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Minnesota School Districts Can't Hold Out Anymore

August 18, 2009 By John Fitzgerald, Education Policy Fellow

Faced with declining enrollment and the prospect of operating in debt, The Oglivie school district has decided it can't hold out anymore and will ask local voters in November to help pay for their schools.

Oglivie is one of the few school districts in Minnesota that has no local school operating levy, but Superintendent Ed Harris said the district needs to pass a big levy or cut core programs.

It's a situation being played out throughout Minnesota. Struggling districts from the metro area to the rural counties can't make ends meet and are forced to ask voters for more money.

Oglivie, which has seen its enrollment drop from 700 to 615 students in the past five years, has cut more than $1.2 million out of its budget to trim it to this year's $5 million.

"We've made some big cuts, but we continue to have a reasonable spectrum of offerings equal to others around us," Harris said. "But if we skinny down our electives and extracurriculars and core classes, we'll see a further slide of students to other schools. If we want to keep our independence, we have to pass a levy."

Oglivie is not alone. A survey released Monday shows more than 60 Minnesota school districts will ask voters in November for enough money to run their schools. That number could jump to 70 districts by next month, experts say.

The numbers are about the same as other recent odd-year levy elections, but school superintendents know that the number of victories this year will be few in today's economic climate.

School districts are forced into this untenable position after years of underfunding by the state - an inflation-adjusted 13 percent drop in aid since 2003. Districts have asked local voters to raise property taxes to make up the difference, but when totaled statewide, districts are still 4 percent behind their 2003 budgets.

Looking ahead, districts will see no increase in state aid in the next two years. Also, Gov. Tim Pawlenty has approved a tax shift which delays 27 percent of state aid to the following year.

Under these harsh financial realities, the Minnesota School Boards Association asked school superintendents if their districts planned to ask voters to maintain or increase local school revenue. Of the 340 districts, about 280 responded with 62 saying they will run a levy election in November.

Greg Abbott, an MSBA spokesperson, said districts have until Sept. 11 to decide if they will run a levy referendum, so he expects five to eight more districts to decide to run.

The number itself is not unusual. About 60 to 65 school districts usually run levy elections in a non-general election year. The number is lower in general election years: Last year, 42 districts ran a levy election.

"What's odd this year is the economy," Abbott said. "Sixty-two districts - nobody wants to go out (for an election) this year, but they need the money to avoid the cuts coming down the line."

Many districts aren't asking for more money, they simply want voters to renew existing levies that are set to expire. Some of these districts include Anoka Hennepin, which wants to renew a $142 per student levy scheduled to expire in May; Wayzata, which wants to revoke three levies and combine them into one levy that totals the current $1,609 per student levies; Ulen-Hitterdahl, which wants to renew its $1,990 per student levy; and Lac qui Parle Valley, which wants to renew its existing levy of $1,100 per student.

Some districts are looking to boost their local aid, including Hendricks, which is looking to go from an $800 per student levy to a $1,450 per student levy; Edgerton, which is asking voters to double the levy from $613 per student to $1,200; and Adrian, which is asking voters to replace a $450 per student levy with a $1,250 per student levy.

In a disturbing trend, three more districts without a local levy are now asking voters to support their schools. Local property tax levies are officially called "excess levies" because the state is supposed to pay for education and local taxpayers are supposed to pay for any extras the district might desire. But because the state does not adequately fund education, more than 90 percent of Minnesota school districts require local taxpayers to directly support their schools through local levies. This November, North Branch, Oglivie and Pelican Rapids will join their ranks.

Harris in Oglivie said the district tried to pass a levy last year but failed by about 200 votes. He attributed the loss to the large general election turnout and hopes this year's lower turnout for a more local election will work in the district's favor.

More importantly, he believes the Oglivie district has shown voters it is willing to make changes to cut costs. Oglivie will start a four-day school week this fall, saving about $60,000. Teachers and administrators have agreed to a hard wage freeze for the next two years.

School leaders like Harris have shown leadership in the face of an intolerable situation. Yet the question remains: Why are we funding our schools in this fashion? Almost every school in Minnesota needs money from local taxpayers just to keep the lights on when the state agreed it would pay those bills. That the state has reneged on this promise is evidence of a titanic failure of leadership.

Make no mistake about it: No increase in funding for schools and the 27 percent tax shift that Gov. Pawlenty initiated didn't result in "no new taxes." It resulted in school districts begging to increase taxes just so they can keep their doors open. That's not "no new taxes." That's just forcing leaders in districts like Oglivie to bear the brunt of the tax burden instead of state lawmakers in St. Paul.

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