Action of the School Board Action of the School Board 04/27/15 | Page 3

Finance

Legislative update presented

School Board Chair Tom Heidemann reviewed work at the legislature on school funding
for the next biennium.
He indicated that he had written a letter to legislators that presented information on how
current proposals would impact Anoka-Hennepin. All three proposals – that of the governor, the House and the Senate – would result in deficits in Anoka-Hennepin ranging from
$5 to $8 million by the end of next year and another $14 to $17 million by the end of the
following year. Large spending cuts would be needed to balance the budget.
The current proposals increase the formula by 1 percent. Doubling that to 2 percent would
reduce projected deficits to around $2.5 million next year and a bit over $10 million the following year. A 3 percent increase would nearly balance the budget next year and drop the
deficit the following year to about $5 million.
He noted that the governor is spending a significant portion of the state’s nearly $2 billion
surplus on education, but his proposal puts a large share of new money for education into
preschool programs for four-year-olds. Heidemann said school districts really need more
money on what’s known as the “basic formula,” which pays for the basic costs of educating
K-12 students – teachers, textbooks, transportation and more.
He pointed out that in Anoka-Hennepin, the board controls approximately 55 percent of
education dollars not mandated by state and federal law. Most of it includes teachers and
class sizes.
Without sufficient funding from the state, the other option school districts have is to increase the referendum levy. If approved, an increase in the referendum levy of $15.4 million
annually would cost owners of homes with market values of $150,000 to $250,000 somewhere between $150 and $250 more in property taxes each year. The board has opposed
using local levy to fund basic programs because of the tax disparity caused by the district’s
low commercial and industrial property wealth. It has advocated for more tax relief for
homeowners to help reduce the impact on homeowners and businesses.
Heidemann explained that without any increases to cover inflation, school funding would
increase by $900 million due largely to new programs added during the last funding session. A big portion of that will come from the increase in the current biennium to pay for
all-day kindergarten, which began this year. In addition, there were increases in the special
education formula.
Board members and the superintendent have been communicating closely with state leaders on what the district needs to continue current class sizes and programs. “We believe it’s
essential to fund the programs we have before adding new programs and we will continue
to work toward that end,” said Heidemann.
Steve Kerr, executive director of community and governmental relations, said the House
had approved its education bill Saturday and the Senate is set to hear its bill on Wednesday. They will then identify conferees and move into conference committees to iron out
differences between the two. He noted, however, that leaders of both bodies must agree on
financial parameters before conference committees can resolve their work.

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ACTION

At this time both the House and Senate have the compensatory aid pilot in their bills. Compensatory aid provides additional money to meet the greater educational needs of students
in poverty. Heidemann noted that the pilot recognizes the flaw in the compensatory aid
formula. It favors districts with small schools that have large concentrations of students
in poverty. Even though Anoka-Hennepin has many students in poverty, it operates large
schools so the concentration of those students isn’t as great. The pilot funding sunsets at the
end of this year, unless specifically included in the education bill signed by the governor.