In the state of Minnesota, school funding, and the allowed use of those funds, can be described as one word: complex. This article is a brief overview of how Tri-City United is funded and how those funds can be directed.

The primary source of funding for K-12 education in Minnesota is from the State, ultimately derived from state collected income and sales taxes. For TCU, the state provides 85% of the funding for the General Fund, followed by the local levy (locally collected taxes) (10%), federal funds (4%), with all other sources making up the remaining 1%.

Most of the state funding is designated as General Education Aid and funds the basics of K-12 education — critical elements such as teacher and support staff compensation, student transportation, and curriculum materials and technology. General Education Aid is formula driven, with three key inputs: (1) student enrollment, (2) a general education basic formula allowance set biennially by the State Legislature, and (3) local operating levy.

While the general education basic formula was increased 2% for the 2019-20 (current) school year and is set to increase 2% for the 2020-21 school year, this vital source of school funding has not kept pace with inflation. The organization Schools for Equity in Education has calculated a $1,367 per pupil gap between the 19-20 actual formula allowance and an inflation-adjusted formula allowance. For TCU the impact of this is enormous, equating to a $2.7MM gap between funding and inflationary costs in the 19-20 school year alone.

There are other categories in the General Fund. These ‘restricted revenue’ categories are often formula-driven and the use of funds is designated for specific purposes as set forth in state statutes, such as long-term facility maintenance. Our Food Service and Community Education departments are both run from distinct Funds. They are also self-supporting, meaning they must generate enough revenue to support their expenditures.

Of particular interest in recent years is the Construction Fund, with the successful passage of the 2018 school building bond referendum. Yet another distinct fund within the larger TCU finance umbrella, the construction fund records the revenue from the sale of the bond and the related construction expenditures. This money is restricted to only pay for construction and cannot be used to operate the expanded and improved facilities. The funding provided by the 2018 school referendum has done amazing things at each of our TCU educational sites.

Repayment of the 2018 building bond, and other existing school debt, is recorded in the Debt Service Fund. Revenue to pay the district’s debt service is almost completely voter-approved and thus funded almost exclusively by the local levy, along with some state aid.

School finance is like a puzzle. While the sources are few, the calculations can be incredibly complex. The use of school funds, and navigating the restrictive structure mandated by state statutes, is no less of a challenge. While confronted daily with many competing interests, we use our District’s core vision as a guide and, with a genuine commitment in what is best for students, families, staff, and communities, we do our best to strike a balance. The foundation for all that we do at TCU is community support.

Thank you for your support in the past that has brought us to the positive educational opportunities and environment our students experience today and thank you for your continued support as we move forward.

Jean Kopp is Tri-City United School District’s director of business services. Reach her at jkopp@tcu2905.us or 507-364-8413.

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