K-12 funding stays flat, but schools are still cutting

Many districts crafted their own local budgets in recent weeks with the assumption state funding would stay flat. But even though that's what happened -- and even though it could have been much worse, given the state's huge deficit -- there isn't a lot of celebrating.

"Obviously we're not happy, we're not doing cartwheels because there's still going to be pain," said Scott Croonquist, a lobbyist for metro school districts at the Capitol.

One of his group's surveys found about 30 metro districts that would have local deficits totaling $135 million, and that's if state funding stayed flat. Those same districts also plan to lay off more than 800 teachers and support staff.

"So education is sharing in the pain, there's just no question about that," Croonquist said. "But, clearly there are other program areas that are probably going to be experiencing more severe pain than education."

In addition to flat funding, schools are gearing up for delayed payments from the state. Gov. Pawlenty has said he'll use such accounting shifts to help balance the state's budget.

Schools will still get their money, but some might have to take out short-term loans and incur interest to keep adequate cash flows. Others might dip into reserves and forego interest they would have otherwise earned.

Still, DFL Rep. Mindy Greiling said that's better than the alternative.

"To not get cut in a $7.5 billion budget deficit year is really quite amazing."

"To not get cut in a $7.5 billion budget deficit year is really quite amazing," Greiling said. "We're still talking about paying them late, but they'd prefer that sort of shot in the head as opposed to being boiled in oil, which a cut would be."

Greiling was, at the start of the session, pushing for a big boost in education funding -- a plan she called the "new Minnesota Miracle." Budget forecasts made her temper those hopes, but even a delayed version of the Miracle was part of negotiations until the very end, when it was eventually dropped from the measure.

Gov. Pawlenty said in a letter that he reluctantly signed the K-12 bill. He criticized lawmakers for not including some of his pet proposals, like a statewide expansion of the merit-pay program, Q-Comp.

The final bill did include policy, though. Special education students currently can stay in the K-12 system until they're 23, which will now move back to 21 with the new law. The measure also changed some regulations concerning charter schools.

The policy most students were likely aware of is an 11th grade math test called the GRAD. This was the first year that, for the most part, every student must pass the test to graduate. That's raised concerns that many might not graduate because they only had one year for retakes.

The new law requires students who fail to retake the test twice. But even if they fail those, they can still graduate if they meet all of their school's other requirements for getting a diploma.

Education Commissioner Alice Seagren said that amounts to "three strikes and you're in," and said lawmakers should have also passed a more long-term solution to the issue. Not doing so, she added, is a step back for the state.

"Now that students know that even if they take two retests they still graduate, I think there is a concern that they may not take it as seriously as they would have," Seagren said. "We'll see. I'm hoping that the students and teachers will take it very seriously, but it's concerning that we have five years without any solution to a long-term graduation requirement in place."

Supporters defend the move, though, saying the issue needs more study, which is what a task force will do in the coming months.

As for the flat funding, Edina Schools Superintendent Ric Dressen said fellow administrators across the state are already sensing what effects ongoing cuts will have on class size. But parents, students and lawmakers probably won't fully realize it until those first days of school in September.

"When the doors open up and we really understand the impact of the loss of staff -- and it's not just teaching staff," Dressen said. "It's support staff, it's the difference-making people who aren't going to be there for many of our kids. And then, we are stuck."

Another issue that the state is likely to face in the future is that the newly-approved $14 billion education budget uses $500 million in federal stimulus money, which goes away in two years.

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