By Kimberley Dunn Lewis, MSBA Associate Director of Government Relations
The first step to the 2024 legislative session took place with the 2023 Fall Advocacy Tour. Choosing from one of four virtual sessions, school board members learned more about grassroots advocacy and found out how fellow school board members from across Minnesota are impacted by various issues. One-third of the state’s school boards participated in the tour’s survey.
The word “Advocacy” is a commonly used, sometimes overused word, so it is worth taking a moment for some self-reflection and looking at what really is advocacy? The MSBA Government Relations team sees it as an organized action in support of an idea or cause. Taking it one step further, it is strong schools, strong boards, and strong state. Constituents (YOU) educating and sharing perspectives with elected officials. It means establishing ongoing and trusting relationships with those who influence state and federal policy.
Relationships and advocacy will be needed in the next session as many in the legislature and the public grapple with the question: “How can school districts be facing budget challenges and/or going out for referendums?” Legislators provided historic funding in 2023. We all need to start having the conversations now working to explain to stakeholders and constituents. The quick one-minute elevator response:
Historic Funding + Historic New Expectations + Historic number of Categorical + Inflation = Shortfall of Flexible Operating Revenue.
Important to note that this biennium year one we got 4% on the formula and in the second year only 2%. Even with that increase, we are still $1,356 short of inflation according to Ehlers Public Finance Advisors.
Some additional points to share that may ease some of the confusion:
- Yes, historic funding – of the $2.2 billion education budget ONLY around one-third was allocated to the general education formula, the most flexible and needed in terms of meeting the budgetary needs of our day-to-day operations.
- Half the funding went to committed funding streams or categorical spending. One big line item on the 2023 spreadsheet for “Other programs and grants” is $437 million. There were many good programs which we support but regardless, revenue cannot be used for day-to-day operating costs.
Moving forward, much will be the same, the DFL maintains the majority in all three branches of government – same leadership. Year two of the biennium, means a shorter session with a later start date of February 12, 2024. And typically, the second year of the biennium focuses on policy, not funding. You will hear it repeatedly from lawmakers that the budget was set last session. So, look at policy and other items that need to be fixed. Year two of the biennium needs a “fix.”
The questions we surveyed our school boards had a lot to do with the historic funding they received and what they are projecting. Just over 100 school boards participated in the survey. The first two questions asked dealt with the difference between projected general fund revenues and expenditures for the next two school years. Even with the historic funding, there are mixed results for the 2023-24 school year. Quite a few districts have revenues exceeding expenses or are positive before negotiations. And a few will be operating with a balanced budget. However, many are looking at deficit spending for the 2023-24 school year. The breakdown across Minnesota is 45% of the respondents are in a deficit, 32% have a positive balance – and of those with a positive balance, 84% have a balance of $1 million or less. Only 16% have over $1 million. The second question looked ahead to the 2024-25 school year and asked if there is no additional funding beyond the 2% to 3% inflationary increase, what are projections? Overall, despite the historic funding, and again, it was historic, districts are still having trouble making ends meet. For many it isn’t enough to keep up with inflation. Many respondents mentioned the numerous mandates that were passed into law this last session and the significant cost to implementing the new requirements. For example, the new unemployment costs and the new Earned Safe and Sick Time were mentioned multiple times as having a fiscal impact on districts.
Here are some additional survey questions and responses:
Question: Are you experiencing declining enrollment? If so, what do you attribute it to?
Answer: Statewide we are seeing a decline in student population – one reason is simply the decline in birthrates. Some districts are experiencing increases while others are declining. It’s really something distinct to district.
And it seems, since COVID, more families are seeking educational options other than their public school. There has been an increase in enrollment to online schools, charter schools, private schools.
And, in the past few years we have heard the legislature discuss vouchers for public school students. There is more discussion as well now in the public about taxpayer dollars following a student to some of these options. According to a recent Morris-Leatherman poll, about half of those surveyed support parents being able to choose to send their children to a private or parochial school instead of their local public school district and receive state funding for tuition and transportation.
Question: We heard a great deal about inflation during the 2023 legislative session. How is inflation impacting your district? How will the legislation that provides an automatic 2% to 3% inflationary increase impact your district next year?
Answer: An overwhelming number of you (93%) across the state have indicated that while the automatic inflationary increase will be helpful for planning, it won’t be adequate. Only 6% thought that the inflationary increase would be enough.
We have heard from districts that their costs are increasing. From healthcare to heating and utilities to cost of living increases. We are all seeing costs rise in our personal lives, it certainly is impacting districts.
Ehlers, which as many of you know does a great deal of finance consulting for schools, has said that had the allowance increased by the rate of inflation each year since 2003, the 2025 allowance per ADM would be $8,637. The difference between the FY25 formula allowance per ADM and the inflation adjusted formula allowance is $1,356 or 18.6%.
Question: What types of staffing issues is your district experiencing?
Answer: Overall, districts are still experiencing staffing shortages in several areas. Some of the areas with greater shortages are not surprising – special education teachers and paraprofessionals. School bus drivers are also still in demand. It will be interesting to see if the recent summer unemployment helps with recruiting and retaining these unlicensed positions such as bus drivers and paraprofessionals.
Question: What was the cost of unemployment for your non-licensed staff over the summer?
Answer: A total accounting of those who responded to our survey show on the low end (some only accounted for unemployment through June and others based their data over the summer) of over $10 million.
In addition to our survey results, there is some additional data you might find interesting. MASPA, the Minnesota Association of School Personnel Administrators, did a survey earlier this summer and received responses from approximately 75 districts. From May 28 through August 25 the survey respondents had a total of 5,680 claims. A question was asked about how much time went into processing the unemployment claims and they estimated it took staff over 2,200 hours to administer. They also looked at the difference in their UIMN bill from Quarter 2 2022 to 2023 and found a cost of $1,524,558 to the responding districts.
We understand that Minnesota Department of Education (MDE) will be completing a more thorough survey this fall. From what we have heard anecdotally as well, districts expect to have more claims next year as staff come to realize they can file for unemployment and those who committed to working this year might choose not to commit to working a summer program next year.
Question: What impact do you expect nonexclusionary discipline to have on your district? (Please be prepared to share anticipated challenges or progress relating to implementation of nonexclusionary discipline.)
Answer: 70% of the respondents surveyed expect a minimal impact to implementing nonexclusionary discipline.
We know that each school board must now adopt a written districtwide school discipline policy including written rules of conduct for students, minimum consequences for violations of the rules, and grounds and procedures for removal of a student from class. The policy must contain the discipline complaint procedure that any member of the school community may use to file a complaint regarding the application of discipline policies and seek corrective action.
Now, given that information, the next question is quite interesting.
Question: Of the new mandates, which is the most difficult to implement and why?
Answer: Many responses were submitted. Here is a list of the topics and frequency of listing.
- Nonexclusionary discipline was listed 30 times.
- Unemployment was listed 22 times.
- The sheer volume of mandates came third at 21 responses.
- The new time off benefits of Earned Safe and Sick and Paid Family Medical Leave were mentioned 15 times.
- The Read Act was called out 12 times.
- Eight districts indicated the elements of the new PELRA provisions were going to be difficult.
- And a couple each in the areas of menstrual products and Narcan not having enough funding, the mascots and new courses required.
Question: How is advocacy driven in your district?
Answer: Almost 80% of districts responding utilize MSBA’s legislative platform as their own and we encourage those of you who do not have a formal platform or a parent or Board group to do just that! The other 20% construct their own platform with a Board committee or community group. If you are thinking of starting a parent group, we are happy to discuss with you and share resources, including other districts who have parent or Board groups.
We are grateful for those who joined us for the Fall Advocacy Tour and look forward to seeing more of you next year. We really appreciate the time that the respondents took to complete the survey. Please feel free to reach out to the Government Relations team with any questions.