2013 Legislative Session
Update
MinnSPRA Referendum Workshop
Scott Croonquist, Executive Director, Association of Metropolitan School Districts
June 18, 2013
www.amsd.org
2013 Legislative SessionEducation Bill Summary
Omnibus E-12 Education Act (Chapter 116) Highlights:
•
Bill spends $15.66 billion over the 2014-15 biennium - an increase of $485
million.
•
•
•
•
•
•
•
•
$238 million formula increase (1.5 percent per year)
$134 million for all day Kindergarten
$40 million for early learning scholarships
$40 million increase for special education
$10 million increase to compensatory pilot grants
$6.6 million for new assessments
$3.5 million increase for safe schools levy
$1.4 million for teacher growth and evaluation grants
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2013 Legislative SessionEducation Bill Summary
Pupil Weight Changes: Changes pupil unit weights as follows, beginning in FY 2015:
Prekindergarten Disabled:
Part-time Kindergarten:
All-Day Kindergarten:
Grades 1-3:
Grades 4-6:
Grades 7-12:
from
from
from
from
from
from
1.25
.612
.612
1.115
1.06
1.3
to
to
to
to
to
to
1.0
.55
1.0
1.0
1.0
1.2
Referendum Revenue: Converts referendum revenue from a rate per resident marginal cost pupil unit to a
rate per adjusted pupil unit. The new rate per pupil unit will generate the same revenue for each district for
FY 2015 as the sum of the old rate per pupil unit. Recalculates the standard referendum cap to reflect the
pupil unit weighting changes and conversion to a rate per adjusted pupil unit. The new standard cap is
$1,845 per new pupil unit for FY 2015, and is adjusted for inflation using the consumer price index in later
years. The grandfather cap is repealed. Going forward, the only districts that can exceed the standard
referendum cap are districts that are eligible for sparsity revenue.
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2013 Legislative SessionEducation Bill Summary
Education Accounting Shifts: The 2013 Education Bill creates a one-time mechanism to
accelerate repayment of the education accounting shifts. By September 30, the Minnesota
Management and Budget Office is directed to use any state budget surplus as of June 30, 2013
to accelerate repayment of the shifts. The State enacted accounting shifts in 2009, 2010 and
2011 to balance the state budget. Following the 2011 special session, aid payment delays
totaled over $2.1 billion and the property tax recognition shift totaled $600 million. Positive
budget forecasts in February and November of 2012 and in February of 2013 have resulted in
repayments of $1.9 billion leaving $801 million shifts to still be repaid.
Important Note: Repayment of the accounting shifts does not result in any new revenue for
school districts. Shift repayments simply mean that school districts will receive money they
already had coming sooner.
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2013 Legislative SessionLocation Equity Levy
The location equity levy is established as a component of the general
education program. The location equity levy recognizes labor cost
differentials and enhances funding stability by moving referendum
revenue to a new board approved levy. For a school district with any
of its area in the seven-county metro area, the revenue equals $424
times the adjusted pupils for that year. For other school districts
enrolling more than 2,000 students, the location equity levy level is
$212 per pupil. Here again, it is important to note that the Location
Equity Levy does NOT provide new revenue to most school districts.
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2013 Legislative SessionReferendum Authority
Effective in FY 2015, the first $300 of referendum
authority is school board, rather than voter,
approved. This applies to all school districts and
guarantees that every school district has a
minimum of $300 per pupil of referendum
revenue. If a school district already had a
referendum of $300 per pupil or more in place,
this does NOT provide any new revenue.
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2013 Legislative SessionEqualizing Factors
Enhances the equalizing factors for referendum revenue. The
bill establishes 3 tiers of referendum equalization:
•
Tier 1 – The first $300 per pupil is equalized at $880,000 of
referendum market value per resident pupil unit.
•
Tier 2 – Referendum authority between $300 - $760 per pupil is
equalized at $510,000 of referendum market value per resident
pupil. This is also the equalization rate for the location equity
levy.
•
Tier 3 - A district’s third tier referendum equalization allowance
equals 25 percent of the formula allowance minus the sum of the
first and second tier allowance and is equalized at $290,000 of
referendum market value per resident pupil unit.
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2013 Legislative SessionReferendum Freeze
• Operating referendum freeze: Prohibits a district from
conducting a referendum election to increase its
referendum allowance for FY 2015. However, there
are several exceptions:
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•
•
•
A district may renew an expiring referendum at the same
allowance as the expiring referendum;
A district is exempt from the freeze if it adopted a board
resolution prior to June 30 to conduct a referendum in 2013.
A district is exempt if it did not authorize an operating
referendum in fiscal year 2014.
A district is exempt if it is in statutory operating debt as of
June 30, 2013.
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Three Education Funding Facts:
Inflation
While the 2013 education bill contains significant reforms and funding,
challenges remain:
•Education funding has not kept pace with inflation over the past
decade. Basic education revenue is the primary source of operating
funds for school districts. Between 2003 and 2013, Minnesota’s basic
per pupil funding formula increased from $4,601 to $5,224, an increase
of 13.5 percent. During that same time period, inflation grew by 42.86
percent as measured by the Implicit Price Deflator (IPD) for state and
local government purchases. In the 2013 Education Bill, the formula
allowance is increased 1.5% each year. 2013: $5,224, 2014: $5,302,
2015 and later: $5,806 (adjusted for pupil weight changes). However,
inflation is conservatively projected to rise 1.7% in FY 2014 and 1.6% in
FY 2015.
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Three Education Funding Facts:
Special Education
•
The state is not paying for its mandated special
education programming. For years school districts have
had to divert general education aid and local operating
levies to pay for mandated special education costs. Median
sources of revenue for special education over fiscal years
2000 to 2011 were: 56 percent from state special education
revenues, 33 percent from school districts’ general
education and locally raised revenues, and 11 percent from
federal revenues. The total special education cross-subsidy
(the difference between total special education costs and
state and federal special education revenue) for FY 2013
equals $614 million.
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Three Education Funding Facts:
Challenges
• More students have more challenges
than ever before. The number of
students qualifying for free and reduced
lunch, the number of English language
learners and the number of students
receiving special education services has
risen dramatically.
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State K-12 Free & Reduced Lunch 2003-2013
300,000
68,000
67,000
250,000
66,000
65,000
200,000
64,000
63,000
150,000
62,000
61,000
100,000
60,000
59,000
50,000
58,000
-
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Free Lunch
169,45 177,60 185,86 192,82 196,79 201,57 207,57 231,09 239,36 249,93 263,041
Reduced Lunch 62,380 60,766 61,784 61,334 62,979 63,339 65,997 65,806 66,930 61,935 60,703
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57,000
State K-12 Limited English Proficiency 2003-2013
70,000
9.0%
8.0%
60,000
7.0%
50,000
6.0%
40,000
5.0%
4.0%
30,000
3.0%
20,000
2.0%
10,000
1.0%
-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Limited English Proficiency
52,357 54,988 58,815 59,197 63,858 62,903 63,776 63,381 64,131 64,623 65,689
% Limited English Proficiency 6.2% 6.5% 7.0% 7.1% 7.6% 7.5% 7.6% 7.6% 7.7% 7.7% 7.80%
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0.0%
State K-12 Special Education 2003-2013
130,000
15.5%
15.0%
125,000
14.5%
120,000
14.0%
115,000
13.5%
110,000
13.0%
105,000
12.5%
100,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Special Education
111,95 113,82 114,62 115,54 117,65 119,43 120,68 122,21 123,95 125,13 125,910
% Special Education 13.2% 13.5% 13.7% 13.8% 14.0% 14.3% 14.4% 14.6% 14.8% 14.9% 14.90%
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12.0%
Resources
•Slides 2-4: Minnesota Education Bill, HF 630/Session Law Chapter 116, Available at:
https://www.revisor.mn.gov/laws/?id=116&year=2013&type=0
•Slides 5-8: Minnesota Tax Bill, HF 677/Session Law Chapter 143 (Education
provisions included in Article 3), Available at:
https://www.revisor.mn.gov/laws/?id=143&year=2013&type=0
•Slides 9-14: AMSD Research and Statistics, Available at:
http://www.amsd.org/research-statistics
•Slide 10: Legislative Auditor Report on Special Education, Available at:
http://www.auditor.leg.state.mn.us/ped/2013/sped.htm
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