Why don’t Minnesota schools ever seem to have enough money? We asked House education-committee chair Jim Davnie how we got here and how to fix it.

During a three-week strike in March, Minneapolis educators and their district bosses agreed on at least one thing: Their schools need more funding. 

On the second day of the strike, educators took their cause to the State Capitol, calling on the legislature to spend some of the state’s historic $9.25 billion budget surplus on education.

Educators charged that the state has been underfunding education for decades; that spending has not kept pace with inflation; and that the state has failed to meet its obligations to pay for special education and English-language services. The result: Public schools perennially find themselves with yawning budget shortfalls, leaving districts at a deficit.

The state and federal governments require school districts to provide special education and English-language services, which can be costly. Yet no level of government has taken responsibility for fully funding these education directives. That leaves school districts to dip into their general funds to cover the costs. And that, in turn, means less money for everything else in a school district’s budget.

In fiscal year 2020, Minnesota’s special-education cross-subsidy—that is, the amount districts have to pay out of pocket in the absence of dedicated state funding—totaled $735 million statewide. The English-language cross-subsidy rang in at $117 million.

Across the state, parents ask questions about funding more opportunities for their children: music and arts, sports, smaller class sizes, more Advanced Placement courses. And school staff, especially hourly workers like educational support professionals, want higher pay. But all of these spending priorities must come after districts meet their underfunded mandates for special education and English-language learning—leaving little budgetary flexibility.

The schools need money. The Minnesota legislature is the primary source of school funding. And the legislature has a record amount of money to spend.

So…where is the money? And why don’t schools ever seem to have enough of it?

Jim Davnie, a DFL legislator from south Minneapolis who heads the House Education Finance Committee, recently unveiled a bill to boost education spending by more than $1 billion annually for the next three years. Meanwhile, the Senate Republicans’ education bill totals $30 million. A final education bill is expected to pass in May—if the divided legislature can come to an agreement.

We asked Davnie about the DFL’s plans to fix education funding. The following conversation has been lightly edited for length and clarity.

The Minneapolis educator strike illuminated a lot of education funding issues that have been simmering for years. How did we get here?

To me, the Minneapolis strike was a matter of both sides saying the same thing in different ways. The teachers were saying we don’t have the resources to meet the needs of our students in our classrooms. And the school district was saying we don’t have the resources to meet the needs of our students in our classrooms. 

They were saying it in different ways and from different perspectives, but they were both right.

We’ve long had an attitude in Minnesota that education is important, that we are an education state. When Minnesota in decades past decided to invest in education, we stood out amongst other states across the country with the number of Fortune 500 companies that are headquartered here, with the average wages of working families here, with the percent of homeownership—all sorts of things that were rooted in an educated workforce. So we invested and we all benefited.

I tie it back to January 20, 1981. When Ronald Reagan was inaugurated president and said in his inauguration speech: government is not the solution to the problem, government is the problem. And we decided to stop investing.

I hear a lot of people talk about how this can be traced back to Tim Pawlenty.

Well, certainly, the recession that we experienced under Tim Pawlenty, his very restrained approach to K–12 education, and lack of increases in the funding formula at the time certainly is a part of it. But we can go back to 2011, when the Republicans were in charge of both houses of the legislature, and demanded that we settle the budget by withholding 40 percent of the funding for schools for the next two years. That didn’t help. 

I think it’s also appropriate to say one of the challenges we face in education funding is the increasingly diverse student body that we have. Schools are more diverse than the communities at large. I think for some voters and some legislators, investing then in those schools is less important to them. 

One of the investments that we [propose] this year is over the next four years, by 2026, we eliminate the English-language-learner cross-subsidy—the deficit in state spending on English-language learners. Twenty years ago that was an urban concern. Now, in Faribault Public Schools, 26 percent of their students are English-language learners. 

Communities across the state have become much more diverse. And yet I don’t see those greater Minnesota legislators stepping forward and saying, my schools are a lot more diverse and we have a big challenge with funding our English-language-learner services, we need to do something about that. 

Another big question for you. School funding comes from a lot of different sources. What's your elevator explanation for where the funding comes from?

Jesse Ventura made an honest attempt to have the state take on a significantly larger percentage of education funding in an attempt to move things off of [local] property taxes. We have backed away from that over time because of the unwillingness to invest in state funding.

In my mind, there's a legitimate conversation to have on what's the proper percentage of education funding that should come from the state and what's the proper percentage that should come from local property taxes.

And there's a couple of pieces there. In a lot of communities, they pass levy referendums for operating costs. Those are supposed to be for extras, for things that the state doesn't fund but the local community wants to invest in. 

What you often find, however, is that the local operating levy is very close to the deficits they have in special education and English-language-learner funding, because the state doesn't adequately fund the services that we require school districts to provide.

Minneapolis is an example of that, right?

Yep. But I talk to superintendents around the state on a fairly regular basis and they will all say in my district, our operating levy is just about the same as, particularly, our special-education cross-subsidy. So that's one piece to think about.

The other piece, to cycle back to is the legitimate conversation of how much should come from state revenue and how much should come from property taxes. The higher the percentage of school funding that comes from the state, the more vulnerable school districts are to state budget deficits and restrictions or cuts in funding. 

That goes back to that 2011 example, where the state decided to withhold 40 percent of school funding in order to balance its books. For some school districts, that meant they had to go out and borrow from banks in order to make payroll.

Property taxes don't have a deficit because most everybody pays their property taxes. The state's revenues, sales tax and income tax, are much more sensitive to the economy. And so I don't know what the proper balance is. Because I understand we don't want kids’ opportunities to be based on what school district they live in, and how much property tax the voters there are willing to pay. At the same time, we don't want schools to be vulnerable to the state budget and the broader economy.

So how does the education omnibus bill address the issues with school funding?

It reduces the special-education cross-subsidy by 55 percent, which is a big investment, and then eliminates the English-language-learner cross-subsidy. 

It makes a significant investment in student well-being and mental health. Every conversation I have with school leaders and teachers and parents is about kids’ mental health, and frankly staff’s mental health as well. 

So we provide funding for 1,100 new school-support personnel across the state. That’s school counselors, school social workers, school psychologists, school nurses, and chemical-dependency counselors. We leave it up to the school district to decide which of those categories they wish to meet their needs.

Then we also do something different in that we fund a “Grow Your Own” program for educational support professionals who wish to become licensed student-support personnel, or might want to become a school counselor. We start to create a structure to allow that to happen. 

Because one of the other issues I hear regularly from schools and communities across the state is the workforce issue in schools. That was certainly part of the Minneapolis strike. I was up in Pine City late last year, and the superintendents were complaining that they were losing education support professionals to McDonald's because McDonald's was paying more.

Yep, I heard that in Minneapolis as well.

When you're paying $13–$14 an hour, and McDonald's is paying $15, $16, $17 an hour, that difference is enough to get people to jump jobs. Don’t blame ’em. So providing opportunities for folks to have professional growth, to have a career path, hopefully is a benefit that is also attractive for folks.

And then outside of the K–12 bill, the House DFL is taking a strong position that education-support personnel, bus drivers, should and must be eligible for unemployment insurance.

That's not in the education bill, but that's something the House DFL is proposing this session? Which bill is that in?

That would be in our unemployment insurance bill. Representative Mohamud Noor is the chief author.

So the bill closes the English-language cross-subsidy. The special-education cross-subsidy is larger. Why doesn’t the bill close that cross-subsidy altogether?

It's a matter of balancing the different targets that we had. We could not touch the English-language-learner cross-subsidy, put all of that [proposed] money into the special-education cross-subsidy, and still not close it. 

The other thing to remember with special education is that when the federal government passed IDEA—the Individuals with Disabilities Education Act, the special-education mandate—they promised to pay 40 percent of the additional cost of educating students with special needs. They're not doing that. So we're still hoping the federal government steps in. There have been proposals, this will shock you, bollixed up in the U.S. Senate.

Ah, shocking indeed.

That would have increased the federal investment in special education. So the way I talk about our proposal this year is, the bills are coming due. We haven't been paying our bills. The state should pay its bills. And I think the federal government should, too. 

How would you define fully funding schools, and what would it take to get there?

I think it's difficult to put a definition on that. I think a strong start towards that is paying for the mandatory services that we direct schools to provide, and are also the right thing to provide. 

Educational-support-professional pay has been a big issue in Minneapolis and St. Paul, and it's not limited to those cities. It sounds like unemployment insurance is a way to help boost that pay. Are there other mechanisms to boost ESP pay in the education bill?

There are not any specific initiatives in the K–12 bill to fund educational-support-professional pay. But obviously, if schools have more of the revenue they need to provide the services that they're required to provide, there's more money available for ESPs to negotiate for.

So by reducing and eliminating these cross-subsidies—providing more funds for special-education and English-language services—that opens up more opportunities for flexibility in school budgets.

Absolutely. You know, we've funded school districts at a level that allows them to keep their doors open. What we haven't done is provide them the resources where they can innovate, and where students can be assured that the programs that they rely on and the staff they have relationships with will be there again next year. That's what we should change.

The Senate Republicans, who hold the majority, seem to think that the schools don't need any more money, except for literacy training. What's your response to that, and how do you find compromise?

Finding compromise is going to be interesting. What I hope I'm seeing from the Senate is a focus on greater student achievement. That's a good thing. We can agree on that. I think the conversation we'll have to have is that the investments they've identified are necessary, but not sufficient to get to that goal.

The Senate Republicans hear the same thing from their districts and their voters that we do. We want to invest in our children. This is the proven path for Minnesota to thrive. I occasionally have painful conversations with moms, who talk about living in the same school district they grew up in and seeing that their children have less opportunity in those same schools than they had when they were in the schools, and that their younger children have less opportunities than their older children did—those GOP senators are hearing the same thing. 

It’s just whether they choose to listen deeply or not, and do something about it.

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