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Saturday, October 13, 2007
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SPECIAL REPORT SCHOOL FUNDING Officials differ on what caused need Associate Editor Why are so many Minnesota school districts cash poor? And why are a near-record number of school districts asking taxpayers to authorize operating levy referendums this fall?
Area lawmakers and Minnesota's education commissioner offer differing reasons as to why school referendums will be more numerous than high school football games by November.
Education Commissioner Alice Seagren pointed to declining enrollment statewide and the pending expiration and replacement of many existing educational levies.
Lawmakers offer different perspectives with the blame placed on factors ranging from an inequitable funding system to overspending by school districts.
Seagren, a former Bloomington School Board member who served six terms in the House and was chair of the House Education Finance Committee, points to declining enrollment as one culprit. With funding awarded on a per-pupil basis, the revenue will decrease as enrollment decreases. Seagren was designated by Gov. Tim Pawlenty's office to field questions on education funding when the Brainerd Dispatch made inquiries this month.
"Probably 80 percent of the districts are declining in enrollment," she said. "It goes across all geographic (areas). Our enrollment statistics have been declining statewide. We're an aging state. We don't have as many children."
Seagren points out that schools still have to be heated even if the number of students being educated has decreased.
The former Republican lawmaker said the GOP governor, during the last legislative session, had proposed education funding increases of 2 percent in the first year and 2 percent in the second year. She said the Legislature chose to focus on funding special education programs and fund increases of 2 percent the first year and then 1 percent the second year.
No comment from the governor
Gov. Tim Pawlenty's office said he would defer comment on inquiries made during the first week of October by the Brainerd Dispatch about the state of education funding to the education commissioner.
His spokesperson, Alex Carey, said Education Commissioner Alice Seagren, a former chair of the House Education Finance Committee and Bloomington School Board member, was the designated spokesperson on this topic.
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Seagren also said that in some cases previously approved referendums were expiring and districts are seeking to extend them.
Six years ago, Seagren noted the state faced a $4.5 billion deficit and school districts received no increases for education. The Pawlenty administration, she said, wanted to hold school districts harmless and not cut funding.
"That was a hard time," she said. "But we pulled out of that. That certainly slowed down progress."
Sen. Paul Koering, R-Fort Ripley, also points to those hard economic times as the beginning of Minnesota school districts' financial woes. The increased funding for education in the last legislative session was too little, too late, Koering said.
"It's finally catching up to the school districts," Koering said. "They don't have the money."
Brainerd School District officials contend that the average increase it has received in the past six years is 1.8 percent.
"I don't think they caught up from the years when they got zero," Koering said. "I believe the Legislature has not adequately funded education and has got us to this point." The second-term senator would like to see education funded from a dedicated source, similar to transportation, noting that constitutionally the state is responsible for that role.
"I believe we need to get back to a consistent long-term source to fund education rather than putting the burden on the property taxpayer because that's not working," Koering said. "The system is broken and has to be fixed."
He's critical of the practice of funding education from property taxes rather than state income taxes because the ability to pay is taken more into account with income taxes.
"The pressure on my constituents is close to the breaking point," Koering said.
One other suggestion offered by Koering is for the Legislature to set the benchmarks of what the percentage increase for school districts might be so school officials can do a better job of planning their budgets.
"Let's work together and get the budget targets set early (in St. Paul) and then work on the details," he said.
Rep. John Ward, a teacher for 34 years, said school districts have spent down their reserves to the bare bones and serious staff cuts will have to be made if Brainerd's referendum fails. He said the Brainerd School District has already made cuts, including the school farm and the service learning program in which Ward taught.
The Brainerd DFLer said the Minnesota tax rate, as a share of personal income, has dropped from the top five in the nation to 23rd in recent years and the state is well below average in government spending. However, with a decline in government spending comes a decline in the number of people with health insurance, declining graduation rates and traffic congestion.
"To me the unfortunate tragedy of the Interstate 35 bridge is symbolic of Minnesota's situation in education, transportation and health care."
He favors a hard look at the education funding system in hope of making it more equitable.
Ward pointed out that since he graduated from high school in 1968 the schools have been charged with providing special education and athletic opportunities for girls.
"There's so much more placed on education now," he said.
School funding, he said, is complex and there are many players at the table including school boards, teachers and support staff.
"I don't have all the answers but my belief is that I want to listen to and work with the experts to find possible solutions to that problem," Ward said. "I want to work together with all the legislators and the governor."
Another lawmaker who sees a broken system but hasn't found the precise answer is Rep. Larry Howes, R-Walker, who was first elected in 1998. He said that in those 10 years education has received more money than what was allocated in the previous 15 years. He sees "Cadillac" programs and places where cuts could be made, citing the example of a special education teacher who works one-on-one with a student when the educator could handle two or three students.
The education funding system is broken, Howes said, but everybody is afraid to fix it.
His outlook is that the state should pay for educational expenses with property taxes only being a source when extras such as a swimming pool or a hockey rink are constructed. He would like to see some adjustment made for the high transportation costs that are necessary in rural districts.
He said he likes to compare the number of students to the number of teachers to judge whether a district is overspending. Sometimes, he said, problems are caused by the way teachers schedule their prep hours with too many students being squeezed into class because of that.
In his time in the Legislature he said he really hasn't heard anyone articulate a long-term solution for consistent revenue funding.
"Some say there's not enough money. Some say it's spent unwisely, " Howes said.
Howes said he favors the state fully funding education because it's called for in the Constitution.
"The state is not meeting its obligation," he said.
He said he's aware of the need and that while he'll probably vote for the Walker-Hackensack-Akeley School District operating levy referendum, he doesn't tell others how to vote. He said that's a decision to be made by the individual voter and that his job is to represent them and not necessarily lead on this issue.
"There are problems out there," he said. "The Legislature needs the courage to say it's broken and let's fix it."
Rep. Al Doty, DFL-Royalton, said rural districts have been hit high by rising fuel prices and rising land values that make it much more difficult to pass a referendum.
"School funding is so convoluted it would drive anybody nuts," Doty said, emphasizing the districts' need for more predictable funding.
School districts with small towns made up of older folks who have just moved in from the farm and young people who are just getting started are particularly hard hit, Doty said.
"There's no easy sound bite answer," the first-term lawmaker said of education funding. "It invites a good hard look. We're operating on formulas from 20, 30, 40 years ago. ... It's time to make those things fit today's needs."
Sen. Mary Olson, DFL-Bemidji, was pleased the Legislature attempted to provide school districts relief in funding special education in the last legislative session but expressed concern with escalating property taxes.
"I think we did a lot last session to turn around the cuts that came before that ... but I still think we're still back to the same problems we have, with a much larger percentage (of the education cost) at the local level."
Olson said she hates to see parents, teachers and administrators expending energy when school districts have to go back to the people and ask for operating levy referendums. She wants to see the Legislature allocate more money for education funding.
"It's a waste of time and resources trying to get these referendums passed," she said.
Olson said there is a need for people in St. Paul who have an understanding of education finance. Currently, she said the funding formula puts rural schools at a disadvantage. Funding schools, she said, hasn't been nearly the hardship in suburban districts that it has been for outstate districts. Olson said more money is needed for education and the funding formula for rural districts must be studied.
"Heading into the next election this will and should be a major issue," she said. "We really need to make this message heard."
The lawmakers and Seagren agreed Minnesota school districts would fare better if the federal government lived up to its commitment of funding 40 percent of special education costs. The education commissioner said the current level of funding is about 15 percent and she didn't believe the federal funding had ever risen higher than 18 percent.
Seagren said she hopes the school districts with operating levy referendums receive community support and noted the Brainerd district's cooperation with Central Lakes College and its creative programs.
"I think Brainerd is a wonderful, viable, strong, school district," she said. "I've really appreciated their innovation. Their advanced placement program has been just a star. Hopefully, those are the things the voters will remember."
While she said she and the governor were committed to putting as much money as possible into education, she issued a cautionary note that because of the housing market situation Minnesotans should not expect much of a revenue increase or any kind of a surplus.
She maintained the state has been largely successful in moving school funding away from local property taxes, a shift in funding that was begun in earnest in 2001. At the high point the state paid for 82 percent of education financing and that figure has dropped to about 78 percent. Seagren said during the years of the so-called "Minnesota Miracle" in the 1970s the target was about 70 percent state aid.
"Funding is complex and the reasons for referendums are many," Seagren said. "Sometimes we need to fill the gaps because of declining enrollment or special education."
MIKE O'ROURKE may be reached at mike.orourke@brainerddispatch.com or 855-5860.

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