Bigger Bills as Education Finance Winds Down

Senate Education Finance Hears Governor’s Finance Bill (and Others).  The Senate Education Finance Committee wrapped up its week early hearing a slate of bills including the Governor’s education finance bill.  There is very little of note in the Governor’s bill in terms of funding with the sole appropriation 0f $2.8 million to the Professional Educator Licensing and Standards Board to create an online licensing system, some shuffling in the Voluntary Pre-Kindergarten Program, and movement of some revenue from the Unemployment Compensation Aid for seasonal workers from this biennium to next biennium largely due to the shift in the payment schedule for this aid from 100% current year to 90%/10% the same as it is for other aid programs.  Here is a link to the text to the Governor’s Education Finance bill:  SF 5252.  Here is a link to the bill summary prepared by Senate Education Finance staff:  SF 5252 Bill Summary.  Here is a list of the change items:  Change Items in SF 5252.  The Senate will be adding additional approprations to the framework of the Govenror’s bill.   The agreed-upon target for K-12 education between the Executive and Legislative branches is approximately $44 million.  It appears that about $27 million will be going toward additional funding for the READ Act with the remainder going to a variety of programs.  One bill of interest that may receive considerable attention is Senator Cwodzinski’s SF 4907.  SF 4907 would provide $20 per pupil to all districts in the state and $2 per student to coopoerative units to create systems to impove student attendance.  Student attendance rates have seen a downturn since the pandemic and SF 4907 seeks to stem that fall-off.  The testimony related to the bill was very compelling and it would not be a surprise to see at least a healthy portion of the $20 million contained in SF 4907 to make its way into the Senate’s omnibus package.

I also wanted to post an historical tracking sheet of education-related levies that was prepared by Senate Education Funding staff.  As I testified last week in the Senate Education Committee, education-related levies have grown dramatically since the elimination of the general education levy for property taxes payable in 2002.  This tracking sheet shows each of the education levies at their current amount and their estimated amounts for taxes payable in 2005 and 2006.  As you can see, by taxes payable in 2025, the amount will exceed $4 billion, a more than tripling of the total collected for taxes payable in 2002.  While new funding streams that include a levy component, particularly Local Option Revenue and Long Term Facilities Maintenance have been added to the education funding system and have contributed to the overall levy increase, the erosion of the equalizing factors for Local Option Revenue, the Operating Referendum, and the Debt Service Program has also been a major contributor to the rising levy.  It all makes for an interesting discussion and that discussion should be highlighted during the 2025 Legislative Session.

The committee also heard SF 4995, Senator Grant Hauschild’s bill that creates a new property tax relief program for districts with heavy concentrations of seasonal/recreational property.  Concentrations of seasonal/recreational property can (but not always as will be evident from the data run) make it difficult for districts to pass operating referenda.  But looking at the data run, some of the largest benefit goes to districts at our near the maximum referendum amount (Minnetonka and Wayzata).  Compare that to some of the poorer districts in the state without a referendum levy that would also benefit.  After more than 30 years in the business of education funding, it’s always a bit surprising when witnessing some of the anomalies that show up when a formula is developed.  Here is the data run that accompanies SF 4995:  SF 4995 Property Tax Relief Amounts for Pay 25–Estimated Real or Potential.