Minnesota's Increased Compensatory Funding Must be Accompanied by Robust State Supportive Accountability

The legislature has finally implemented significant compensatory funding increases to take effect in 2026 and 2027. But without major systemic improvements to assure effective use of those funds, the increased funding will fail to make adequate improvements in educational results. My last post described what the Minnesota Legislature is doing to increase compensatory revenue. This post is about what it is not yet doing. Minnesota has no effective system to make sure that more compensatory money turns into better teaching and learning for the students who generate it.

Too many low income students, too many English language learners, and too many students of color are being failed by the current system. Recent history illustrates the need for more robust state accountability for proper use of state funding. Our public school districts are largely free of fraud: but it has become increasingly recognized that when the state creates a supportive infrastructure and accountability, significant educational improvements may follow. Under what I call Minnesota’s radical local option approach, the state largely abdicates its responsibility for delivering the adequate education that the constitution requires. How the money is used, and whether it works, is treated as almost entirely a local decision. Compensatory education has some statutory limits, but there is no meaningful mechanism to enforce those limits. And, there are powerful forces at the local level that dilute the maximum benefit of this new money. Advocates for students who are advantaged have outsized power in many districts. The collective bargaining process tends to support distributing new funds to all employees equally, and to translate new funding to increased compensation to all employees, whether or not they serve compensatory-eligible students, instead of buying additional staff and new programs.

Minnesota’s radical local control system is unconstitutional and ineffective for the students who need education the most. The Minnesota Constitution does not allow the state to step aside. It makes a thorough and efficient system of public schools the Legislature’s duty. Unless the Legislature pairs a full, robust increase in compensatory funding with systemic and supportive accountability, these students will continue to be denied an adequate education and Minnesota’s violation of the constitution will persist. The 2027 compensatory education funding reforms, and the task force recommendations, present a genuine opportunity for Minnesota to fix our broken system.

A real increase, with three contingencies

If the Legislature and the new governor fully fund the 2027 compensatory education legislation, districts serving low-income students will see a significant improvement in compensatory funding. But whether that improvement reaches students depends on three things.

1. Appropriation. The Legislature can decline to appropriate the authorized amount. A formula on paper buys nothing.
2. Dilution. A variety of local district practices can shrink the share of the money that actually benefits the students who generate it. I describe three of them below.
3. Effectiveness. Even money spent directly on the targeted students can be spent on practices that do not work.

The Legislature controls the first contingency directly. The last two are where Minnesota has chosen to look away.

Progressive on paper, because of two cities

Minnesota’s reputation for progressive school funding rests largely on the extra funding Minneapolis and St. Paul from local property tax referendum revenue. That is the central finding of Bruce Baker’s new analysis, Minnesota’s Equal Educational Opportunity Problem (October 2026).

In national rankings, Minnesota placed 5th of 50 states in 2024 for the progressiveness of state and local revenue. However, Baker reran the numbers without Minneapolis and St. Paul, because those two cities have very high local referendum support. Including Minneapolis and St. Paul, the “average district” with 30 percent child poverty receives 35 percent more state and local revenue per pupil than a district with no poverty. Without Minneapolis and St. Paul, the advantage computed for the other districts falls to 9 percent. Across 2009 to 2024, the two cities account for roughly three-quarters of the state’s progressiveness. The rest of the state falls way short of Minnesota’s reputation for progressive funding.

The cause is the property tax referendum system. State aid is modestly progressive everywhere. But high-poverty districts outside the two cities raise $2,784 less per pupil in local revenue than the lowest-poverty districts, which cancels the state’s extra aid almost exactly. Minneapolis and St. Paul voters have approved generous operating levies. Much of outstate Minnesota cannot match them, especially the districts serving high rates of poverty and non-white students.

My home district, St. Cloud, shows what that means for real students. In Baker’s 2024 data, St. Cloud was 70 percent free and reduced-price lunch eligible, and 40 percent Black. In the test year, it spent $17,140 per pupil, about $3,200 more than neighboring Sartell-St. Stephen. But St. Cloud spent only 55 percent of what Baker’s cost model estimates it would need to reach national-average outcomes. Sartell-St. Stephen spent 120 percent. In other words, Sartell had more money than it needed to acheive national aerage outcomes. Although St. Cloud spends more than Sartell, St. Cloud is far less adequately funded, because its students need more, a problem that is exacerbated because the District is not using referendum supported funding. (Keep in mind that Baker’s national-average-outcomes test is a very low bar, far lower than MCA or NAEP proficiency levels, and well under Minnesota’s constitutional test.)

That is the context for compensatory revenue. Outside the two cities, it is one of the few tools the state has to direct money to need without relying on local voters.

Compensatory money is now growing much faster than the basic formula

Until recently, compensatory revenue grew at about the same rate as the basic formula. From FY2023 to FY2025 the basic formula allowance rose about 6 percent, and compensatory revenue per pupil at the top of the scale rose about 7 percent. That kept existing programs running. It did not buy new ones.

FY2025 to FY2027 breaks that pattern. Over those two years the basic formula allowance rises about 5.5 percent. Compensatory revenue per compensatory pupil will rise 44 percent in buildings at or below 80 percent concentration, and up to 79 percent at the top.

	FY2025	FY2027 (current law)	Increase
Basic formula allowance, per pupil	$7,281	$7,683	5.5%
Compensatory revenue per compensatory pupil, 100% concentration	$3,865	$6,936	79%
Compensatory revenue per compensatory pupil, 80% concentration	$3,865	$5,549	44%

Consider a hypothetical high-poverty building of 100 students, with 80 eligible for free lunch and 20 for reduced-price lunch. Its compensatory revenue rises from about $347,900 in FY2025 to about $561,800 in FY2027. That is about $214,000 more, or roughly $2,100 per eligible student, a 62 percent increase. Under the Task Force proposal, which would count reduced-price students fully, the increase over FY2025 would be about $346,000, or roughly $3,500 per student.

Those amounts are way larger, if fully funded, than in previous years. The current-law increase equals about 28 percent of the basic formula allowance; the Task Force recommendation would increase about 45 percent. In a building of four classrooms, $214,000 to $346,000 could pay for two or three additional interventionists, or several well-trained paraprofessionals, or high-dosage tutoring for every student with money left for coaching.

(This example assumes the building’s eligible-student count holds steady. In buildings where counts fell after the shift to universal meals and direct certification, part of the higher rate only offsets lower counts.)

So the question this post asks is simple. Will that money buy more high quality staff and more effective programming for these students? Nothing in Minnesota’s current system requires that it does.

Money matters when it is used well

The research is strong that extra funding, used persistently and reliably for effective practices, improves student achievement. Bruce Baker and Drew Knight’s 2025 review for the Albert Shanker Institute, Does Money Matter in Education?, summarizes it. Funding increases improve outcomes and cuts reduce them. And money matters more, often several times more, for children in poverty and in communities where states have historically underinvested.

Linda Darling-Hammond reaches the same conclusion from the states that have actually improved. States that built lasting success did it through patient, systemic investment, she writes: funding schools based on student need, preparing and supporting teachers seriously, and building coherent instructional systems rather than chasing single reforms.

The words used well carry the weight. Money alone is not a lever. It pays for the levers.

The potential is there; the results are not

Minnesota’s low-income students have tremendous potential. Schools that serve them well prove it. But statewide, Minnesota districts are largely failing to realize that potential.

• Minnesota’s low-income 4th graders fell from 27th of 50 states in NAEP reading in 2013 to 46th in 2022 (Baker, 2026).
• Minnesota’s income-adjusted achievement gaps rank among the five widest in the nation (Baker, 2026).
• The Office of the Legislative Auditor found in 2022 that Minnesota’s achievement gaps are some of the largest in the nation.
• In 2025, only 32.8 percent of Minnesota students eligible for free or reduced-price meals met grade-level standards in reading on the MCA, and only 26.4 percent in math. Statewide, 49.5 percent of all students met the reading standard and 45.0 percent the math standard.

Minnesota’s long record of weak accountability

Minnesota has never had a serious system for ensuring that compensatory money is used effectively. The state’s own auditor has said so twice.

The 2020 compensatory revenue evaluation. The Office of the Legislative Auditor (OLA) found that schools use compensatory revenue for a broad range of programs, but its statewide impacts are unknown. For 80 percent of the revenue, no data showed how spending lined up with the uses the law allows. Forty-two percent of surveyed districts did not know how many students their compensatory programs served. Some superintendents told OLA that because compensatory revenue frees up general fund dollars to spend elsewhere, potentially all students benefit. That is a description of supplanting.

OLA also suggested -- without any foundation -- that requiring districts to prove compensatory revenue raised achievement was unrealistic. It recommended a substitute: districts should report whether their compensatory programs follow best practices. The Legislature adopted that idea in its weakest form. Districts now self-report best-practice consistency, but apparently no one is assigned to review the reports, and nothing happens to a district that reports poor practice. This issue applies to both traditional public schools and charters.

The 2022 achievement gap evaluation. OLA examined the Department of Education’s role under the World’s Best Workforce law, the state’s main accountability framework. It found that the department had not annually monitored district progress, as the statute required. It had not listed the districts that failed to meet their goals in its reports to the Legislature. The statute gave the department authority to direct up to 2 percent of a failing district’s general education revenue toward improvement strategies. At the time, the department had used it once, in 2018. Superintendents called the reporting a “checkbox activity.” I believe that the current leadership at the Department of Education favors increased accountability, but there is no support at the legislature, in the Governor’s office, or in the Attorney General’s office for real accountability, despite the constitutional requirement of a thorough and efficient system.

The 2026 Compensatory Revenue Task Force failed to recognize the need for supportive accountability. The Task Force—discussed in the first post in this series—had a chance to propose a fix and declined. Its main accountability recommendation is a short narrative in each district’s annual report explaining how compensatory money is spent, plus an MDE summary of “promising practices.” It incorrectly said measuring effectiveness was not feasible and not its role. It recommended no outcome measures, no targets, no state review, and no consequences. The result will be more funding without a corresponding increase in educational improvement.

Three local practices that blunt compensatory funding

1. Bargaining away the increase. Districts and unions typically treat all new revenue, compensatory increases included, as one pool from which settlements are negotiated. When compensatory funding grows at roughly the rate of the basic formula, that is ordinary cost growth. If used entirely to raise everyone’s salary, the district is then staffed exactly as before and delivers the same programs as before, at a higher price.

Adequate compensation is important to attract and reward quality teaching, but overwhelming evidence supports the conclusion that merely increasing compensation will not solve Minnesota’s dismal results for the students who generate compensatory and ELL funding. Delivering an adequate education requires fair compensation for staff but it also requires robust growth in the quantity of staff serving those students along with robust improvements in effective practices. If compensatory funding grows many times faster, as it will from FY2025 to FY2027, absorbing it into across-the-board compensation would pervert the purpose of compensatory funding.

If we want a payoff for the extra compensatory funding, the extra increases must then be allocated to the students who generate it and that funding must translate into major improvements in the delivery of education.

Massachusetts offers a warning. After its 2019 Student Opportunity Act, the ten districts with the largest aid increases raised teacher spending by $156 million over three years. Their teacher headcount rose only 7 percent, or 751 teachers. The Massachusetts Taxpayers Foundation asserted that most of the new money supported salary increases rather than new hiring and reforms implementing effective practices.

2. Supplanting. Supplanting means using targeted money to replace spending the district would otherwise make from its general fund, rather than adding to total spending for the target students. Federal Title I has long carried a “supplement, not supplant” rule, and a comparability test so that high-poverty schools get their fair share of base funding before Title I is added.

However, Minnesota has no comparable mechanism. Although its statute restricts what compensatory dollars may be coded to, it does not define a baseline, require maintenance of effort, or bar a district from cutting a building’s general fund allocation by the amount of its compensatory revenue. It appears that a district can comply fully and still let compensatory money carry costs that basic revenue used to carry.

When supplanting occurs, the result is that compensatory money does not improve programs for the target students. It merely reduces the basic funding that supports them. Administrators sometimes say compensatory money “buys” teachers because without it they would have laid people off. That claim concedes the point: the money is doing the work the basic formula was supposed to do.

3. Diversion. Minnesota law expressly allows districts to spread compensatory revenue away from the buildings that generate it. Ordinarily at least 80 percent must go to the generating buildings, and up to 20 percent may be reallocated under a school board plan. For fiscal years 2026, 2027, and 2028, the Legislature has raised the reallocation limit to 40 percent. Reallocated money may serve students in any grade, in any building.

Diversion dilutes the impact precisely where the formula concentrates money most heavily. The current formula sends the most money per pupil to the highest-poverty buildings. Allowing districts to move 40 percent of it elsewhere works against that design.

Abdication has a political cost and a constitutional one

If Minnesota refuses to take responsibility at the state level to assure that compensatory money is used, that will ultimately undermine support for the money itself. Legislators who vote for a large increase will be asked what it bought. If the honest answer is “we don’t know,” or continuation of the same programs at a higher cost, the next increase will be harder to win, and the current one easier to cut.

Abdicating state responsibility for delivery of an adequate education also violates the Constitution. Article XIII, section 1 makes it the Legislature’s duty to establish “a general and uniform system of public schools” and to “secure a thorough and efficient system of public schools throughout the state.” In Cruz-Guzman v. State (2018), the Minnesota Supreme Court held that the clause’s adequacy guarantee has a qualitative component, and that claims under it are for the courts to hear.

That duty belongs to the state. The Legislature may delegate the running of schools to local boards. It cannot delegate away its responsibility for the result. A system in which the state sends targeted money to districts, asks nothing about whether it reaches the targeted students, and does nothing when it does not, is neither uniform nor thorough and efficient.

There is one area of K-12 education that has robust accountability, and that is special education. When a school district fails to provide special education that meets all state standards, it may be subject to state audits, administrative intervention and administrative appeals by parents. The rationale is that special education students come to school with special needs, and they deserve an adequate education which otherwise would not be met.

But other students, disproportionately lower income students, English language learners and students of color, come to school with disadvantages as well. There is no principled reason that meeting their needs should be a local option. I don’t suggest that the solution is to create the elaborate enforcement system that exists for special education students. The state has an obligation to implement supportive accountability systems to assure that they receive the adequate education the constitution requires and it is time to address how the state is going to meet that responsibility.

What other states are trying

A number of states are now beginning to pair increased funding for high-need students with state planning, review, and support. It remains to be seen whether these states will implement these concepts effectively. Massachusetts requires district plans under its Student Opportunity Act and reviews them at the state level. Maryland created an independent review board. Tennessee reviews district progress each year. California assigns “differentiated assistance” to districts whose student groups are struggling. The national education nonprofit Bellwether has drawn these approaches together in a framework for state fiscal accountability, Beyond the Bottom Line (May 2025). Its premise is that money alone does not improve student achievement, but how it is used can. The framework has four parts: sound basic fiscal rules; district spending plans tied to academic goals; transparent spending and outcome data; and state capacity to support districts, with tiered help and intervention for those that struggle. Bellwether notes that most states have built academic accountability systems but not fiscal ones. It cites Minnesota’s compensatory revenue as an example of a “light-touch” approach: one that is extraordinarily lenient for districts that are failing to make adequate progress.

The movement to implement robust state accountability and support systems is a new trend, so no state can yet show proven results from pairing compensatory funding with accountability. The early evidence mostly shows how hard it is. Massachusetts could tie only 59 percent of its new reform-related aid to planned evidence-based programs, and only 25 percent of its total aid increase, because district plans did not match financial reports.

What Maryland is attempting. Compare Maryland’s Blueprint for Maryland’s Future. An independent Accountability and Implementation Board reviews and approves every district’s implementation plan, tracks spending to confirm required funding reaches the intended students, and can withhold funds. Its record is mixed: districts met only two of five FY2025 implementation goals, and the board recently paused its school-visit teams. An independent evaluation is due to the governor and General Assembly in January 2027. But Maryland has built the machinery to ask whether the money is working. Minnesota has not.

The strongest example comes from a different direction: a state that made systemic improvement in one subject a state responsibility with a focus on reading. That state is Mississippi.

In her March 2026 article Improving Student Achievement: What Red and Blue States Are Doing Right, Linda Darling-Hammond describes what Mississippi did. It is often summarized as a switch to phonics. She shows it was far more:

• A state-defined literacy approach. The state set out a research-based literacy block: explicit daily instruction in foundational skills, plus daily writing, reading and discussing books, vocabulary, and comprehension.
• Staffing to make it work. Kindergarten and first-grade classrooms of up to 24 students are expected to include trained teaching assistants, so teachers can spend most of their time with small groups.
• Assessment and intervention. Students are regularly assessed, and specific interventions are put in place for those who need them.
• State capacity. The department of education created a literacy division and sends trained literacy coaches to high-need schools.
• Sustained money. Per-pupil spending rose 73 percent from 2016-17 to 2025-26, with teacher raises in 2022 and again last year, and an 18 percent raise for teaching assistants.

The result: Mississippi ranked 46th in 4th-grade reading in 2006 and reached the national average by 2019. In 2024 it ranked first in the nation on demographically adjusted 4th- and 8th-grade reading and math scores. Both rankings are based on the National Assessment of Educational Progress (NAEP), the federal test given to samples of students in every state, which Darling-Hammond calls the nation’s most reliable long-term measure of achievement. The 2024 ranking uses an Urban Institute analysis that adjusts each state’s NAEP scores for student demographics, such as poverty, English learner status, and disability. That adjustment lets states serving very different populations be compared fairly. It does not change how students actually scored. On unadjusted 2024 scores, Mississippi still ranked 35th in 8th-grade math and 41st in 8th-grade reading. Mississippi is not yet a top performer. But its students outperform what their demographics would predict by more than any other state’s, and their results are improving significantly.

Mississippi is beginning to implement a system of both support and accountability. The state defined what effective practice looks like, paid for it, built its own capacity to support it, and watched whether it worked. While Minnesota has a poorly funded program for the very lowest performing schools, Minnesota lacks systemic, supportive accountability.

This is a critcal time form Minnesota to reconsider its abdication of state responsibility for support and accountability. If actually funded by the 2027 legislature, Minnesota is about to make perhaps the largest increase in compensatory funding in its history. If the Legislature does not pair it with that kind of state responsibility, the increase will be absorbed, and the students who generate it will keep waiting, and opponents will charge that Minnesota has shown that increasing funding does not make a difference.

Sources

• Bruce D. Baker, Minnesota’s Equal Educational Opportunity Problem, policy brief, and accompanying slide deck (Oct. 2026).
• Office of the Legislative Auditor, Compensatory Education Revenue (March 2020), summary and p. 23.
• Office of the Legislative Auditor, Minnesota Department of Education’s Role in Addressing the Achievement Gap (March 2022), pp. 28–30.
• Minn. Stat. § 126C.15; Laws 2026, ch. 117.
• Laws 2025, 1st Spec. Sess., ch. 10, art. 1, §§ 19, 27.
• Minnesota Department of Education, Inflation Adjusted Formula Allowance for Fiscal Year 2027 (Feb. 11, 2026).
• Massachusetts Taxpayers Foundation, SOA Implementation: A 3-Year Progress Report (Nov. 2025).
• Bellwether, Beyond the Bottom Line: A New Framework for K-12 Fiscal Accountability (May 2025) and Splitting the Bill #21: How Should States Implement K-12 Funding Changes? (Jan. 2026).
• Linda Darling-Hammond, Improving Student Achievement: What Red and Blue States Are Doing Right, Learning Policy Institute (Mar. 4, 2026).
• Maryland Department of Legislative Services, FY2027 budget analysis of the Accountability and Implementation Board.
• Bemidji Pioneer, “Bemidji Area Schools outperforms state in math MCA, underperforms in reading” (Sept. 2025), for 2025 statewide free/reduced-price MCA figures.
• Opportunity for All Kids, “Majority of Minnesota Students Still Below Grade-Level in Reading and Math” (Sept. 23, 2025), for 2025 statewide MCA figures.

The New K-12 Compensatory Revenue Task Force's final report--Part 1

Part 1 of a series on the K-12 Compensatory Revenue Task Force's final report

In October 2026, the Compensatory Revenue Task Force sent its final report to the Legislature. Compensatory revenue is the state's principal funding stream for students who arrive at school underprepared to learn, so how it works matters a great deal. This first post explains what compensatory revenue is, how it works, and what the task force recommended. Later posts will take up the policy questions the report raises, and in some cases leaves open.

What is compensatory revenue?

Compensatory revenue is a component of Minnesota's general education revenue. Its statutory purpose is to meet the educational needs of students who enroll underprepared to learn and whose progress toward state or local standards is below the level appropriate for their age. The theory is simple. Some students need more instructional time, more individual attention, and more support than the basic per-pupil allowance can buy, so the state provides additional dollars where those students are enrolled.

Minnesota has never tried to measure "underpreparedness" directly. It uses poverty as a proxy. For decades, the proxy was eligibility for free or reduced-price school meals.

How the money is generated

Compensatory revenue is calculated school building by school building, not district-wide. Each site's revenue depends on two things: how many of its students qualify, and what share of its total enrollment those students represent.

The second factor is the concentration feature, and it is central to the formula's design. A school where 80 percent of the students are in poverty generates more per qualifying student than a school where 20 percent are. The premise, well supported in the research, is that concentrated poverty compounds educational need. A low-income child surrounded by classmates facing the same disadvantages needs more support than a low-income child in a more advantaged school.

Through fiscal year 2026, the formula limited that concentration effect in two ways. A building's weighting stopped rising once 80 percent of its students qualified. The result was then multiplied by 0.60. Even at the highest-poverty schools, a qualifying student generated only about half of the basic per-pupil formula allowance in additional funding.

Beginning in fiscal year 2027, a formula enacted in 2023 took effect, and it works very differently (Minn. Stat. § 126C.10, subd. 3). It has three pieces:

• A building's "compensatory pupils" equal its free-meal students plus one-half of its reduced-price students.
• Its "concentration factor" is simply the ratio of compensatory pupils to total enrollment.
• Its revenue equals compensatory pupils times the concentration factor times a statewide compensatory allowance of $6,936 for FY2027.

There is no longer an 80 percent ceiling or a 0.60 multiplier. Per-pupil funding rises in a straight line all the way from 0 to 100 percent concentration.

Researchers commonly express the additional funding for a disadvantaged student as a "weight" relative to the basic per-pupil allowance. A weight of 1.0 means the student generates an extra amount equal to the basic allowance, so twice the base in total. Under the current formula, each building's weight depends entirely on its concentration. Measured against the FY2027 basic formula allowance of $7,683, the results look like this:

Building concentration	Additional revenue per compensatory pupil	As a weight of the basic formula
100%	$6,936	about 0.90
88%	$6,104	about 0.79
60%	$4,162	about 0.54
40%	$2,774	about 0.36
20%	$1,387	about 0.18

Sources: Minn. Stat. § 126C.10, subds. 3, 3a, 3c; Minnesota Department of Education, FY2027 formula allowance memo (Feb. 11, 2026).

These figures are before any adjustment under the statewide funding floor. State law requires that compensatory revenue total at least $857.2 million statewide. If the formula adds up to less than that, the remaining money is distributed to every building in proportion to its formula amount. In that case, each building receives somewhat more than the figures shown in the table, and the formula determines only how the $857.2 million is divided.

The formula pays the most to schools with the highest concentrations of poverty, and it pays them considerably more than the old formula did. A low-income student in a school where few classmates are poor generates only a small fraction of the basic allowance. Because a building's total revenue grows with the square of its concentration, the money is heavily concentrated in a relatively small number of buildings.

How students are counted

The method of counting students has been unstable, and that instability is part of what led to the task force.

Originally, students were counted through paper applications for educational benefits, the familiar free and reduced-price lunch forms. Starting in 2008–09, students were also identified automatically through "direct certification," a match against enrollment in SNAP, MFIP, and foster care. Medicaid was added in 2022–23.

When Minnesota adopted universal free school meals in 2023, families had little reason to fill out the paper forms. The Legislature removed the forms from the compensatory count and moved to direct certification only. Student counts, and district revenue projections, became volatile. The Legislature responded with a series of temporary fixes:

• hold-harmless provisions for fiscal years 2025 and 2026;
• a statewide funding floor;
• a one-time FY2027 cushion for buildings that would lose revenue under the new formula.

How the money must be spent

Compensatory revenue is restricted to specified uses, including:

• remedial instruction;
• additional teachers and aides;
• extended day and summer programs;
• counseling and social work;
• programs for English learners;
• early childhood programs;
• certain professional development.

Because the money is generated by particular schools, the law has historically required districts to send at least 80 percent of each building's compensatory revenue back to that building. The school board could reallocate the other 20 percent. For fiscal years 2026 through 2028, the Legislature temporarily loosened that rule, allowing districts to reallocate up to 40 percent. At present, then, only 60 percent of the money generated by a high-poverty school is guaranteed to be spent there.

What the task force recommended

The 2025 Legislature created the 14-member task force and charged it with examining the formula's purpose, revenue levels, distribution, uses, and evaluation. It met 13 times between September 2025 and October 2026. Its principal recommendations are these.

Target and proxy. Students underprepared to learn should remain the intended beneficiaries, and poverty should remain the proxy for identifying them. The task force acknowledged that the proxy is imperfect but found a strong correlation between poverty and learning readiness.

Counting students. Count as many eligible students as possible. That means combining direct certification (now including FDPIR, migrant, homeless and runaway youth, and Medicaid), restoring the educational benefits forms, and adding SUN Bucks applications. Over the longer term, the state should add income tax data, as New Mexico has done, to reduce dependence on federal program enrollment.

Equal weighting. Count free-meal and reduced-price students equally. The task force concluded that both income levels reflect substantial hardship and that the current half-weight for reduced-price students reflects budget considerations rather than real differences in need. This is among the largest, and most expensive, of the task force's recommendations.

Stability. Beginning in fiscal year 2028, use a four-year rolling average of student counts to reduce volatility.

Concentration. Keep the concentration formula, with per-pupil funding increasing continuously from 0 to 100 percent concentration. This retains the structure of current law. The task force first proposed reinstating a cap at 80 percent, then reversed itself after reviewing fiscal modeling.

Site allocation. Require at least 70 percent of a building's compensatory revenue to stay at that building. Over the longer term, give districts below median enrollment more flexibility, with documentation and public reporting.

Extended time and uses. Make no changes.

Effectiveness. Do not attempt to measure outcomes directly. Instead, require districts to describe their compensatory spending in their Comprehensive Achievement and Civic Readiness (CACR) reports, and have MDE compile an annual statewide report identifying promising practices.

Finally, the task force urged the Legislature to fund its recommendations fully. It warned against across-the-board proration, which it found would shortchange the highest-need schools. If full funding is not possible, it proposed an order for scaling back:

1. Phase in the equal weighting for reduced-price students.
2. Adjust the averaging period.
3. Adjust concentration floors or caps.
4. Only as a last resort, prorate the formula along a non-linear curve that protects the highest-need schools.

What would it cost?

The report does not say. That is a striking omission in a document that asks the Legislature to fully fund its recommendations. The report acknowledges that MDE's modeling showed the recommendations increase spending, both by identifying more students and by raising concentration percentages. It never puts a number on the increase.

According to one task force member, the full package would add nearly $500 million a year. Measured against the current statewide floor of about $857 million, that is an increase of more than 50 percent. Whatever one thinks of the merits, that figure belongs in front of legislators and the public. It is also the reason the task force spent so much effort on what should happen if the Legislature does not provide it.

The same task force member acknowledges that leaving the full price out of the report is a fair criticism, and offers an explanation. MDE plans to produce official cost estimates after the November forecast, when it will have a clearer picture of enrollment and of the number of students who qualify. The recommendations themselves make forecasting harder at first: averaging student counts, which the task force recommends for the first time, complicates long-range projections. The task force is expected to present its work to the House and Senate education finance committees this spring, where the cost question will have to be answered with better data than exists today. I will report MDE's figures when they are released.

The policy issues ahead

The report is a serious effort to repair a formula destabilized by the shift to universal meals and direct certification. It also leaves several important questions unresolved.

1. How much is enough? The report never asks whether the amount of compensatory funding is adequate to meet the needs of low-income students. The research literature has addressed that question directly. Under the current formula, only students in the very highest-poverty buildings approach a weight of 1.0. A low-income student in a building at 40 percent concentration generates a weight of about 0.36, and at 20 percent concentration, under 0.2. Whether those amounts are adequate is a question the task force did not take up.
2. Who pays if the Legislature doesn't? With a price tag that may approach half a billion dollars, and no official estimate until after the November forecast, partial funding is a real possibility. The task force's own analysis shows that partial implementation can harm the highest-need schools.
3. Redistribution. Several recommendations, especially restoring the forms and equalizing reduced-price weighting, add students mainly in low- and moderate-poverty schools. The report itself notes that high-concentration schools gain less from these changes. If the total does not grow enough, money shifts away from the schools with the greatest need.
4. English learners. The report treats English learners only as background. It does not examine whether direct certification and tax data undercount immigrant and EL families, or how compensatory revenue interacts with the state's separate EL funding.
5. Does the money reach the students who generate it? The current formula concentrates revenue heavily in the highest-poverty buildings, so the rules on where the money is actually spent matter more than ever. Under current law, districts may move up to 40 percent of it elsewhere. Even the 80, 70, or 60 percent site rule may matter less than it appears. As one task force member candidly put it, districts can offset compensatory dollars by reducing a building's general-fund allocation. The report does not consider a comparability or supplement-not-supplant requirement.
6. Accountability. The task force's effectiveness recommendation is a narrative disclosure. It largely duplicates best-practice reporting duties already in statute, and it attaches no consequences to spending that shows no results.

In the next post, I will take up several of these issues, beginning with the question the task force set aside: how much additional funding Minnesota's low-income students actually need, and how close the compensatory formula comes to providing it.

Minnesota's Special Education Cuts: What the Blue Ribbon Commission Was Asked to Do, and What the Default Cut Means

What the Legislature required the Commission to do

In the 2025 special session, the Legislature directed the Commissioner of Education to convene a Blue Ribbon Commission on Special Education. The Commission was to produce an action plan that would cut state special education aid by $250 million per biennium, beginning July 1, 2027, while still maintaining a free appropriate public education (FAPE) for students with disabilities. Laws of Minnesota 2025, 1st Spec. Sess. ch. 10, art. 7.

The charge was dressed in the language of reform. The statute listed five goals: administrative efficiencies and shared services, reducing cost drivers such as transportation and tuition billing, reducing paperwork, reforming the funding formula, and slowing cost growth. But the operative requirement was the dollar target.

The Legislature also built in a penalty. Section 8 of the same article directs Minnesota Management and Budget to assume a $250 million reduction in special education aid in its forecasts. If the 2027 Legislature does not enact savings of that size based on the Commission's recommendations, the Commissioner of Education must cut the special education cross subsidy aid factor under Minn. Stat. § 125A.76, subd. 2e, by whatever amount is needed to make up the difference. In other words, the cut happens automatically unless the Legislature either finds the savings elsewhere or repeals the provision.

What the Commission did

The Commission's first and unanimous recommendation was that the Legislature not make the cuts at all. It urged repeal of the contingent reduction in section 8, concluding that it could find no way to cut at this level while upholding FAPE for every student. Its September 2026 report, prepared with Wilder Research, says plainly that the cuts will harm students, families, and schools whether they come through its own menu or the default.

The Commission had 18 members: an MDE designee, four legislative appointees, and thirteen gubernatorial appointees drawn from districts, intermediate districts, cooperatives, Education Minnesota, PACER, disability advocates, and EdFinMN. It met from October 2025 through September 2026 and worked through subcommittees, ratings, and elimination votes.

Having recommended repeal, the Commission complied with its charge and offered four cuts that together reach the target:

Recommendation	Savings per biennium
Move ADSIS out of the special education formula into a capped per-student allocation	$130,526,396
Move non-IEP transportation (FIN 728) to a separate stream at 60% reimbursement, capped at $60 million	$99,438,083
Eliminate Special Education Charter Tuition Aid	$15,061,025
Eliminate the remaining Hold Harmless provision	$10,256,278
Total	$255,281,782

The Commission was openly uneasy with its own menu. The FIN 728 item pays for transporting students experiencing homelessness, students in care and treatment programs, and students with Section 504 transportation plans. One member called it a forced choice between students with disabilities and students experiencing homelessness, and the report urges legislators not to adopt it unless absolutely necessary. Saint Paul's superintendent estimated that the FIN 728 and ADSIS changes alone would cost her district more than $9 million a year.

The Commission also recommended measures that save no money in the biennium but might slow growth over time: adopting PELSB's licensure recommendations, acting on existing paperwork-reduction proposals, expanding early identification and Full-Service Community Schools, and reducing barriers to Medicaid billing. Commission member Ramona Springis-Doss added a pointed observation in her letter. The real cost drivers, she wrote, include chronic federal underfunding and Minnesota requirements that exceed federal law, and only the Legislature can address them.

Enrollment and costs keep rising

More Minnesota students receive special education every year, and the share of all students receiving it is at a historic high. According to MDE data in the Commission's report, enrollment from birth through age 22 rose from 140,748 in 2017-18 to 173,188 in 2025-26, an increase of 23 percent. Nearly all of the growth was among school-age students.

The growth is not a product of rising overall enrollment, which has been roughly flat. The share has climbed for decades. The Office of the Legislative Auditor reported 7.4 percent in 1977, 10.9 percent in 1996, 11.9 percent in 1999-2000, and 13.6 percent in 2010-11. MDE's statistics summaries show 166,982 students receiving special education in 2024-25 against roughly 905,800 PreK-12 public school students, or about 18.4 percent. Autism is the fastest-growing category: OLA reports that students with autism as their primary disability now number nearly 30,000, up 71 percent.

Costs have grown faster than revenue. Special education expenditures were $2.745 billion in FY 2021 and are projected at $4.498 billion by FY 2029. Dedicated state and federal special education revenue is projected at $3.981 billion that year. The difference, the cross subsidy, must be covered from districts' general education revenue.

The 2023 Legislature cut that gap substantially by raising the cross subsidy aid factor from 6.43 percent to 44 percent for FY 2024 through 2026 and 50 percent for FY 2027 and later. Even so, the Commission's figures project a remaining cross subsidy of about $517 million in FY 2029, before any default cut.

What the default cut would do to districts

The Commission's report does not tell the Legislature how the default cut would fall on districts. It treats the default only as something to avoid. The statute answers the question anyway.

A district's cross subsidy reduction aid equals its prior-year initial special education cross subsidy times a single statewide aid factor. The initial cross subsidy is the district's special education spending, including transportation, minus its special education aid and the general education revenue attributable to students served outside the regular classroom more than 60 percent of the day. The default cut works by lowering that one factor. Every district therefore loses the same percentage of its own unreimbursed special education costs, and the dollars lost track the size of each district's deficit, not its enrollment.

The statewide magnitude is $125 million a year. MDE has projected the annual initial cross subsidy at roughly $1 billion, so the 50 percent factor implies about $500 million a year in cross subsidy aid. The default cut would take back about a quarter of it. The factor would fall from 50 percent to somewhere in the high 30s, and each district would absorb roughly another tenth of its unreimbursed special education costs from its general fund. Spread across all PreK-12 students, the average is about $135 to $140 per pupil per year. These figures are estimates derived from MDE's projections; actual district amounts will depend on MDE's final calculations.

Averages conceal the pattern. Districts with the largest deficits per pupil take the largest cuts per pupil. MDE's estimates for 2022-23 show how widely the deficits vary:

District group	Adjusted net cross subsidy per pupil, FY 2023 (est.)
Minneapolis and St. Paul	$1,411
Other metro, inner ring	$1,241
Other metro, outer ring	$1,074
Non-metro, 2,000+ students	$1,042
Non-metro, 1,000–2,000 students	$919
Statewide	$953

St. Cloud has long sat near the top. In 2017 its per-pupil cross subsidy was $1,282, the third largest in the state, against a statewide average of $820.

The districts that will lose the most share several characteristics. They identify more students and serve more students with intensive needs. They place more students in separate settings or intermediate districts. They pay heavy contracted transportation costs. And they bear tuition-billing costs for resident students who attend charter schools or other districts. Minneapolis officials have said that tuition billing accounts for more than $600 per pupil of their cross subsidy.

The largest per-pupil cuts will land on the core cities and on regional centers such as St. Cloud. These are the districts that enroll the highest concentrations of low-income students, students of color, and English learners. The relationship is not uniform statewide; affluent inner-ring suburbs also carry large deficits, and small rural districts carry the smallest. But at the top of the distribution, the default cut falls hardest where student need is greatest.

Another failure to honor the Skeen mandate

The default cut is one more example of the Legislature's failure to honor the constitutional mandate recognized in Skeen v. State, 505 N.W.2d 299 (Minn. 1993): to provide every district with enough funding to give each student an adequate education that meets all state standards. Article XIII, section 1 of the Minnesota Constitution assigns that duty to the Legislature. In Cruz-Guzman v. State, 916 N.W.2d 1 (Minn. 2018), the Supreme Court confirmed that the courts can enforce it.

The special education cross subsidy patently violates that mandate. The Legislature requires districts to provide special education, then funds only part of the cost and forces districts to make up the rest from general education revenue. That revenue is the money the Legislature itself provides to educate every other student. In 2022-23, MDE estimated the adjusted net cross subsidy at $826 million statewide, 10.9 percent of general education revenue before referendum levies, and 14.1 percent in Minneapolis and St. Paul.

It is a mistake to think the cross subsidy chiefly harms students with disabilities. Their services are written into IEPs and enforceable under federal law; districts must provide them whatever the budget. The students who absorb the shortfall are the non-special education students with higher educational needs, whose interventions, class sizes, reading support, and language services are funded from the general fund that the cross subsidy drains. Those students are disproportionately students of color, low-income students, and English learners. They are also concentrated in exactly the districts, the core cities and regional centers like St. Cloud, that carry the largest deficits and would take the largest default cuts.

The Legislature's own Commission unanimously told it not to do this. Repealing section 8 is the minimum the 2027 Legislature owes Minnesota's students. Meeting the Skeen mandate requires more: a funding system built on what an adequate education actually costs, rather than one that balances the state's budget by shifting unfunded mandates onto the students least able to bear them.

Sources

• Blue Ribbon Commission on Special Education, Recommendations to the Minnesota Legislature (Sept. 2026), prepared by Wilder Research for MDE.
• Laws 2025, 1st Spec. Sess. ch. 10, art. 7, § 8, as reproduced in S.F. 3909 (2026); see also House Research summary of H.F. 4114.
• 2023 conference committee amendment to Minn. Stat. § 125A.76, subd. 2e (44 and 50 percent aid factors).
• MDE, Fiscal Note, H.F. 18 (Jan. 18, 2023) (projected initial cross subsidy and aid at 6.43 percent).
• MDE, Special Education Funding and Data Reference Guide, Section 2.
• MDE, Estimated 2022-23 Special Education Cross Subsidy, General Education and Referendum Revenue.
• MDE, Special Education Cross-Subsidies FY 2017.
• MinnPost, What does Minnesota's new special-ed aid mean for districts with the largest shortfalls? (June 2019).
• Office of the Legislative Auditor, Special Education (1997) and Special Education (2013); ASD Services in Public Schools topic background (Nov. 2025).
• Legislative Reference Library, Minnesota Education Statistics Summary, 2024-25 data.

Minnesota's Intentional Failure to Determine the Cost of an Adequate Education Part I

Twenty Years of Not Asking: Minnesota Has Never Determined What an Adequate Education Costs

Costing an Adequate Education for Minnesota Students — Part 1

Under Skeen v. State, Minnesota children have a fundamental right to an education funded sufficiently to meet the standards the State itself imposes. That raises an obvious question, and it is a question with a number for an answer: how much does it cost to deliver that education to every Minnesota student, including the student who arrives at kindergarten without school readiness skills, the student in poverty, the student with a disability, and the student still learning English?

Minnesota does not know. Not because the question is unanswerable — other states have answered it, by several well-established methods — but because Minnesota has never finished asking. For more than two decades the State has convened task forces, commissioned studies, and passed legislation aimed at determining the cost of an education that meets state standards. Every one of those efforts ended before it produced a full-dollar figure. A Governor ended one and vetoed the funding for another. The later efforts were limited in charge, in time, or in resources.

This series is about what it would take to finally answer the question: what "costing out" an adequate education means, how the major methods work, what other states have found, what the evidence suggests about the added cost of educating Minnesota's highest-need students, and what a court or the Legislature should require. But it begins with the history, because the history is itself the most important fact. Much of it is drawn from the research summary I prepared for the 2025 MDE Task Force, which appears as Appendix D to the Task Force's final report, and from the legislative record.

2004: The task force that was not allowed to finish

In his 2003 State of the State address, Governor Pawlenty warned that Minnesota was leaving too many children behind, and that those children tended to be poor, disabled, or children of color. In June 2003 he appointed a 19-member Education Finance Reform Task Force, chaired by then-Superintendent Ric Dressen.

The Task Force's July 2004 report, Investing in Our Future, acknowledged that Minnesota had one of the largest achievement gaps in the nation. It recommended a funding system that is cost-based, learning-linked, and sufficient to cover the "full dollar costs" of giving students an opportunity to achieve state academic standards. Its recommendations rested on four principles:

• funding the full dollar cost;
• tailoring funding to student characteristics such as disability, poverty, school readiness, and English learner status;
• using research-based weights for those characteristics; and
• holding local officials accountable once costs are determined and funded.

The Task Force also made a finding that Minnesota has spent the last twenty years ignoring: simply raising the basic formula across the board cannot remedy the deficits affecting special education, lower-income students, and English learners.

By its own account, the Task Force was charged with recommending a framework, not with setting the final funding level. The number was to come from a costing-out study, and the Task Force was authorized to retain a nationally recognized consultant to conduct it. It retained Management Analysis & Planning, Inc. (MAP), which used the professional-judgment approach.

MAP's preliminary results were not a single figure. Its three study teams produced results implying statewide expenditure changes of 1.42%, 2.82%, and 14.75%, and the Task Force was shown two further scenarios (6.85% and 6.89%) produced by modifying the highest team's results. MAP did not recommend an adequacy level. A contemporaneous review commissioned by Schools for Equity in Education (SEE) criticized that outcome, observing that MAP should have provided a base student cost and special-needs adjustments that would have given the Task Force "a single bottom line."

Then, as the adequacy study neared completion, Governor Pawlenty ended the Task Force's work. The study was left unfinished. The Task Force never received a determination of the full-dollar cost. Minnesota is perhaps the only state that terminated its funding study before it was concluded.

2005–2006: The districts tried to finish the job

The school districts did not let the matter drop. Three organizations representing about 80% of Minnesota's public school students — the Association of Metropolitan School Districts (AMSD), the Minnesota Rural Education Association (MREA), and SEE — decided to act on the Task Force's recommendations. In September 2005 they contracted with national school finance expert John Myers of Augenblick, Palaich and Associates (APA) to examine the Task Force results and, using APA's costing methodologies, to determine what it would cost to educate each Minnesota student to state academic standards. The effort is also associated with the citizen group P.S. Minnesota, which, as Pat Welter explained in her SCERAC affidavit, commissioned a finance consulting firm to estimate the cost of an adequate education.

Myers presented the first phase, Determining the Cost of Education in Minnesota, to the Senate K-12 Education Budget Division on April 4, 2006. That phase concluded that an adequacy study still remained to be done, and it described a second phase intended to fill the void. But this was a privately financed effort, and the State never adopted or acted on a cost figure from it.

2007: The Legislature tried. The Governor vetoed the money.

In 2007 the Legislature passed the omnibus E-12 education finance act (Laws 2007, chapter 146). Article 1, section 23 established a school finance reform task force of four House and four Senate members, charged with creating an "adequacy index," simplifying the formulas, examining categorical funding programs, and examining the role of the regional delivery system. It was to report by January 15, 2008.

Governor Pawlenty vetoed the appropriation for the study. An adequacy index is not itself a full-dollar cost estimate. But it was a step toward the determination the 2004 Task Force had never been allowed to complete, and the veto took away the money to do it.

2011–2012: Told not to ask for more

During the Dayton administration a task force again examined the funding system, producing Funding Education for the Future (MDE, May 2011) and the Education Finance Working Group's recommendations and report (November 2012). It repeated the warnings of the earlier reports: wide gaps in reading and math proficiency by race and economic status, and little progress in closing them between 2006 and 2010. Its recommendations included funding all-day kindergarten, reforming the compensatory revenue calculation to target funding more directly on need, rolling integration funding into the general fund, and rewarding districts that achieve high growth.

But the State was facing significant structural financial challenges, and the Task Force was specifically warned that it should not recommend significant additional funding. Its report largely addressed how to allocate existing resources. It did not attempt to determine the full-dollar cost of an adequate education.

2020: The money went to the base

In September 2019 the Commissioner of Education convened a 24-member School Finance Working Group. After twenty meetings it issued 80-20-10: Bringing Equity to Minnesota's School Finance System on November 5, 2020, with 46 recommendations estimated to require between $2.533 billion and $2.755 billion in new revenue. The report documents that the basic formula had lost 10% ($658 per student) of its buying power since 2003 (p. 12). It acknowledges the State's constitutional responsibility under Skeen (p. 7). And it states as a principle that basic funding "should be supplemented by categorical revenue sufficient to cover added costs related to unique student and district characteristics" (p. 10).

Yet the report's central recommendation was aimed at the basic formula, which pays the same amount for every student regardless of need:

The fundamental and largest single recommendation is to improve the adequacy and stability of pre-K through grade 12 education funding by restoring the equal basic revenue per pupil regardless of zip-code to 60%. (p. 12)

The report does caution that "[a]ll 10 topical areas need to be addressed, not topic A before B before C" (p. 59). But the dollars follow the emphasis. The report estimates $550.1 million in new basic revenue for FY 2023 (p. 13), compared with $38.3 million for English learners (p. 19) and $121.4 million for special education (p. 21). For English learners, its stated goal is only to reduce the cross-subsidy "to approximately 50%" (p. 19). And for compensatory revenue — the State's largest categorical program for low-income students — the report says: "No costing has been done for these recommendations above." (p. 29)

That choice matters, because the 2004 Task Force had already found that across-the-board increases to the basic formula cannot remedy the deficits facing special education, lower-income students, and English learners. A uniform allotment is blind to need. New money placed in the basic formula goes in equal amounts to the student who is on grade level and the student who is two years behind. It does nothing to supply the extra funding high-need students require — which research reviewed by the 2025 Task Force suggests is roughly equal to the base itself. Worse, the report's own Appendix C recognizes that unfunded English learner and special education costs put "added pressure on unrestricted general revenues (basic formula, referendum, LOR)" (p. 63). Part of any increase in the base is consumed backfilling those costs rather than expanding services. By making the need-blind basic formula its largest single recommendation, while leaving need-based programs partly funded or uncosted, the report perpetuated, and compounded, Minnesota's failure to provide the additional funding that students with greater needs require.

The pattern

Effort	Period	Outcome
Governor's Education Finance Reform Task Force	2003–2004	Recommended full-dollar-cost, learning-linked funding; set no funding level; ended by the Governor
MAP professional-judgment costing study	2003–2004	Five scenarios ranging from 1.42% to 14.75%; no adequacy level recommended; study left incomplete
AMSD/MREA/SEE study by APA (John Myers)	2005–2006	Phase I presented to the Senate; adequacy determination still outstanding; no State action
2007 school finance reform task force (adequacy index)	2007	Passed by the Legislature; appropriation vetoed
Dayton-era task force	2011–2012	Warned against recommending significant new funding; focused on allocating existing resources; no cost determination
School Finance Working Group (80-20-10)	2019–2020	Largest recommendation directed to the need-blind basic formula; compensatory recommendations not costed

Across three governors and more than twenty years, no official body has produced a determination of the full-dollar cost of an education that meets state standards. The reasons change; the result does not. A Governor ended the first effort and vetoed the funding for a later one. The budget conditions of the Dayton years redirected attention to existing resources. The 2020 working group put its largest recommendation into the one formula that ignores need.

The consequence is simple to state. The amount Minnesota appropriates for general education has never been tested against the cost of meeting the standards Minnesota imposes. Every funding debate at the Capitol is a debate about how much more, or how much less, than last year — never a debate about how much is enough.

Why it matters

Skeen establishes a fundamental right to funding sufficient to meet all state standards. The State cannot demonstrate that it is meeting that obligation if it has repeatedly declined to determine what meeting it costs. You cannot know whether you have paid a bill you have refused to read.

That is why the cost question belongs in the courtroom as well as at the Capitol, including in Cruz-Guzman. A court asked to enforce the Education Clause can order the State to do what the 2004 Task Force began and was never allowed to finish: determine the full-dollar cost of an adequate education, with the added costs of serving students in poverty, students with disabilities, and English learners identified rather than assumed away. The record above shows that, absent such an order, the ordinary political process is not likely to complete the work. It has had twenty years.

Next in this seriesThe 2023 St. Cloud District Report on Adequate Funding is Torpedoed and Denied a Legislative Hearing

Performance Pay For K-12 Teachers is Ineffective and Inefficient--Allocate More Money to Things that Really Work

 

Performance Pay for Teachers: What the Research Actually Shows

The Republican candidate for Governor has championed performance pay as a key K-12 education reform. This approach is appealing to people who see teachers as individual independent actors rather than part of an interdependent coherent system.

Success of students in K-12 depends upon the effectiveness of curriculum, professional development, administrative leadership, effective system wide discipline and inspiration. The best schools work together in teams. Their accountability systems are based on deploying supportive accountability. Teachers mentor each other; they meet in teams to assess what is not working; they conduct observations and receive regular supportive reviews.

Paying teachers bonuses doesn't generally make them work harder or work smarter. Improving curriculum, providing better professional development, a better disciplinary and counseling support, mentoring and better leadership, and interventions for students who need extra support — these are all things that improve teaching results; diverting that money to a bonus system detracts from the things that work.

That's why much of the research fails to identify significant benefits from pay for performance systems.

Minnesota Has Already Run This Experiment — For Twenty Years

Since 2005, the state's Q Comp program has offered districts extra funding in exchange for adopting pay-for-performance plans, making it one of the largest and longest-running experiments of its kind in the country. The first rigorous study of Q Comp, by University of Minnesota economists Aaron Sojourner, Elton Mykerezi, and Kristine West, found a consistent zero average effect of Q Comp participation on both reading and math achievement. A later, peer-reviewed version of their work refined that finding: districts that paired the pay component with real professional development, career ladders, and evaluation systems saw a modest gain — about 0.03 standard deviations — and even that gain was concentrated among the least experienced teachers, not the veterans a bonus is supposedly meant to motivate. In other words, where Q Comp helped at all, it wasn't the bonus check doing the work. It was the professional development and structure wrapped around it.

The Best-Designed National Experiments Found Nothing

Nashville's POINT study put nearly 300 middle-school math teachers into a genuine randomized trial, offering bonuses of up to $15,000 for value-added test-score gains. The researchers who designed it wanted to answer the most basic version of the question — does bonus pay alone improve student outcomes — and their answer was no. New York City ran an even larger version: a $75 million schoolwide bonus program across more than 200 schools, evaluated independently by both RAND and Harvard economist Roland Fryer. Neither found any improvement in student achievement at any grade level. Fryer's analysis turned up something worth pausing on: more than 80 percent of the schools that won bonus money simply split it evenly among the staff, rather than rewarding the "best" teachers individually. Given the choice, teachers themselves treated the money as a shared resource for a shared enterprise — not as an individual prize.

Where Real Gains Show Up: Selection, Not Bonuses

Washington DC's IMPACT system is the strongest positive result in this literature, and it's instructive precisely because of how it worked. Researchers Thomas Dee and James Wyckoff found that the dismissal threat facing low-rated teachers increased their voluntary departure by 11 percentage points and improved the performance of those who chose to stay by more than a quarter of a standard deviation. The districtwide achievement gains that followed were attributed mainly to that turnover — weak teachers leaving high-poverty schools — not to cash incentives changing how existing teachers taught. IMPACT is a story about a rigorous evaluation system with real consequences, layered on top of intensive observation and support. It is not a story about handing "good teachers" a check.

The pattern across all of it is the same one Minnesota's own data shows: pay-for-performance bonuses, standing alone, don't move outcomes. What moves outcomes is the system around the teacher — curriculum, coaching, evaluation with teeth, and the structures that let struggling teachers get better or move on. A bonus for the winners is a poor substitute for building that system.

Where the Money Should Go

We need more money in education, but that additional money needs to be allocated to strategies with proven results: adoption of system wide effective practices; authentic professional development that actually improves teaching, systemic improvement in school wide teaching systems, effective counseling support for students with emotional challenges, high quality tutoring interventions, and disciplinary supports that maintain the learning atmosphere but keeps kids in school.

A Series: How Can Cruz-Guzman Activate the Full Force of the Constitutional Right to an Adequate Education

Cruz-Guzman Series · How Can Cruz-Guzman Activate the Full Force of the Constitutional Right to an Adequate Education

This is a linked table of contents to a series advocating that the Cruz-Guzman class action must activate the full force of the constitution by articulating a broad comprehensive vision calling for educational reform. Each post in the series is linked and summarized. Minnesota's courts are deciding whether the State is meeting its constitutional obligation to give every child an adequate education — one that, under Skeen v. State, meets “all state standards.” Over the past several months, this blog has worked through that question from a number of angles: the history of the litigation, the Malatinszky and Higher Ground expert reports, the research on what actually works for high-need students, and the missing voices in the courtroom. Below is a short guide to that series, in order, for anyone who wants to catch up or dig into a particular piece.

1. Setting Up the Constitutional Question

Integrated Schools Must be Properly Funded to Deliver an Adequate Education (Part I)
Cruz-Guzman is often read as Minnesota's version of Brown v. Board, but the two cases rest on very different constitutional theories. Brown's litigation team deliberately set aside a claim for equal resources in favor of the argument that segregation itself is inherently unequal — a strategic choice with real costs to Black educational infrastructure that the post traces in some detail. Minnesota's Education Clause, by contrast, requires the Legislature to deliver an adequate education meeting all state standards, which means the Cruz-Guzman plaintiffs need more than an integration order — they need a plan for the funding, accountability, and effective practices that will actually get students to proficiency.

2. Funding and Integration Are Not a Choice

Baker and DiCarlo's New Book Calls for a Unified Strategy to Combine Funding Reform and School Integration
Introduces Bruce Baker and Matthew Di Carlo's Segregation and School Funding, which argues that Minnesota's failure to educate its highest-need students traces to three interlocking causes — inadequate funding, racial and poverty concentration, and a lack of accountability for using effective practices — rather than to any single lever like integration or spending alone.

Lessons from Baker and DiCarlo: Combine Adequate Funding with Integration
Draws six lessons from the book: equity is not the same as equal funding; adequate funding must be defined by the actual cost of meeting standards; segregation concentrates educational need; integration by itself is not enough; money matters; and funding reform and integration must be pursued together. The post ties several of these directly back to the Minnesota Supreme Court's reasoning in Skeen.

3. What the Evidence Already Shows

Expert Report in Cruz Guzman Case Documents MSP and St. Paul's Unconstitutional Failure to Provide an Adequate Education
Higher Ground Academy's expert report, filed to rebut a causal link between racial composition and outcomes, ends up documenting something else entirely: majorities of students in Minneapolis and St. Paul failing to meet state standards, dozens of schools identified as low-performing under Minnesota's North Star system, and that failure falling disproportionately on students of color and low-income students. The post argues this is independent evidence of a Skeen violation, regardless of what the report concludes about integration.

Twenty Years of Unheeded Warnings: Leaving Children Behind
A survey of two decades of task forces, studies, and audits — from Governor Pawlenty's 2004 Blue-Ribbon Task Force through the 2025 MDE Task Force — all reaching the same diagnosis: Minnesota's school finance system is structurally inadequate for its highest-need students. Part of an eight-part finance-reform series drawn from the Research Appendix prepared for the 2025 Task Force.

4. The Malatinszky Report, Close Up

Cruz-Guzman and the Malatinszky Report, Part 3: The Cruz-Guzman Defendants Ignore the Broad Scope of Plaintiffs' Complaint
Contrasts how Minnesota tort law ordinarily allocates the burden of proving that a multi-caused harm is divisible — placing it on the party trying to limit its own liability — with the Minnesota Supreme Court's Cruz-Guzman “substantial factor” standard, which places a version of that same burden on the plaintiffs. The post then shows that the operative Amended Complaint, filed June 27, 2024, seeks far more than an integration remedy: it pleads funding, staffing, and instructional-capacity claims that stand on their own.

Cruz-Guzman Experts Have a Duty to Inform the Court What Strategies Will Provide Minnesota Students with an Adequate Education
Walks through Malatinszky's own proficiency tables — district-wide, school-by-school, and disaggregated by non-ELL Black subgroup — and finds an overwhelming, five-year pattern of constitutional inadequacy across both district and charter schools in Minneapolis and St. Paul. Higher Ground Academy's results for the same subgroup, three to five times higher, sit unused in the record as proof that better outcomes are achievable. Argues the Court should require every expert to answer what a remedy should actually contain, not just what didn't cause the problem.

5. What Actually Works

Cruz-Guzman Series, Part 5: Beginning With the End in Mind — What an Adequate Education Actually Requires
Four independent lines of research — Fryer and Dobbie's charter-effectiveness studies, Michigan's evidence-based cost model, Illinois's itemized Evidence-Based Funding brief, and Karin Chenoweth's qualitative case studies — converge on the same bundle of practices: more instructional time, coaching-paired feedback, data-driven instruction, high-dosage tutoring, and a genuine culture of high expectations. The post shows how Brooke Charter Schools and Higher Ground Academy each weave those practices into a coherent, mutually reinforcing system, rather than treating them as an à la carte menu.

6. Who Isn't at the Table

Who's Missing From the Courtroom? Cruz-Guzman and the Case for Active Stakeholder Involvement
Compares Cruz-Guzman's decade of litigation — conducted with little participation from metro districts, educator organizations, or parent groups — to Kentucky, Ohio, New York, and New Jersey's school-finance cases, each built around broad coalitions from the outset. Warns that a remedy shaped without the districts, unions, and schools that would have to carry it out risks being unworkable, resisted, or never meaningfully ordered at all.

Next in series: strategies that Minnesota educators, experts, and advocates could use to influence the Cruz-Guzman parties toward a broad, multi-factor adequacy framework.