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

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

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

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

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

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

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

By What Mechanism does this Relief Become Transformational

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

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

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

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

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

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

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

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

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

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

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

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

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

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