North Star’s new report, Minnesota Backslide: School Aid Cuts on the Horizon, documents the decline in real (i.e., inflation-adjusted) per pupil* state operating aid to Minnesota school districts since fiscal year (FY) 2003 and the corresponding increase in school property taxes. While the general impact of the aid loss is similar in most parts of the state, there is significant variation among districts in the magnitude of aid losses and property tax increases. A new table groups school districts in the state by legislative district so that readers can examine the impact upon school districts in their area.†
Nearly every school district saw a drop in real per pupil state operating aid during the period from FY 2003 to 2014. In constant FY 2019 dollars per pupil, these losses range from under $500 in districts such as Minnewaska (west central Minnesota) to over $3,000 in district such as Kingsland (southeast Minnesota). Thanks to aid increases funded largely with dollars generated by state tax increases enacted in 2013, per pupil aid increased significantly in most districts from FY 2014 to 2016. Nonetheless, 93.0% of all 330 Minnesota school districts receive less real per pupil aid today than they did in FY 2003. These districts account for over 95% of total student enrollment. In over three-quarters of all districts, the loss exceeds five percent of per pupil aid; in nearly half of all districts, the loss exceeds ten percent.
Another prominent trend is the increase in school property taxes. In over 97% of all school districts, real per pupil school property tax levies are higher today than in FY 2003. In most districts, the levy increase is large, as districts have used a combination of voter-approved property tax increases or board-authorized levy hikes to replace reductions in state aid. In three-quarters of all districts, per pupil levies more than doubled over this period. In over half of all districts, they more than tripled.
The large percentage increase in levies over this period is due in large part to the low level of per pupil levies in FY 2003. However, even if we examine the dollar amount of per pupil levies, the increases are still substantial. The average per pupil levy increase for all Minnesota school districts from FY 2003 to 2019 in constant FY 2019 dollars is $1,205. The median per pupil levy increase among all districts (i.e., the increase which divides the 330 districts into two equal halves, with half of all districts below the median and the other half above it) is $1,055. As noted above, these amounts are expressed in inflation-adjusted constant FY 2019 dollars; in dollars unadjusted for inflation, the average and median per pupil levy increases would be $1,583 and $1,247 respectively.
Under current law, nearly every school district in the state is expected to see a decline in real per pupil operating aid and total revenue from FY 2019 to 2021. This occurs because most components of state aid—including the basic general education per pupil formula allowance—are not routinely adjusted for inflation. To keep pace with inflation, the 2019 legislature will need to increase nominal per pupil state aid to school districts by approximately three percent from FY 2019 to 2020 and again from FY 2020 to 2021.
For the school district by legislative district table, click here
For the full North Star school finance report and appendices, click here
*Inflation-adjustments in this article—as well as in the legislative district table and the full North Star report—are based on the Implicit Price Deflator for State and Local Government Purchases, which is the appropriate index to use when adjusting state and local government revenues and expenditures for the effects of inflation, as explained in a 2016 North Star article. Per pupil amounts are based on adjusted average daily membership (AADM). All per pupil aid, levy, and revenue amounts in this article, the legislative district table, and the full North Star report are based on Minnesota Department of Education data.
†This table—based on information from the North Star report—summarizes the changes in per pupil state operating aids and levies in constant FY 2019 dollars for all Minnesota school districts grouped by House legislative district during five periods: from FY 2003 to 2014, from FY 2014 to 2016, from FY 2016 to 2019, from FY 2019 to 2021, and from FY 2003 to 2021. Legislative districts are listed in order of the House district number (01A, 01B, 02A, etc.), with school districts listed alphabetically within each House district. Some districts appear in this printout multiple times because they lie within multiple House districts. The number in parentheses after the school district name represents the portion of the 2010 census population of the school district that lies within the House legislative district. For more detailed information regarding each school district, see appendix C of the North Star school finance report.