Education-equalization proposal to go before state task force

Beth Hawkins, MinnPost, November 27, 2012 – This afternoon, the education policy agenda for the next legislative session is getting a soft roll-out in a conference room in the Roseville offices of the Minnesota Department of Education. It’s not sexy, it’s not easy to understand, and it’s utterly devoid of gimmicky items like letter grades for schools and third-grade hold-backs.

The state Education Finance Working Group will consider a series of recommendations [PowerPoint] to overhaul the impossibly complicated, uneven and unpredictable state system for funding education. Think of it as the revenge of the pocket-protector set.

Dane Smith is president of the think tank Growth & Justice and a member of the panel. “There are widely held concerns that the formula is too complex and too unequal,” he said in an interview yesterday. “There are too many little Band-Aids appended to it.”

A reasonable and adequate school funding stream is crucial for the state’s prosperity, he added. “There isn’t much of an alternative here,” said Smith. “Even [former Gov. and privatization proponent] Jeb Bush in Florida has said 95 percent of our work force is going to come from the public schools.”

The report the task force will discuss has been a long time in the making. Back when Gov. Mark Dayton was just one of a field of DFL gubernatorial candidates, he spent a lot of time listening to educators.

Seeking stability

More money for schools was atop their wish list, they told him, but a close second was stability. How much funding could a district count on from year to year, and how much latitude would they have to spend it on their highest priorities?

Soon after his inauguration, Dayton asked state Education Commissioner Brenda Cassellius to appoint a panel to take up the remarkably complicated issue. In May of 2011, it delivered a 25-page set of recommendations that the Legislature’s GOP leaders had just enough time to ridicule — Rep. Pat Garofalo said the panel’s members should “grow up”—before the state shutdown.

Last summer, Cassellius and Dayton reappointed many of the same policy geeks — there are only so many people in Minnesota who know how schools are funded — to a slightly reconfigured task force [PDF] and asked it to prepare recommendations for the administration to consider as it preps for the 2013-2014 Legislature.

A statewide levy

The centerpiece is expected to be the replacement of the current hodge-podge of local school-funding levies by a statewide general education levy. The change would return a major plank in the school funding system back to the way it worked before first Gov. Jesse Ventura and then-Rep. Tim Pawlenty dismantled the so-called Minnesota Miracle.

Before that point, the state collected a uniform general education levy from property holders, which it then redistributed evenly throughout the state along with other education funds. Districts still turned to voters to ask for additional money, but more often for big-dollar projects like new facilities and not for general operating revenue.

The details are mind-numbing to mere mortals, but the upshot of the changes made a decade ago decreased the amount of school funding provided by the state. This forced more districts to ask voters to assess themselves in local levies, to increase the amount they asked for and to spend the money keeping teachers in classrooms.

It also created a wildly disparate financial playing field where wealthy districts were able to ask the owners of pricier homes for more, poor districts were unable to get anything, and districts with large amounts of commercial and industrial property enjoyed an advantage.

Revenue hasn’t kept pace as costs rise

Overall school funding as a percentage of personal income has fallen by a fifth, from 5 percent to 4 percent, since the mid-1990s. Nor has the revenue stream kept pace with inflation. Meanwhile, the cost of education has spiked over the last decade as the number of poor children in the system has risen by 10 percent, said Smith.

The task force is expected to re-endorse a proposal put forth by its 2011 predecessor to even out, or “equalize,” the situation by rolling $400 of each levy into the general education fund. In short, a local tax generally considered regressive would simply be replaced by a statewide one held to be progressive. Individual property tax bills would fluctuate in the short term, but a complex system of fiscal checks and balances would smooth things.

Return of the ‘miracle’

If the idea sounds familiar, it should: It is essentially the same funding fix as the 1971 Minnesota Miracle, birthed in a previous legislative stalemate and notable for making local pupils the envy of the rest of the nation for a time.

The change would also spread some balm on the wounds suffered by Minnesota’s charter schools, which have been badly damaged by an inability to borrow at government rates to compensate for the biennium’s budget-balancing 60-40 shift in state aid. They would receive the same per-pupil share of the statewide levy.

The task force is expected to put forth a number of other recommendations that would dovetail with the effort to simplify education finance, including accounting for inflation since 2003, making a critical change to the way the state handles dollars tied to special education and to integration efforts and finding a way to direct resources to early childhood education.

And acknowledging at a policy level that teachers and school administrators can’t be expected to continually do more with less might go a good ways toward restoring the willingness of educators, badly bruised by the last few legislative sessions, to consider painful reform proposals.

Much of Dayton’s platform

In short, it’s much of the seven-point education policy platform Dayton unveiled a few weeks into his governorship. And there might even be a silver lining for his administration in the proposal’s wholesale rejection last year.

“In the past a lot of these things have been put forward but they would be difficult to implement without changing the overall tax structure,” said Mary Cecconi, executive director of Parents United for Public Schools. “This would be the time to do it.”

Given that the first question the general public will ask is what will happen to their property-tax burden, the fact that Dayton can present it to taxpayers as one portion of a comprehensive package in which one tax can be offset by another is going to help sell the proposal, she added.

Indeed, task force members “get mad props” for deliberately not performing individual district “runs” — the calculations that show whose taxes will go up and down — choosing to focus instead on crafting a policy that makes sense.

Because lawmakers will undoubtedly do those runs right away, said Smith, it will be important to communicate that the end game is lessening reliance on a regressive tax.

“Over five years, people will notice that that portion of their property taxes that goes for schools is not going up as fast as it has,” he said. “The overall tax restructuring across the state — that’s the big show.”

Core of agenda expected

Task force members may not vote today to adopt the recommendations because several are new. And at least a couple of nay votes are expected. Still, it’s anticipated that the policy prescriptions will soon make their way onto Dayton’s and Cassellius’ desk and will form the core of the administration’s agenda at the Capitol.

If Cecconi has her way, that won’t be the end of it. As they toured the state, task force members found themselves repeatedly explaining that they were not asked to consider whether the streamlined, equalized funding system would satisfy the mandate in the state constitution that every Minnesota student receives an adequate education.

“Personally,” she said, “I think adequacy is the next step.”

http://www.minnpost.com/learning-curve/2012/11/education-equalization-proposal-go-state-task-force

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