Building a better formula

Picture the state’s education funding formula as a Rube Goldberg drawing depicting a complex invention with pulleys, levers and other mechanisms that get the job done but in less than elegant fashion.

House K-12 Education Finance Division Chairwoman Mindy Greiling (DFL-Roseville) has proposed a formula she likens to the precise geometry of the Eiffel Tower, built to scale according to an architectural blueprint.

Some call it the “New Minnesota Miracle.” It’s also known as Article 9 of HF2, the House omnibus K-12 education finance bill that Greiling sponsors, and which the House passed 85-48 April 23 after six hours of debate and 31 offered amendments. The bill contains no new education mandates, cuts outdated mandates and promotes shared services among districts as cost-saving measures.

Still, in order to reach the House DFL biennial target of $11.6 billion for education spending, $1.8 billion in accounting shifts is included in the bill, which also proposes $275 million in one-time federal stimulus funds to offset spending cuts.

House Republicans, even those who say they like at least parts of the plan that would stabilize and equalize state aid to school districts and take property tax levies out of the formula, say it isn’t prudent and much less realistic to approve the changes without the money to back it up.

Rep. Pat Garofalo (R-Farmington), the division’s minority lead, identified “three problems” with the bill: “There is no funding, there is no reform and there is no leadership.”

Garofalo noted the bill contains $185 million less in funding from this year’s base, compared to the governor’s proposal to increase education spending by $507 million, and that the bill includes none of the governor’s teacher transformation programs. Furthermore, he said, the bill “kicks the can down the road for four more years.” He referred to the proposed 2014 effective date to implement the funding formula reforms.

The floor debate featured prolonged discussion over perennial hot buttons including a revived unsuccessful amendment that would have allowed school districts to start before Labor Day and several proposals that highlighted the tension between those who advocate for charter schools and those who perceive them as competition with district schools. Rep. John Lesch (DFL-St. Paul) unsuccessfully proposed even stricter accountability measures for charter schools than those already included in the bill.

However, the heaviest criticism fell to the proposed accounting shifts that could help balance the education budget without cutting spending, and to putting the proposed funding reforms into statute without a revenue source.

Heavy criticism for accounting shifts

The shifts would mean the state would defer 27 percent of its state aid payment, not 10 percent, to school districts in fiscal year 2010. It would authorize an advance payment shift of 90 percent for school districts in statutory operating debt. It would also reestablish a levy recognition shift at 49.1 percent effective in 2010. Without them the cost would be $13.4 billion.

Members were also concerned shifts of that size could harm school districts that would pay interest on short-term loans or draw down their cash reserves to cover their cash flow needs. The impact is estimated around $25 per pupil, according to nonpartisan House fiscal staff.

“The shifts are better than the straight cuts, at least that’s what the schools told us, and I agree with that,” Rep. Randy Demmer (R-Hayfield) said April 20, but said he would not support the bill. “Assuming we want to get back to 90-10 with our funding and assuming 2014 comes, we have $3.5 billion that will have to be made up to cover education. That’s to cover the funding for Article 9 and to pay back the shifts.”

“I’m ashamed of this bill,” said Rep. Mark Buesgens (R-Jordan), who unsuccessfully offered several amendments that could have eliminated integration revenue, revoked the state’s participation in the No Child Left Behind Act of 2001, and raised basic per pupil aid while getting rid of most other funding categories.

The flavor of the session: GRAD testing

Demmer decried the policy provision to create an alternative path to graduation for students now in 11th grade who do not pass the math Graduation Required Assessment for Diploma after three tries. Failing to hold students to test results is “pulling the plug” on high academic expectations, he said.

Rep. Carlos Mariani (DFL-St. Paul), chairman of the House K-12 Education Policy and Oversight Committee, said he could not let that charge go uncontested, saying that 3,000 to 5,000 students are expected to fail the test, and if they did not graduate it would be difficult to pursue college or a job.

“Society seems to have this single-minded, one-dimensional focus and fascination with testing. I just want to submit that our responsibility here is not to a test,” Mariani said. “It is to the young people, the students in our K-12 system. If whatever tools we’re using isn’t getting the job done, let’s stop using them and use better tools.”

Greiling said the bill provides the “adequate, equitable funding that we all want. Everyone agrees it’s a good bill. It’s the price tag. But the price tag is nothing more than an inflationary increase to the funding if we implement it over six years.”