Divided Minnesota Legislature faces spending chasm on schools

Parents and school districts across Minnesota remain in the dark about what level of state school funding they will receive between two wildly divergent spending proposals emerging from the DFL-led House and the Republican-controlled Senate — with scarcely two weeks left in the legislative session.

Republicans are calling for fiscal restraint in the largest part of the state budget in order to prevent a tax increase, while Democrats and many school districts say they fear that the latest education budget passed on a near party-line vote in the GOP-controlled Senate would lead to staff cuts and bigger class sizes.

"The Senate budget will be crippling," said David Law, superintendent of the Anoka-Hennepin School District, the state's largest.

Senate Republicans in the nation's only divided Legislature counter that their budget increases spending 5% from the current biennium to the next, and that the Democrats' House budget requires tax increases that would hurt Minnesota families and businesses.

"Everything that we do affects the person that actually has to pay [for] it," said Sen. Paul Gazelka, the Republican majority leader in the upper chamber. "That's the person I'm going to pay attention to."

The difference between the two school spending plans is about $700 million, making it one of the most complex negotiating puzzles that legislative leaders and Democratic Gov. Tim Walz will have to solve as they try to finish a two-year budget by a May 20 deadline for the Legislature to finish work for the year.

Also hanging in the balance are state commitments to special education funding, school safety and mental health grants, tax credits for private schools, and policy decisions on teacher licensing and sex education.

The two sides are betting their competing messages will win over Minnesota voters, who have historically been strong supporters of school funding but also pay higher-than-average income taxes. The sharp increase in the school spending favored by Walz and House Democrats fits into a larger DFL budget picture that would increase the gas tax, extend an expiring tax on health care providers and raise taxes on corporations.

Republicans say that is unaffordable.

"This state cannot endure that kind of taxation and spending and hope to succeed and grow," said state Sen. Roger Chamberlain, R-Lino Lakes, chairman of the Senate Taxes Committee.

Meanwhile, school districts and educators watch anxiously. They fear a smaller-than-expected increase will get swamped by their own contractual obligations to teacher unions, sharp increases in health care costs and a rise in students with special needs.

"I'm very nervous," said Denise Specht, president of the influential teachers union Education Minnesota. "The money that they're bringing to the table does not even come close to funding the needs of our students."

The vast gulf — and uncertainty — are a reflection of the divergent spending plans passed by both chambers over the past two weeks. The $20.5 billion education budget House Democrats approved in late April increases current spending by about $1.6 billion over the next two years, a 9% increase. The Republican Senate, meanwhile, moved to boost the schools budget by about $900 million, an increase of roughly 5%.

The key issue is how much in per-pupil spending the state should direct to districts. House Democrats and Walz proposed increasing the per-pupil amount by 3% in 2020 and another 2% in 2021. The Senate plan bumps the spending by a half-percent each year.

School districts raising alarms about the GOP plans have focused on the specter of fewer teachers in classrooms. One survey by the Association of Metropolitan School Districts found that even a 1% increase will cause a $160 million budget shortfall at metro-region schools over the next two years. North St. Paul-Maplewood-Oakdale Superintendent Christine Osorio said such cuts would likely lead the district to falter in its successful efforts to close the achievement gap among kindergartners.

"We would see devastating cuts to staffing, professional development resources and resources that help us with our struggling learners," Osorio said.

Republicans in the House have argued that the DFL proposal unfairly widens the funding gap between Greater Minnesota and metro-area schools. Yet rural districts say they, too, are worried about the effects of the Senate's funding proposal.

"Rural schools rely on state aid to an even greater extent than metro schools," said Fred Nolan, executive director of the Minnesota Rural Education Association. Because of lower property values and broad anti-tax sentiment, rural school districts struggle to pass property tax increases to support schools. While every metro school district passed operating levy increases in November, just 42% of rural districts passed theirs.

Legislators on both sides acknowledge that the current spending figures are essentially opening overtures. Lawmakers are likely to land somewhere in the middle after budget talks.

"History has shown that the per-pupil funding goes up as we get into negotiations, and that doesn't matter if it's a Republican- or a Democrat-controlled body," said Republican Sen. Carla Nelson, chief author of the upper chamber's education budget. "Most of us realize that per-pupil funding is the gold standard of education funding. It affects every school district equally, regardless of ZIP code."

Another sticking point is whether to help school districts cover the rising cost of special education. An increase in the number of students who need support combined with a federal funding shortfall has led the state's schools to pick up a bigger portion of the tab. Districts say that shift forces them to divert money from other programs that benefit the general student population.

Democrats want to direct hundreds of millions more for special education and enact paperwork changes meant to lessen the administrative burden. The Senate GOP bill does not call for additional funding.

The competing plans are peppered with policy language on everything from prekindergarten programs to school safety. The DFL plan requires schools to teach comprehensive sexual education to elementary students, an idea strenuously opposed by House Republicans. Republicans are pushing proposals to direct funding and tax credits for scholarships for students to attend private schools as early as prekindergarten. Those ideas, a centerpiece of the national school-choice debate, face fierce opposition from the state teachers union, an important DFL ally.

The state's new teacher-licensure system is also a point of contention. Democrats in the House, backed by the union, want to repeal a two-year-old state provision that allows educators to achieve full licensed status without going through the state's formal teacher-training process.

The Senate GOP bill keeps the current licensing flexibility in place. Supporters of the new licensing option say it helps the state improve diversity in its teacher workforce.

The heavy lifting to bridge the many gaps will happen in the weeks ahead.

Torey Van Oot • 651-925-5049 J. Patrick Coolican • 651-925-5042