To reform school funding, start with special education

Many of us are thinking about young people in Minneapolis as they resume learning and reconnect with peers, teachers and principals after the disruptions of a three-week strike and two-year pandemic.

As the district transitions to new leadership, it will be important to focus on this: Minnesota's inequitable school funding system puts at risk the outcomes and sustainability of districts like Minneapolis, St. Paul, Duluth and St. Cloud.

Because these districts educate thousands of young people, their challenges threaten to undermine Minnesota's prosperity.

Educators and finance experts said our funding system needed a fix years ago.

Shortly after former Mayor R.T. Rybak joined the Minneapolis Foundation in 2016, we learned of a project led by the Association of Metropolitan School Districts (AMSD). Called Reimagine Minnesota, it sought to imagine a new model for funding public schools. In 2019, our foundation partnered with AMSD, the University of Minnesota College of Education and Human Development, and other philanthropies to produce a report that expanded on key themes around school funding.

Minnesota's school funding system is based primarily on enrollment, which continues to decline statewide. But targeted funding addresses differential cost structures and student needs (English Language Learners, special education, etc.). However, our 2019 report noted the funding system doesn't do enough to advance equity because it ignores the reality of higher costs for schools based on their location.

For example, the system doesn't account for districts like Minneapolis facing higher labor costs or greater Minnesota districts facing higher transportation costs.

The labor cost challenge was clear as we heard about Minneapolis's education support professionals (ESPs). Their previous starting annual wage of about $24,000 is below Minneapolis' average per capita income of about $40,000. Their new starting wages of up to $23.91 per hour in their new contract are an important step toward recognizing how essential ESPs are.

Where should we start making impactful funding changes for Minneapolis and districts in greater Minnesota?

Let's listen to educators and school finance experts across Minnesota and reform special education funding. It's hindered districts in the metro area and greater Minnesota for decades, as told by an avalanche of budget documents, state reports and interviews with school finance experts like Amy Skaalerud of St. Cloud.

Skaalerud notes her district shifted $9.8 million from its general fund to cover special education in 2019. That number later grew to $11 million, according to a state report to the Legislature. The report said the Duluth, Minneapolis and St. Paul districts shifted $7.4 million, $50 million and $43 million, respectively, for special education. Shifting general fund resources to cover special education costs, called a cross-subsidy, is not sustainable. It forces school districts to make other cuts that impact students, teachers, ESPs, principals and families, which exacerbates inequity.

This trend is also alarming because special education services are essential to meet all young people's needs and required under federal law.

We have the resources to provide relief.

Gov. Tim Walz has proposed reducing cross-subsidies. Some DFL lawmakers have proposed spending nearly $2 billion to fully fund special education. Budget negotiations this spring must find a compromise that addresses special education needs.

Another bipartisan bill would create a task force to study funding models, especially in areas where special education intersects with school choice.

The cost of inaction is already visible. Teachers are leaving, students feel unheard and principals are burned out. Our foundation spearheaded a new statewide principals survey that found concern about state funding and mental health — among students and educators.

There are many important debates about school funding. I urge lawmakers to start with fixing special education funding because it would help districts avoid budget cuts in other areas.

Patrice Relerford is senior director of impact and collective giving at the Minneapolis Foundation and a former Star Tribune education reporter.