The Education Finance Work Group continues to gather and review information needed to draft an effective model for the state. At the July 31 meeting, the group heard two key reports from Tom Melcher and the Integration Task Force. Susan Von Mosch, Assistant Commissioner for Tax Policy, also spoke on the recent changes in homestead benefits. This discovery phase has been impactful, including showing a 17 percent fall in funding in the past 17 years when considered as a percentage of total income. (See chart below – 8/6/12 update)
Tom Melcher, with the clarity and detail we have become accustomed to, presented on the role of the property tax in E-12 funding. Tom paid most of his attention on the trends in school and local government property taxes since the last major reforms of school funding in 2001 during the Ventura administration. He shared very interesting charts on the trends in property tax effort analyzed by the property wealth of communities in metro and non-metro communities. Tom concluded by sharing that while property taxes have rebounded to the level they were in 2011, equity and access remain issues.
The working group also heard the final report of the Integration Revenue Replacement Advisory Task Force from Peter Swanson, co-chair, and Myron Orfield, a task force member who serves as the director of the Institute on Metropolitan Opportunity. This issue will need to be addressed in the 2013 session since it was not addressed last session and current law sunsets June 30. The Financial Working Group’s recommendations in Funding Education for the Future are somewhat different from the Integration Advisory Task Force Report.
Rose Hermodson, assistant commissioner, encouraged the working group “to be very conscious of the tax impact of any recommendations,” and referred the working group to the efforts of Revenue Commissioner Franz to generate interest in tax reform. The group will meet again on Aug. 20.
It has become clear to the group that referendums should be a backup, but they are very uneven across the state compared to the uniform general education levy used in 2001. Learn more and view all the presentations on the Minnesota Department of Education website.