Three Major Sources of Revenue

The way Minnesota public schools are funded can be divided into three major categories: the General Education Program, Categorical Aids, and Referendum Revenue (also called Local Levies).

For several years now, the Minnesota House of Representatives Fiscal Analysis Department has produced a document called "Financing Education in Minnesota" (archived at Issue Briefs, scroll down) to explain how these work.

The "Complex Layers" and Glossary in the right sidebar provide snapshot definitions of the multiple and various line items that go into the General Education Formula Allowance and Categorical Aids.  They are largely drawn from Financing Education in Minnesota 2005-06 (published September 2005), and sometimes contain additional notes and links to more information.

The original Financing Education documents provide both the definitions and examples to help people see what a school district might use when calculating its budgets. A more current version, Financing Education in Minnesota, 2007-08 was prepared in August 2007.

In This Section

• General Education - Also referred to as the "Per Pupil Formula Allowance."
  
  
• Categorical Aids - Targeted funding established by the State Legislature to meet particular student and community needs.
  
  
• Referendum Revenue (through Local Levies) - Local property taxes limited by state statute.

At one time, school operating referenda were intended to allow local school districts to supplement state support for general education with local monies, retaining local control.  However, in 2003 the current administration began overtly counting local operating referendum that had passed—or were merely projected to pass—to supplant state support. 

The Big Tax Shift

In 2002-03, basic general education revenue was increased by $415 per pupil unit—and referendum, supplemental and transition revenue were decreased by $415 per pupil. That is, the state claimed credit for education funding in effect provided by local property taxes.

In 2005, the final state education budget included $139 million in local property tax increases (which have to be taken to voters for approval in local elections) and $95 million in "shifts."

Resources

November 2006 - Minnesota School Finance: A Guide for Legislators, Minnesota House of Representatives Research Department.

June 2006 - K-12 Education Finance Overview 2006-2007, Minnesota Department of Education Division of Program Finance.

September 2005 - Financing Education in Minnesota 2005-06, Minnesota House of Representatives Fiscal Analysis Department.

June 2004 - Understanding Education Finance, Minnesota Center for Public Finance Research, Minnesota Taxpayers Association.

April 2004 - Education Funding in Minnesota – How Did We get Here? (Power Point), Parents United for Public Schools (pdf version).

September 2003 - School Finance Made Simple (PowerPoint) - Alliance for Student Achievement.

Looking for something specific to your school district? 
Check the Payment Reports posted by the Minnesota Department of Education.

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