declining funding degrading quality

8/4/2019 Declining Funding Degrading Quality

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Minnesota 2020

2324 University Avenue West, Suite 204, Saint Paul, MN 55114

www.mn2020.org

All work on mn2020.org is licensed under a Creative Commons

Attribution-No Derivative Works 3.0 Unported License.


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1Minnesota 2020 - www.mn2020.org

Table of ConTenTs

Executive Summary 3

Findings 6

Recommendations 7

Introduction 8

A Statewide Perspective 9

Results 10

I. All Respondents

II. No Operating Levy

III. No Election in 2010

IV. Won 2010 Election

V. Lost 2010 Election

VI. Rural schools

Conclusions 15

Appendix 17

Methodology


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Superintendentshave spoken:

The funding systemfor public schools

in Minnesota is

broken.


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4 Declining Funding, Degrading Quality: 2011 Survey of Minnesota Superintendents

Despite levy increases, total per-pupil revenue statewide is still below 2003 levels

by 3.2 percent. As a result, 80 percent of superintendents responding to MN 2020s

April 2011 survey said without changes to this state aid/property tax funding model,

educational quality will worsen, with most of the rest saying it will stay the same.

The unease over inadequate funding is growing among

Minnesota superintendents. When asked in the sameMN2020 survey back in 2007, 49 percent of superintendents

said their districts would not be on solid nancial footing

the following school year. At the time, schools faced about

a 12 percent real per-pupil state aid cut. In the 2011 survey,

the number of superintendents unsure of their districts

nancial footing jumped to 67 percent, as years of cuts had

made a deep impact.

Compounding a decade of underfunding, have been two

biennia of delayed state payments to schools, totaling

more than $2 billion. As in the FY 2010-11 biennium,policymakers again delayed payments to schools in order

to balance Minnesotas FY 2012-13 budget. Presented

with cash ow problems, schools are forced to either burn

through reserves, take out loans or go back to voters for

levy increases.

Generally voters have approved levies to fund extras or a districts capital

improvements. However, the combination of recent state funding declines and

delayed funding are forcing school districts to rely on levies for traditional operating

costs to maintain educational quality, reasonable class sizes, and basic schoolactivities. By 2010, at least 90 percent of Minnesota districts had some form of an

operating levy.

With funding instability coming from St. Paul, schools are extremely limited in how

far ahead they can plan, not knowing when or how much revenue they will have,

or when the state will nally pay them what theyre owed. When expenses rise,

districts have no guarantee that revenues will rise enough to match costs, even with

a local levy.

80%

Worse

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findings

9 Ination-adjusted, state aid to schools ison a decade-long decline. By the 2012-13

school year, real per-pupil state aid will

have declined by nearly 12.8 percent

over the decade.

9 Only 37 percent of superintendentsresponding to MN2020s survey expect

their district to be on solid nancial

ground in upcoming school years.

9 93 percent of superintendents surveyedfeel the current education funding

model is broken.

9 80% of superintendent surveyedsaid that educational quality will

get worse if the legislature and

governor do not change the current state

aid/property tax funding model.

9 Fewer and fewer districts are able to fundtheir schools without levies. At least 90

percent of Minnesota school districts havean operating levy in place.

9 Of respondents not under an operatinglevy, 30 percent said they expect to run

one in the next year.

9 Districts where the 2010 levy electionfailed will have to make more

signicant reductions in the next year,

laying off an average of eight teachers.

12.8%

37%

93%

80%

90%

30%

8


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reCommendaTions

9 Signicantly increase the base school funding to levelsthat will adequately fund education.

9 Payback school funding shifts; stop using education

money to balance the states general fund budget.

9 Seek a balanced approach to state budget shortfalls thatpairs cuts to non-educational services with progressive

revenue increases.

9 Re-work the state school funding formula to moreadequately address funding disparities.

9 More adequately fund special education and other stateand federally mandated services.

mt 2020 c:

Signicantly increasethe base school

funding to levels thatwill adequately fund

education.


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The 2007 report, A Chilling

Call to St Paul, can be found

at http://bit.ly/chillingcall


inTroduCTion

In April 2011, MN2020 surveyed Minnesotas superintendents to

determine schools overall funding status in light of the near decades-

long state funding decline. The surveyed also sought to identify the

role property tax levies played in recovering lost state dollars and

superintendents overall ability to provide an adequate education in atime of declining investments. MN2020 conducted the same survey in

2007.

In 2007, school districts faced a roughly 12 percent real per-pupil

state funding decline. Many responses in both surveys had a similar

negative outlook. Some superintendents are less hopeful now that

ination-adjusted funding levels will ever recover to FY 2003 levels

and have adjusted to what they call a new normal in funding.

Many responding superintendents exhausted all short-term measureswith minimal classroom impact, such as cutting administrative staff,

extracurricular activities and after school programs, and making

bussing routes more efcient. One rural superintendent reports cutting entire programs, including

all industrial technology classes. That administrator responded: The current level of funding is

destroying education.

Property tax levies have kept their districts from making even more drastic cuts, responding

superintendents say; however, theres only so much they can levy and now face legal and voter

limitations.

When asked how the current state aid/property tax funding systemis affecting education quality, half of responding superintendents

say its getting worse, with only 3 percent feeling it will improve.

However, when asked if the system isnt improved in the next two

years, 80 percent say it will worsen, with only 1 percent optimistic

for advances in education quality.


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a sTaTeWide PersPeCTive

Weve reduced for so long that there is now no way to keep cuts out of the classroom, said Robert

Slotterback, superintendent of Richeld Public Schools in a follow-up phone interview.

Next years cuts may directly impact class size.

Richeld, a 5,000-student district that shares its northern border with

Minneapolis, has made reductions for eight of the past ten years. It headed

into the 2011-2012 school year facing a $1 million dollar shortfallwith

another two million dollar shortfall projected for the 2012-2013 year. Its

budget is roughly $50 million yearly, with almost 25% of its operating

revenue now coming from local property taxpayers.

In south central Minnesota, the Fairmont school district faces a $1.5 million shortfall that will cause

signicant reductions, directly impacting students, according to Superintendent Joseph Brown.

Fairmont had to cut 40 positionsa major shift in a district that serves about 1,700 students. It was

everything: teachers, staff, cooks evenyou name it, Brown says.

Fairmont now lives by the motto Its up to us. But there are limits

to what districts can do without state support. Its a stressful time for

administrators, staff, teachers, childrentheres not a lot of security out

there, Brown said.

On top of state aid cuts, all districts will have 40 percent of their state aid payments delayed,

causing a cash ow issue in many districts. As of late July, northeastern Minnesotas Cook County

Schools were still calculating their increased borrowing needs. Cook County Superintendent Beth

Schwarz commented that not only would districts

have to gure in the cost of paying more interest,

but now they will be forced to spend down

cash reserves that would have otherwise have

been earning interest. In other words, the states

payment shift will cause districts to owe more

and earn less in interest.

Former Prior Lakes superintendent Tom

Westerhaus commented In my 10+ years of

working with schools, it always feels like every

year you are being asked to do more with less.He went on to say that levies are no way to

fund schools because it requires district ofcials,

especially superintendents, to become enmeshed

in local politics in order to get the community

support necessary for a successful election.

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Table 1-1:desCribe your disTriCTs loCaTion

Table 1-2:disTriCT enrollmenT ComParison


resulTs

i. a rpt

There needs to be a strong nancial and philosophical commitment to education. Schools are being asked

for more and more with no resources to accomplish these additional tasks. Change can be good if it is done

in a positive and productive manner, not be continually dominate by political agendas.

A majority of the respondents said they represented

small, rural districts. Out of 202 respondents who

answered this question, with one skipping it, 69 percent

said they represent rural districts, 22 percent represent

suburban districts, 6 percent represent districts in

outstate regional centers, and 3.5 percent represent urban

districts (Table 1-1).

Describing the size of their districts, 44 percent said

their district had fewer than 1,000 students, 39 percent

said 1,000-5,000 students, 12 percent said 5,000-10,000

students, 4 percent said 10,000-20,000 students, and 2

percent said their district has more than 20,000 students

(Table 1-2).

The following graph gives a sense

of how the survey demographics

match up to Minnesota districts

overall. Proportions of respondents at

each school size are similar betweensurvey respondents and all districts.

Information about state public schools

comes from the Minnesota Department

of Education.

Most districts now have to rely on

levies to make ends meet. Eighty-four

percent of respondents said that their

districts are currently on operating

levy while 16% replied no.


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Table 1-3:

levy sTaTus among survey resPondenTs

Table 2-1:loCaTion of no-levy disTriCTs


The 84 percent of respondents with

a levy were asked if they ran a levy

question in 2010 and whether that

question passed or failed. (Table 1-3) Of

districts that did run a question in 2010,

25 districts won the levy question and

18 districts lost the levy question. Therewere 126 districts under levy that did not

run an election in 2010.

These proportions correspond with the

data about Minnesota schools overall.

In 2010, only 10 percent of Minnesota

districts had no operating levy. Sixty-six

percent of districts did have an operating

levy, but didnt run an election in 2010.

Thirteen percent of districts ran a levy

election and won, while 11 percent ran a

levy election and lost.

ii. n opt l

We cannot continue to do more or even the same with less!

Of the districts responding to MN2020s survey with no current operating levy, 30 percent expect to

put a levy question on the ballot within the next three years. An overwhelming 71 percent of those

respondents were in rural areas. Sixteen percent identied

themselves as suburban, and 7 percent each identied asoutstate regional centers and urban districts (Table 2-1).

By enrollment, the numbers break down as follows:

9 Fewer than 1,000 students 58 percent

9 1,000-5,000 students 39 percent

9 5,000 and 10,000 students 3 percent

9 There were no respondents in other size

categories.

Nearly half of these districts, 42 percent, face declining enrollment. However, 23 percent reported

growing enrollment, with steady enrollment at 35 percent of districts.

When asked why their school districts did not have a levy, 69 percent said that their community

wouldnt support one. A quarter of districts without levies said they didnt need one because of

stable nances, and in six percent of districts school boards would not approve one (Table 2-8).


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Table 3-1:solid finanCial ground in 2011-2012


iii. n ect 2010

If local taxpayers dont support school referendum efforts, funding gaps will continue to widen.

Consistent with other results, nearly 70 percent of responding rural schools didnt have a 2010 levy

election. Almost quarter were in suburbs, with 6.3 percent in outstate regional centers, and about

one percent in urban areas.

They represent mostly smaller districts:

9 Fewer than 1,000 students 40.5%

9 1,000-5,000 students 38.9%

9 5,000-10,000 students 15.9%

9 10,000-20,000 students 3.4%

9 Over 20,000 students 1.6%

Districts without a question this year will have to ask for money again soon. Twenty four

respondents replied that they anticipated their school board would place a levy question onthe ballot in 2011, but when asked if they anticipate

another levy within the next three years, the number

of respondents jumped to 80. More than 30 percent

of superintendents queried in this section, or 35

respondents, replied that they felt their district should

have had a levy question on the ballot in 2010.

About three-quarters (72.2%) of respondents said their

districts were on solid nancial footing this year, but

that number drops to 35.5 percent when asked aboutnext year. (Table 3-1)

iv. W 2010 ect

Without the operating levy, we would really be sunk.

Operating levies are increasingly important to many school budgets. In 2007, responding

superintendents who had just passed a levy reported, on average, nine percent of their districts

budget came from levies. In the 2011 survey, the average jumped to 11.5 percent. When asked to

anticipate the following year, 2011 respondents predicted that an average of 13.2 percent of the

operating budget will come from levies.

Even levy increases arent enough to outpace declining state funds. When asked if their district

was on solid nancial ground this year, 65.2% replied yes, in light of the recent levy increase. When

asked about next year, three-quarters said their district would not be on solid nancial ground,

even with the new levy funds. The decrease of funding from the state pulls the rug out from under

districts feet.


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The reality of the new normal can be seen comparing these results

to the 2007 results. In 2007, districts who won a levy reported more

nancial stability after the levy election, not less. In 2010, districts

felt less stable nancially regardless of whether they won a levy or

not, mostly likely due to the dramatic state funding cuts.

Districts who won their 2010 levy elections were mostly small andrural. Geographically, 72 percent of respondents in this section were

rural, 16 percent suburban, 8 percent urban, and 4 percent outstate

regional centers.

v. lt 2010 ect

We have reduced and cut down to minimal levels of teaching staff and administration. We still offer some

electives but are afraid of losing those in the near future.

Seventeen respondents reported that they lost their 2010 levy election.

Districts that lost levy elections in 2010 now face grim nancial problems. Of these schools, an

average of 13.4 percent of their operating budget comes from previous levies. This means that

almost 13 percent of their budget depends on the wax and wane of popular support not related to

the needs of students.

Most of these districts will have to lay off teachers to make up for

budget shortfalls. As shown in the chart below, the number of teachers

to be laid off varies by district.

Every one of these districts reported that they anticipate their school

board will place another levy question on the next ballot. Althoughlevy questions are difcult and often contentious ways to raise money,

schools cant afford to not pursue them.

Understandably, these districts reported their nancial outlook was dire, with 64.7 percent saying

their district was not on solid nancial ground this year, and 76.5 percent with a negative nancial

outlook for the following year.

These districts break down as follows:

9 72% rural

9 7% outstate regional centers,

9 22% suburban.

When asked to describe the size of their district, 39% had districts of less than 1,000 students, 56%

have 1,000 to 5,000 students, and 6% have between 5,000 and 10,000 students.

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Ct u l84.2%

Table 6-1:rural sChools: levy sTaTus


vi. r c

If we do not get an increase in state funding soon, we will be in serious nancial trouble. We cannot afford

to make cuts without seriously harming our students education, but without funding increases, we will

have to.

Out of Minnesotas rural school districts 139 responded

to our survey. Of those, 61.9% said their enrollment wasfewer than 1,000, and the other 38.1% said they had

between 1,000 and 5,000 students.

Of rural districts responding to the survey, 84.2 percent

are currently under levy. Of those schools, 73.5 percent

did not run an election in 2010.

More than 92 percent of rural districts said that the

current funding model is bad for schools, with almost 70

percent responding that the state should fund all K-12

education.

When asked about the effect the current funding model has had on the quality of their schools since

2003, 53.5 percent said that it has made schools worse, 42.5 percent said quality has stayed about the

same, and only 3.7 percent said it has improved. When asked what would happen to the quality of

education in Minnesota if the governor and state legislators do not change the state aid/property

tax model, 80.3 percent said it would make education worse. About 18 percent said it would

probably stay the same and 1.6 percent said it would get better.

Of the districts that have a levy but didnt run an election in 2010, 24 percent anticipate the school

board will run a levy in the next year, but that number jumps up to 68 percent when asked if theyanticipate another levy in the next three years. Seventy percent of the districts not asking a levy

question this year said their district is currently on solid nancial footing, but that number drops

almost by halfto 39 percentwhen asked about next year s nancial stability.

Of the districts that ran a 2010 levy election and lost, 100% said they anticipate their school board

will put another question on the ballot in 2011. 67% said that their school enrollment was declining.

73% cited declining school-age population as a cause; other major reasons given were aging of the

community and open enrollment. These districts will have to cut an average of 2 teachers as a result

of the failed levy. 75% said the district will not be on solid nancial ground next year.

Even rural districts that won a 2010 levy are feeling the crunch from decreased state funding. 63%

said their district is on solid nancial footing this year, but that number drops to 23% when asked

about next year. Put another way, 77% expect unstable nancial ground in the year ahead.


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ConClusions

The foundation aid formula needs to be adjusted to provide better equity, accessibility, and stability to the

entire funding process. The responsibility for providing the base educational program rests with the state

government (by state constitution) and it needs to be consistent across the State of Minnesota.

Inadequate funding that arrives late has left Minnesotasuperintendents with unstable and insufcient nancial

resource to educate our students. As Minnesota 2020s 2011

superintendents survey shows, frustration and scal instability

is growing among school community leaders.

In response to double-digit, ination adjusted declines in state

per-pupil funding, school districts have cut staff, extracurricular

activities, and educational programs and have modied school

transportation routes, shifting more of the cost onto parents. In

an effort to keep reductions from slamming the classroom, superintendents have gone to voters for

school levy referenda in at least 90 percent of Minnesota districts.

Equity for students shouldnt be based on zip code and who can or cant pass a referendum, one rural

superintendent responded in the MN2020 questionnaire.

Eighty percent, 143 superintendents, answered that without changes to the current state aid/

property tax system, the quality of education will continue to degrade. A superintendent from an

outstate regional center claried the groups response:

The quality of education is the same due to the hard work of staff. How long can we ask staff to work

harder with frozen salaries and continued negative comments from outside forces? We cut administration,

teachers, support staff and still offer a quality education for students, but how long can this last?

It has lasted too long already. Every biennium, policymakers say they will hold schools harmless

yet, by FY 2013, real per-pupil state aid to schools will have declined by 12.8 percent since FY 2003.

The time is overdue for leaders who will not only champion public education, but back up their

words by supporting a progressive tax system that ensures the most fortunate Minnesotans pay

their fair share.

Minnesotas public schools, once our state pride, now function under a

new normal where education cuts, staff layoffs and higher property

taxes are routine.

In a time when were asking schools to increase quality and prepare our

students for a 21st century workforce, conservative policy dictates that

we retreat on our obligation to properly fund this investment.

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Rather thanhaving to

defend

thisprogramor that,

superintendents nowhave to defend the

entire purpose of publiceducation itself.


As those at the top of the education community report in our survey, schools function better when

class sizes are smaller, students can get assistance from nurses, social workers, and guidance

counselors, and teachers are well-supported.

Superintendents are understandably frustrated and discouraged. Rather than having to defend this

program or that, they now have to defend the entire purpose of public education itself.

Superintendents understand the full picture of public education, from funding mechanisms to

classroom practice, and thus are in the best position from which to inform legislators about what

schools need. The question now is: Who is listening? Who are the lawmakers willing to act on the

expertise of experienced education leaders? Who is willing to stand up for Minnesotas future?


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aPPendix

mt

In April 2011, Minnesota 2020 sent out a questionnaire to Minnesota school superintendents. This

was the same survey MN2020 sent in 2007, with minor date changes. It was created by MN2020

staff using the online service SurveyMonkey.

The Minnesota Association of School Administrators (MASA) delivered the survey to

approximately 350 superintendents via its email list on behalf of MN2020. All results were reported

directly to Minnesota 2020.

The email contained a link to the online questionnaire, and could not be accessed any other way.

The Survey was sent April 1, 2011 and the nal survey was completed May17, 2011. In all, MN2020

received 203 responses to the survey, though it is important to note that not every respondent

answered every question, because some sections were not applicable to certain respondents.

In exchange for their honest opinion, superintendents were guaranteed anonymity. For this reason,

demographic information is limited and self-described.

The survey began with a section of general questions, after which respondents were directed to one

of four sections: No Operating Levy, No Election in 2010, Lost 2010 Election, and Won 2010 Election.

Once directed, respondents were not able to access the other sections of the survey. All questions

were single response, with the exception of one free-response question at the end.


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Minnesota 2020 is a progressive, non-partisan think tank, focused on what really matters.

2324 University Avenue West, Suite 204, Saint Paul, MN 55114

www.mn2020.org

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