A persistent shortage in special education funding from state and federal governments has left Faribault and Northfield school districts no choice but to make budget cuts.

The Northfield district plans to create teams covering several budget areas to identify across-the-board reductions needed for the 2021-22 school year. Officials will then present spending information and community recommendations.

In Faribault, officials will decide on needed reductions this spring. The biggest issue for the district has been the lack of outside funding for the special education cross-subsidy, forcing Faribault to transfer $4 million annually from the general fund for special education. Faribault has also been forced to transfer $1.2 million from the general fund for English language learning students. Faribault has faced a decrease of approximately 100 students every year because of declining kindergarten enrollment.

About 23% (834 students) of the district’s student body are English language learners, 16% (573) are considered special education. In Northfield, almost 15 percent (603) are special ed, 6.2% (252) are ELL.

In Northfield, the district has been intervening more with pre-K students who need special education. Although the district believes that approach has long-term benefits, it has resulted in additional expenses, further necessitating more funding from state and federal governments.

Northfield Superintendent Matt Hillmann said a lot of school districts from around the state will be forced to make multiple rounds of cuts due to the lack of funding.

Matt Hillmann mug

Hillmann

Northfield could avoid cuts if enrollment increases again following a slight decline or the Legislature makes a substantial investment in education.

Despite the challenges, Hillmann said Northfield is addressing budgetary issues from a strong position because of the community’s financial support.

State, federal government funding has been consistently insufficient

The state’s per-pupil basic formula has increased at the pace of inflation only five of the last 27 years. Hillmann noted schools would need a $2,500 revenue increase per student to have the same buying power they had in the early 1990s.

That lack of increase in state funding poses problems for school districts across the state. In Northfield, nearly 70% of its revenue comes from the Legislature.

Hillmann is aware of budget pressures at the Legislature that could stifle education funding, but he noted the state Constitution requires the state to fund a uniform system of public schools and roads.

“This is fundamentally a state financing issue,” he said.

Last year, the Legislature provided an additional $90 million to special education programs throughout the state. But even that hasn’t been enough to close the gap.

At the federal level, Congress pledged to cover 40% of special education costs in a 1970s law, but recent rates have only hovered around 7% to 9%. Placing the funding burden on local school districts while issuing more mandates has proved difficult. Funding special education is expensive; Hillmann said it costs $7,000 more per special education student.

“It clearly has not been a priority at the federal level or else they would have fixed this,” Hillmann said.

Because of insufficient outside funding, Northfield is forced to use $5.5 million of its general fund on special education — nearly 10% of the budget.

District 54 Rep. John Jasinski, R-Faribault, said he is still learning aspects of the education funding process and is open to ideas.

“It’s a complicated situation,” he said.

John Jasinski

Jasinski

One area Jasinski said could be evaluated is individual education plans (IEPs). IEPs are considered a legal document for students who need special education. He noted that program could be more generalized and down-classify courses special education students must take.

With the state’s $1.3 billion surplus, Jasinski said he does not support increasing taxes for education. Instead, he said the state needs to ensure it is efficiently spending money. He specifically mentioned the troubled Department of Human Services and the millions in overpayments it’s made.

District 20B Rep. Todd Lippert, DFL-Northfield, said last year’s budget that included $543 million in new education spending for the 2020-21 biennium was “a significant step.” However, he noted he hears from districts that there is still a significant ongoing need.

“We need to prioritize keeping our promise to our children so that whenever a child is entering a school building, wherever in the state, they have the opportunities they need to succeed,” he said.

In discussing the need for more education funding, Lippert spoke against the tax bill signed by the Trump administration, which includes a bevy of tax cuts.

“We weren’t asking what that costs as a society, so I get frustrated when we’re only talking about costs when meeting basic needs, like schools,” he said.

Lippert said a tax structure needs to be in place where the largest corporations are paying their “fair share,” which would open up funding for schools. He noted Sen. Tina Smith, DFL-Minnesota, told him the federal government has passed $13.6 billion for special education cross-subsidy funding.

Faribault Superintendent Todd Sesker noted the district could gain the authority to levy up to 50% of such costs if state law is changed. He said funding increases are politically difficult because they involve raising taxes, which would either come from sales or property.

“Please provide adequate funding for school districts and talk to the superintendent about what that means,” he said of what he would tell the state.

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