A survey updated this week shows members of the Association of Metropolitan School Districts (AMSD) now face a combined budget shortfall of more than $240 million for the 2022-23 school year. The survey asked districts to project their 2022-23 school year funding shortfalls, assuming no additional funding is provided in the 2022 legislative session.
Significant factors contributing to the projected shortfalls are the chronic underfunding of the special education and English learner programs and the failure of the general education formula to keep pace with inflation over the last two decades. Specifically:
Special education is under-funded by $780 million in the current fiscal year. That means that, on average, Minnesota school districts are diverting $824 per pupil from their general fund to cover the shortfall.
Similarly, the English learner program is under-funded by more than $146 million in the current school year. Here again, school districts are covering this funding gap with funds meant for general classroom instruction.
As school districts are forced to use general fund revenue to cover the shortfalls in the important special education and English learner programs, the general education formula has fallen significantly behind inflation since 2003. In fact, the formula would be $798 per pupil higher if it had simply kept pace with inflation over that time span.
One-time federal funding has provided critical resources during the pandemic to address some of these challenges — including technology, transportation costs, personal protective equipment, school nutrition programs, COVID testing and more — but this funding does not continue into the future, creating what has been described as a “fiscal cliff” for school districts. The survey is showing what that cliff looks like.
The good news is that the Governor and Legislators can address the shortfalls facing school districts and mitigate looming layoffs and programs cuts. The Office of Minnesota Management and Budget recently released the February State Budget and Economic Forecast projecting a record $9.253 billion surplus.
“AMSD is calling on the Governor and Legislators to stabilize Minnesota’s education funding system by fully funding the special education and English learner programs and indexing the formula to inflation,” said AMSD Chair Kelsey Dawson Walton, a member of the Osseo Area Schools Board.
“The historic budget surplus offers state policymakers the opportunity to help our students recover from the pandemic and address the budget challenges facing our school districts,” said Scott Croonquist, AMSD’s executive director.