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Osakis Voices: A closer look into education funding

Educational financing in Minnesota is very complicated. Every December, the Minnesota House of Representatives Fiscal Analysis Department publicizes an 82 page document titled "Financing Education In Minnesota." This large document breaks the following topics into specific categories and summarizes each one of them: General Education Program Revenue, K-12 Categorical Programs, Family and Early Childhood Categorical Programs, Property Taxes, and Finances.

Education is a topic that is debated at the local, regional, state, and federal levels, not to mention at the local "water cooler." No matter what side of the fence you are on regarding education, it is important to remember our future is our children. As a matter of fact, the following constitutional article of Minnesota dictates provisions for public schools throughout the state.

"The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state." — Minnesota Constitution, Article XIII, Section 1

There are many factors that go into revenue appropriations and tax implications in deciding how much a school will receive. The bottom line for schools is the more students a school district has, the more revenue they will receive. School boards may convert up to $300 per pupil of existing referendum authority to "board approved" authority. The board may retain this authority for up to five years, at which time the board must vote to reauthorize the referendum revenue authority. The Osakis School Board recently approved this at our August school board meeting.

Another form of revenue for school districts is local optional revenue (LOR). This LOR allows school districts to access up to $424 per adjusted pupil unit in board-approved revenue. The Osakis School Board approved an LOR amount of $300 at our August school board meeting.

The referendum revenue program has a three tier equalization aid formula; that is, the state pays in aid the difference between what is raised by a local levy and a guaranteed revenue amount. Equalization is used to apply the same property tax burden to districts that have similar per pupil referendum revenues, but varying tax bases. Like referendum revenue, local optional revenue is an equalized levy formula certified on referendum market value. It is equalized at the same rate as the second tier of referendum revenue.

This past school year, over 300 school districts chose to access local optional revenue, and Osakis will implement this revenue source for the first time this upcoming school year.

The recent vote to reauthorize the $300 per pupil amount of existing referendum revenue and the $300 of the local optional revenue is lower compared to many districts in our region, as well as across the state. Revenue generated from state aid and taxes helps in running a school district throughout the entire year. School buildings and grounds, salaries for all school employees, curriculum, extra-curricular activities, technology, just to name a few, are expenses paid for by revenue in the day to day operations of any school district.

Much of the information in this article can be found by reading Financing Education in Minnesota 2017-18 A Publication of the Minnesota House of Representatives Fiscal Analysis Department, at the following web address.

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Voices is rotating column written by community leaders who share their thoughts in their field of expertise.