Minnesota School Finance: a Guide for Legislators About This Publication This Guidebook Explains How Public Elementary and Secondary Schools Are Funded in Minnesota
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Minnesota School Finance: A Guide for Legislators About this Publication This guidebook explains how public elementary and secondary schools are funded in Minnesota. By Tim Strom, Legislative Analyst November 2020 Contents Executive Summary .......................................................................................... 1 Introduction ..................................................................................................... 2 School Finance Terminology .......................................................................... 11 Property Tax System Terminology ................................................................. 17 Counting Students.......................................................................................... 19 General Education Revenue........................................................................... 21 School Transportation .................................................................................... 43 Capital Finance ............................................................................................... 45 Special Education ........................................................................................... 57 American Indian Programs............................................................................. 61 Community, Early Childhood, and Adult Education ...................................... 64 Cooperative Programs ................................................................................... 77 Dual Enrollment Programs ............................................................................. 80 Charter Schools .............................................................................................. 83 School Desegregation and Integration .......................................................... 86 Career and Technical Education .................................................................... 90 State Academies............................................................................................. 93 Miscellaneous Funds for Education ............................................................... 97 Income Tax Deductions and Credits ............................................................ 107 Taconite Revenue for School Districts ......................................................... 109 Tax Relief Aids and Aids in Lieu of Taxes ..................................................... 115 Teacher Retirement ..................................................................................... 118 Postemployment Benefits ........................................................................... 122 School District Accounting ........................................................................... 124 Appendix ...................................................................................................... 133 This publication was prepared by Tim Strom, a legislative analyst specializing in the area of K-12 education finance. Questions can be addressed to Tim at 651-296-1886. Minnesota House Research Department provides nonpartisan legislative, legal, and information services to the Minnesota House of Representatives. This document can be made available in alternative formats. www.house.mn/hrd | 651-296-6753 | 600 State Office Building | St. Paul, MN 55155 List of Tables Table 1: Characteristics of Minnesota Independent School Districts, 2018- 2019 ............................................................................................................. 5 Table 2: Characteristics of Minnesota Charter Schools, 2018-2019................ 6 Table 3: School Enrollment 1959-60 to 2022-23 by School Type .................... 7 Table 4: Minnesota School Enrollment .......................................................... 10 Table 5: General Education Formula Increases 1989 to 2021 ....................... 12 Table 6: Education Acronyms ........................................................................ 15 Table 7: Enrollment bWeightsy Grade .......................................................... 20 Table 8: General Education Revenue Components Excluding Referendum Revenue ..................................................................................................... 21 Table 9: Basic Education Formula Allowances ............................................... 22 Table 10: Compensatory Revenue Characteristics for Selected School Buildings for the 2020-21 School Year ...................................................... 26 Table 11: English Learner Revenue Characteristics for Selected School Districts 2020-21 School Year ................................................................... 27 Table 12: Equity Revenue Percentiles............................................................ 32 Table 13: Pension Adjustment Aid Entitlement ............................................. 33 Table 14: Characteristics Lofargest and Smallest School Districts................ 35 Table 15: Revenue Reserved for Class Size Reduction .................................. 36 Table 16: General Education Program Aid Entitlement and Levy ................. 38 Table 17: Referendum Revenue Allowances and Equalizing Factors ............ 41 Table 18: Referendum Revenue Amounts ..................................................... 41 Table 19: Permanent School Fund Endowment and Income ........................ 42 Table 20: Debt Service Equalizing Factors ..................................................... 47 Table 21: Debt Service Equalization Aid Calculationa Hforypothetical District ....................................................................................................... 47 Table 22: Total Statewide Debt Service Amounts; Regular and Enhanced Equalization Aid ......................................................................................... 48 Table 23: School Building Bond Agricultural Credit ....................................... 49 Table 24: Capital Project Levy ........................................................................ 49 Table 25: Maximum Effort Bond Sales ........................................................... 52 Table 26: Long-Term Facilities Maintenance Revenue; Appropriation and Levy ........................................................................................................... 54 Table 27: Building Lease Levy Amounts ......................................................... 55 Table 28: Telecommunications/Internet Access Aid ..................................... 56 Table 29: Special Education Unduplicated Child Count by Disability Category (All Ages) as of December 1, 2019 ............................................................ 57 Table 30: Special Education Appropriations .................................................. 60 Table 31: Tribal Contract School Estimated Enrollment and Initial Estimated Aid Entitlement for FY 21 .......................................................................... 62 Table 32: Appropriations for American Indian Programs .............................. 63 Table 33: Community Education Revenue ..................................................... 65 Table 34: Programs for Adults with Disabilities ............................................. 65 Table 35: Early Childhood Family Education Revenue................................... 67 Table 36: Early Childhood Home-visiting Program ........................................ 67 Table 37: School Readiness Aid ..................................................................... 69 Table 38: Early Learning Scholarship Appropriations .................................... 71 Table 39: Developmental Screening Aid ........................................................ 72 Table 40: Head Start Revenue ....................................................................... 73 Table 41: School-aCarege Program ............................................................... 74 Table 42: Adult Basic Education Programs .................................................... 76 Table 43: Consolidation Transition Revenue ................................................. 78 Table 44: Concurrent Enrollment Aid ............................................................ 82 Table 45: Charter School General Education, Special Education, and Building Lease Aid ................................................................................................... 84 Table 46: Achievement and Integration Maximum Revenue for Fiscal Year 2021 ........................................................................................................... 87 Table 47: Integration Revenue Allowances Per Pupil Fiscal Years 2001 to 2013 ........................................................................................................... 87 Table 48: Estimated Appropriations and Levies for Integration Activities Based on 100% Aid Entitlement; Amounts for Aid Fiscal Year ................. 88 Table 49: Appropriations for Other Integration Funding Programs .............. 89 Table 50: Funding Formulas for Career and Technical Revenue ................... 90 Table 51: Career and Technical Revenue ....................................................... 91 Table 52: Appropriations for ServeMinnesota and the Minnesota Reading and Math Corps ......................................................................................... 92 Table 53: Direct Appropriations for the Minnesota State Academies for the Deaf and Blind ........................................................................................... 94 Table 54: