Securing funding through the state’s budget process is an uphill climb, even for a service that is constitutionally required, such as a general and uniform system of schools. Many people in Minnesota’s public education system recall the infamous years of “zero and zero” funding increases from the legislature and then the “good” days of “2&2” on the basic formula. The basic education formula drives the lion’s share of revenue to rural schools, but adding an automatic inflationary index to that allowance is something the legislature rejected for decades, opting instead to painstakingly consider modest formula increases each budget session.
One of our major advocacy hurdles was that the state would report “surpluses” at budget forecast time, but no increase for education was assumed. This caused lawmakers to lurch for tax cuts or spending on new initiatives and pet projects, ignoring the basics, like funding the basic formula allowance which fuels public school system. The attached chart shows this reality all to well.
All of this changed in 2023 when the DFL Trifecta decided to alter the course of Minnesota’s political and economic direction. The “historic” education funding increases from the 2023 budget bill were also accompanied by historic new requirements, including educational policies and labor benefits that were mandated across all sectors, including public schools. However, part of the new policy and benefits programs was a commitment from the state to continually fund increases on the basic education formula, in addition to a major boost in state support for special education services. As the chart shows, we didn’t regain the lost ground with the new “indexing”, we simply stopped sliding further behind.
That’s why it’s difficult to understand the Senate DFL’s position to permanently repeal the basic formula allowance inflationary factor starting in fiscal year 2028. They certainly aren’t considering a repeal of the mandates, in fact they’re grasping for one-time “fixes” to Unemployment Insurance and glitches in the Compensatory Aid program that accompanied the implementation of free meals. Throw in a change order for how literacy incentive aid is distributed and the Senate DFL education plan is raising eyebrows and blood pressure from public school advocates. Do we really want to start sliding backwards again? With the mandates in place and no future formula increases to bank on, you bet we will.
The superintendents and school boards advocated for the formula inflator as a critical mechanism to ensure greater stability and predictability in funding. Removing it puts school boards and administrators in a difficult position and jeopardizes the progress we have made in enhancing educational outcomes for our students. The formula inflator is not just about numbers. It allows districts to plan for the future, invest in their staff and students, and avoid destabilizing practices like issuing non-renewal notices each spring just to wait and see how the state budget lands. Reverting to that practice will create unnecessary uncertainty, negatively affect staff morale, and further complicate the staffing challenges we already face.
The inflationary adjustment was a meaningful step toward fulfilling this constitutional duty. Reversing it would be a step backward and would create significant challenges for all schools. MREA is calling on its members to contact their state Senators, urging them to change directions and immediately restore the formula inflator in their omnibus E-12 bill.
