, but their recommendations apply to Minnesota school districts as well. In fact, in an analysis using Minnesota education data, Baker and colleagues examined whether Minnesota's funding is sufficient to meet the needs of students who historically have faced educational barriers  Their analysis of Minnesota's school finance system was summarized in an article published in Minneapolis School Voices. 

The analysis, sponsored by the Shanker foundation,  assessed whether each Minnesota district had enough funding to deliver national average outcomes to all students. This average-outcomes test is a lower standard that the Minnesota constitutional standard --enough funding to afford each student with an adequate education that meets all state standards.   Even though Minnesota’s overall K-12 funding ranks above the national average, the Shanker foundation data found that Minnesota's statewide total funding masks deep and persistent inequities in how the money is distributed. While most school districts have enough funding to meet average academic outcomes, districts with higher concentrations of students who need extra academic support do not have adequate funding to serve those students effectively. (Minneapolis Schools Voices):

“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.” 

This finding matters because the students who need the most – including those qualifying for free and reduced-price meals, students experiencing unstable housing, students of color, and English learners – are significantly more likely than their peers to be enrolled in districts where funding is below adequate. 

For example, the study showed:

• About 17.4 % of Minnesota students are enrolled in districts with below-adequate funding — yet students identified as needing the most from public education are two to four times more likely than other students to be in those districts.

• English Learners and students experiencing poverty face particularly stark disparities in funding adequacy compared to their peers. 

Segregated Schools exacerbate inadequate funding: Baker and Di Carlo's work describe how segregation and inadequate funding feed on each other.  There are many reasons why segregated schools may result in impaired educational results.  Baker and Di Carlo point out that states general fail to provide districts with enough funding for students with greater needs.  

Equal opportunity is not just about how much districts spend.  It is, rather, about how much they spend relative to what they need.   Due in large part to racial and economic segregation, districts vary widely in terms of how much they need to spend to get their students’ performance up to where it should be.  …This imbalance of costs and fiscal capacity, driven by segregation, is a the core of school funding inequity.  Modern school finance systems are supposed to close those gaps.   Baker at 19-20

In following posts, Jvonkorff on Education explore Baker and Di Carlo's insights further.   In the meantime, the book is readable and persuasive.   Get on the net and buy yourself a copy.