Archive Hosted by the AFL-CIO

An Overreliance on Property Taxes Fails Our Children

November 15, 2007 By John Fitzgerald, Education Policy Fellow

Last week, voters in 67 school districts approved new or increased operating levies. Voters in 32 districts rejected them. Minnesota's other 237 districts held their fire, although 90 percent of them have operating levies that probably will need to be renewed or increased soon.

The stakes are high. Property taxes make up around 26 percent of school budgets. A defeated operating levy referendum degrades education quality through teacher layoffs, program cuts and larger class sizes.

Is an overreliance on property levies the best way to pay for education? Of course not.

"It won't take too many failed levies before the state's education system fails," said Debi McConnell, a levy volunteer in the West St. Paul-Mendota Heights-Eagan School District. And that, she added, would damage the state's economy.

The Legislature is wrestling with the issue. Sen. Kathy Saltzman of Woodbury has scheduled a hearing on Nov. 27 to examine last week's elections, the state's school funding system and the politically charged atmosphere that surrounds levy elections.

Meanwhile, a bipartisan legislative task force chaired by Rep. Mindy Greiling of Roseville is studying how the state divvies up money to school districts. The group met for the first time two weeks ago and will issue a report in mid-January.

Neither group can solve the central problem: With rising costs and stagnant state funding under Gov. Tim Pawlenty, school districts have little choice but to push budget shortfalls onto property taxpayers.

The current situation can be traced to 1999, when Gov. Jesse Ventura committed the state to pay all K-12 education costs and remove the need for school operating levies. In 2001, almost $1 billion in school district property taxes were replaced by state aid. But if communities wanted "extras" for their schools, such as a new foreign language course or orchestra instruments, they could raise property taxes to pay for them.

Sadly, Ventura couldn't assure schools of full state funding forever, and his commitment didn't survive his one term in office. When Pawlenty became governor in 2003, he faced the dilemma of meeting a $4.5 billion state budget deficit while adhering to his no new taxes pledge. Pawlenty made his choice: Minnesota schools lost funding and starved for the next two years. Budget increases since then have not closed the gap. In 2008-09, state school aid will increase just 1 percent.

Under Pawlenty, state per-pupil school funding has dropped from $989 to $542, adjusted for inflation. In 2003, the state paid 75 percent of school costs and property taxpayers 19 percent. In 2007, the state share is 68 percent, the property tax portion 26 percent.

With rising utility, insurance and special education costs and no financial help from St. Paul, districts have turned to so-called "excess" levies to get the money to properly educate students. Voter turnout in levy elections is usually light, leaving a district's financial health "at the whim of whoever has the best campaign slogan," said Rolf Parsons, White Bear Lake's school board chair.

There is a cry for reform. Schools want a more stable way to pay for education. But this is not new ground. In the 1970s, the Minnesota Miracle was a national model for state-funded public education. In the 1990s, the Legislature was told what it costs to provide a quality education, but took no action.

In 2003, Pawlenty created a committee to look into education funding. The committee urged increasing state aid by $1 billion a year to get schools up to snuff.  Pawlenty chucked the committee's report out the window.

A coalition of about 20 Minnesota education organizations rallied around P.S. Minnesota, which took up the report and proposed a better way to allocate state money for schools. That plan has been handed to Greiling's committee.

But neither Greiling's committee nor Saltzman's hearing and the outcry of hundreds of thousands of angry Minnesotans will ease the crushing burden state underfunding has placed on schools and property taxpayers. We will receive no relief until the state invests more money in its public schools. When that will happen is up to the governor.

Thanks for participating! Commenting on this conversation is now closed.