Who funds Minnesota public schools? back to top

• State of Minnesota: 70 percent of operating costs
• Local property taxes, fees, etc.: 24 percent
• Federal government: 6 percent

(House Research, 2004-05 data)

How much is spent on K-12 education? back to top

• Over the next two fiscal years (2006-2007), K-12 spending will total $12.6 billion, or 41 percent of all state general fund spending. (Minnesota Finance Department, October 2005)

How much has K-12 funding increased over the years? back to top

• From 1991 to 2005, district general fund revenue per student increased 17.8 percent after accounting for inflation, or about 1.3 percent per year (from $4,767 in 1991 to $7,915 in 2005). (Minnesota Finance Department)
• The funding picture is clouded by the fact that the 2001 Legislature took most general education funding off the property tax, making the state responsible for those revenues instead. School districts did not receive any more money as a result, but the cost to the state went up sharply, while the cost to local property taxpayers went down. 
• Growth in the per-pupil formula allowance – the basic unit of funding for school districts – has lagged behind the rate of inflation for the past decade, and there was no increase from 2003 to 2005. 

Why are education expenditures rising? back to top

• Special education was the fastest-growing major program between 2001 and 2005. Per-pupil spending on special education grew 33 percent in that time. The average cost per student receiving special education services was $11,900 in 2005. (Office of the State Auditor, 2005)
• Other “cost drivers” identified by the state auditor include employee benefits, primarily health insurance (30 percent increase over the four years). Total salary expenditures rose only at about the rate of inflation.

How are special education costs paid for? back to top

• The federal government has promised to pay 40 percent of the cost of special education, but in fact provides only 11.6 percent of the cost in Minnesota. (Education Minnesota analysis of data from Minnesota Department of Education)
• The state is responsible for the rest, but state funding does not cover the total cost, leaving school districts to subsidize special education from their regular education revenues. Districts spend an estimated $500 million annually from their general revenues to make up the shortfall. (Minnesota Department of Education funding update, August 2006)

Who pays for the costs of the No Child Left Behind Act? back to top

• Minnesota was projected to receive more than $200 million in federal funds annually to implement NCLB requirements, including $42 million of new money. (Office of the Legislative Auditor, 2004)
• However, the cost of administering new tests under the law and the costs of school choice, supplemental services and other penalties for schools that fail to make “Adequate Yearly Progress” could exceed the $42 million, leaving the state and districts to pay the rest. (Office of the Legislative Auditor)
• The Bush administration has consistently proposed, and Congress has approved, NCLB spending that falls far short of the maximum funding levels authorized in the law. (National Education Association) In the House education appropriations bill for fiscal 2007, the shortfall for Minnesota is $96 million for grants to local educational agencies under Title I-A of the law. For all NCLB Act programs, the shortfall is $104 million. (National Education Association)
• Compared to other states, Minnesota received the second smallest percentage increase in Title I funding from 2001 to 2007 (12.45 percent, far below the national average of 39.11 percent). Minnesota's Title I funding actually decreased in two of the six years, including the current year. (Education Minnesota analysis of U.S. Department of Education figures)

Where does Minnesota rank nationally in school funding? back to top

• 20th in the nation in current expenditures per student in fall enrollment, 2004-05 (NEA, Rankings & Estimates)
• 30th in per-pupil spending as a percentage of personal income (U.S. Census Bureau, 2004)

Where does the money go in Minnesota? back to top

• Statewide, 68 percent of total preK-12 operating expenditures go for regular, vocational and special education instruction and instructional support services, with an additional 3 percent spent on student activities and athletics. The remaining 29 percent pays for other necessary expenses, including buildings, pupil support services and operations and maintenance. (Figures from Office of the State Auditor, 2005)