District to hold referendum in November

Minneapolis Public Schools will hold a two-question, $30 million referendum this November, after the Board of Education unanimously approved placing it on the ballot last month.

The district is asking Minneapolis voters to increase its operating levy by about $18 million annually and to establish a capital projects, or technology, levy. The technology levy would raise approximately $12 million for the maintenance of and upgrades to district technology systems, freeing $12 million in general-operating funds. The district is not proposing any new technology-based initiatives.

“We are grateful for the past generous support of Minneapolis taxpayers,” Superintendent Ed Graff said in a statement last month. “This referendum is just one way MPS is working to ensure we have the resources available to invest in the programs our students need and deserve.”

The ask comes as costs outpace revenue in MPS and in many districts across Minnesota. At least 59 of Minnesota’s 327 school districts, including MPS, projected budget shortfalls for 2018-19, according to data collected by the Association of Metropolitan School Districts and the Minnesota Rural Education Association. Twenty-six metro-area school districts alone projected a combined 2018-19 shortfall of over $108 million, according to the metropolitan districts’ association.

Education leaders note that state funding, the largest source of operating revenue for schools, has not kept up with the pace of inflation since the early 2000s. They also note that districts are increasingly paying for special-education and English-learner expenses with operating revenue, as those costs rise and state and federal funding do not keep up.

Additionally, some urban districts, including Minneapolis and St. Paul, have seen enrollment declines over the past 15-plus years, contrib- uting to the losses in revenue.

MPS leaders say this year’s referendum is one part of their strategy to create a solid financial foundation for the district. They also made budget cuts this spring to address a projected $33 million shortfall for 2018-19 and are reviewing the district’s programming and services before crafting the 2019-20 budget.

In addition, the district is working at the state Legislature to increase revenues for special-education and English-learner services.

“This will give us an opportunity to reach more families,” School Board Vice Chair Siad Ali said of the referendum. Ali is serving as the board’s representative on the external committee working to pass the referendum, called the Committee for Better Schools.

“There are a lot of good things happening in Minneapolis Public Schools, but we need these resources to succeed,” Ali said. “This is about our future.”

Lagging funding

Statewide, total inflation-adjusted state aid per pupil is projected to dip by about 9 percent by 2019 when compared to 2003 levels, according to the North Star Policy Institute, a progressive think tank. Inflation-adjusted state aid for MPS is projected to dip over 20 percent per pupil, according to the institute.

The district has recouped some of those losses through an increase in its operating levy, which voters approved in 2008 and renewed in 2016. But the district’s inflation-adjusted per-pupil revenue is still projected to decrease by over $1,400 by 2019 compared to 2003, according to the institute.

MPS has also been significantly impacted by increasing special-education costs over the past 15 years, according to state Department of Education data. The district’s special-education expenditures rose more than 34 percent from 2002 to 2016, but its dedicated special-education revenues decreased nearly 5 percent. That’s forced it to dedicate more of its general state aid to special education, including over $53 million in fiscal year 2016.

Scott Croonquist, executive director and lobbyist for the Association of Metropolitan School Districts, noted the state and federal governments dictate special-education services, meaning school districts don’t really

have a say in which services they provide. He said the state and federal governments have cut back on children’s mental health services, meaning that some children now get those services in school.

Croonquist noted Congress established a goal of providing 40 percent of funding for special-education services when it passed the Individuals with Disabilities Education Act in the ’70s. But the government has never come close to meeting that goal, he said, leaving states and local school districts to cover what they can afford.

Minnesota also has a policy of “tuition billing,” meaning that MPS is responsible for paying for the unreimbursed special-education services of students who live in Minneapolis but open enroll or attend charter or private schools. The district spends $21 million annually to cover the services of these students.

School Board support

MPS states on its website it needs a solid financial foundation to maintain a healthy reserve fund, invest in its four priority areas
and ensure district growth and sustainability. The district says the new funding would help it ensure a consistent level of staffing, services and programming at all schools and support investments needed to improve student outcomes.

“If we don’t have a sustainable, structurally sound budget, MPS will have to make tough decisions, potentially impacting programming across the district,” it says.

Ali, the School Board vice chair, stressed that the board is “100 percent behind” the referendum. “Every step of the process has been unanimous,” he said.

The annual impact of the two questions would vary, depending on the type of property. It would be $224 on a residential homestead property worth $400,000, for example, though the district says many owners of homestead property would qualify for a tax refund.

Visit mpls.k12.mn.us/referendum to learn more about the referendum, see how it would impact your property taxes and view sample ballot questions.