State funding formulas are unfair, argue some schools


The state’s funding formulas for schools are unfair, and both taxpayers and students in property-poor districts suffer as a result.

That argument was made Wednesday by supporters of two bills that would increase what the state calls “equalization” aid in certain revenue programs. Both HF248, sponsored by Rep. Linda Runbeck (R-Circle Pines), and HF579, sponsored by Rep. Melissa Hortman (DFL-Brooklyn Park), speak to the concerns of school leaders like Paul Durand.

“We’re advocating for fairness for all students, regardless of their ZIP code,” said Durand, superintendent of Rockford Area Schools. His district, he said, is “a prime example” of the gaps in opportunities for students that have grown between districts as a result of the state’s “broken” funding system.

Increasingly, districts have had to rely on local property taxes as an alternative to state aid, many school leaders say. But the property wealth of districts varies – and that affects the burden that individual homeowners shoulder when they approve local tax increases.

Schools for Equity in Education, an advocacy group that represents some Minnesota districts, passed out spreadsheets in the House Education Finance Committee to back up its case. In the Wayzata school district, for example, local taxpayers pay $204 per $100,000 of property value to raise $1,633 per pupil. But to raise the same per-pupil amount in rural Milroy, taxpayers pay $477 per $100,000 of property value.

Many school leaders from districts with less per pupil property wealth say that, because local voters get less bang for their buck, they’re less likely to approve tax increases for schools. In Rockford, residents rejected four proposed tax increases – and saw “major” program cuts and staff layoffs in their classrooms – before voting yes in a 2009 referendum, Durand said.

Not all of the districts supporting the bills are rural. “We are primarily residential and have little commercial or industrial property,” said Jeff Solomon, finance director of the Rosemount-Apple Valley-Eagan district. In terms of tax capacity, “we are, in fact, property-poor.”

One big question is how lawmakers would pay for “equalization” bills. The price tag would depend on how much the formulas are changed, but a fiscal note for HF579 said that bill would cost nearly $78 million in fiscal year 2014.

Legislators such as Rep. Jim Davnie (DFL-Mpls), who represents many high-poverty urban schools, are also quick to say that, when it comes to education funding, “equal” is not the same as “fair.” Lawmakers should consider the differing needs of students when they allocate funding, he said after Wednesday’s hearing. He said he supports HF248 and HF579 “as part of a package,” adding that they’re really more about property tax relief than about helping schools.

Both bills were laid over by the committee for possible inclusion in the omnibus education finance bill.

HF579 has a Senate companion sponsored by Sen. John Hoffman (DFL-Champlin). That bill, SF569, was scheduled for a hearing in the Senate Taxes Committee on Wednesday morning. HF248 has no Senate companion.