Education is the Largest Part of the State Budget

1. A Crossroads for Public Education in MinnesotaParents United for Public Schools…Committed to quality public schools for all Minnesota children

2. Education is the Largest Part of the State Budget A Constitutional mandate Section 1.”UNIFORM SYSTEM OF PUBLIC SCHOOLS. The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.”

3. The Lion’s Share of District Funding Per pupil formula (Set by State Legislature) x AMCPU (Adjusted Marginal Cost Pupil Unit) = District Operating Funds

4. The Per Pupil Formula has Averaged an Annual Increase of 1.14%

5. How Local Levies fit into the equation • $0------------$1985 per pupil • 88% of school districts have local levies in place • Statewide, on average local levies comprise 18% of a district’s operating fund

6. Requirements for public schools grew while revenue did not • Testing • Standards • Special education mandates • Transportation • English Language Learning • Health and safety mandates • Physical Education • HIV/AIDS Sex Education • Drug/Alcohol Abuse Education • Bus Safety • Title 1 programs • 100% Rule

7. Cost Analysis

8. Tax Reform in the 90’s State policies reforming property tax • Lowered taxes on commercial property • Agricultural and recreational land removed from the equation for school taxes The 2001 General Education Buy Down • The state picked up school costs once paid by local property taxes • Passed half of the legislation—the liability was accepted, without a stated revenue stream to support it.

9. Schools and Revenue in the 90’s Increases in growth Increases in expectations Increases in cost Schools Incometax reductions Property tax reductions Business tax rate reductions Revenue

10. K-12 Population Change

11. Special Education Requirements 1975 –”Individuals with Disabilities Education Act” (IDEA), Public Law 105-17 • Brought 1 million children who were previously kept at home or in institutions into the public school system. • Federal government agreed to pay 40% of excess cost to educate these children. It has never provided 40% • In 2004, Minnesota school districts reallocated $378 million meant for regular education instruction to provide state and federally mandated special education programs • In 2005, the state auditor’s report on public school costs showed that the greatest increases in school budgets were for special education.

12. Population ChangeTom Gillaspy

13. Change In Minnesota School Enrollments 1999-00 to 2004-05 By Language Spoken At Home Tom Gillaspy

14. Kids Count findings Children’s Defense Fund • Most recent data shows: • About 1 in 10 MN children under 18 live in poverty • Estimated 7,000 more children living below poverty line than 5 years ago • 68,000 uninsured children • Greater participation in Food Support and Free and Reduced School Lunches

15. % of MN children rated “not yet” performing adequately at Kindergarten entrance Brookings Institute Language and literacy Mathematical thinking

16. So… • More children requiring Special Education services (SpEd) • More children needing English Language Learning services (ELL) • More children qualifying for Free and Reduced Lunches (FRL) • 100% rule for the first time in history

17. And the Response? • Programs shown to close the achievement gap have been cut • child care eligibility • early childhood education • after school programs • English Language Learning services capped at 5 years • Special education inflator abolished • Loss of Federal dollars to states with higher concentrations of poverty

18. 2005 Legislative Session

19. Why are we at a Crossroads? • We are working with the “100% Rule” • Our population is changing. • Closing the achievement gap means targeted services to a growing percentage of our K-12 students. • Trends seem to indicate less interest in investing in public structures.

20. Price of Government in MinnesotaJohn Gunyou The Price of Government is the State of Minnesota’s official measure and is factored as total revenue as a percentage of personal income.

21. What are other states doing with their state taxes? • 43 states enacted large tax cuts in the 90’s. • Most have neither reversed those cuts nor enacted other tax increases to replace lost revenue.

22. So why should any of this matter to us?

23. Minnesota Future Labor ForceTom Gillaspy

24. Minnesota Ten Year Graduation Rates From 9th Grade To Bachelor’sTom Gillaspy Minnesota Private College Council

25. 1,400,000 1,200,000 1,000,000 18-24 800,000 65+ 600,000 5-17 400,000 200,000 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 By 2020 65+ is Larger than K-12By 2030 65+ Doubles Tom Gillaspy

26. Reduced tax revenues Beginning in 2020, from this cohort we can count on • Less income tax revenue • Less sales tax revenue • Less ability to pay increased property tax

27. We Need a Way to Fund Schools • Keeps Minnesota innovative and competitive • Uses a fair tax structure • Accountable to the public

28. Parents United believes we need to • Prepare ALL students for 2020 not 2006 • Tie funding to those high expectations we have for our schools. • Fund schools differently than the model devised in the 70’s • Make the case that excellent schools are not just about kids, but about the economic viability of our state.

29. Parents United Working to engage concerned citizens in the conversation around public policy and its effect on our public schools www.parentsunited.org Advocates for Minnesota’s Public Schools