Special Report


January 04, 2005 1 min read

General state aid and levies from the state’s school finance formula account for about 75 percent of total state and local revenue for K-12 education in Minnesota. The other 25 percent comes from the state’s 48 categorical-aid programs. Categorical programs include support for high-cost special education students, desegregation, debt service, and adult literacy. A local levy is not required for districts to receive basic-formula aid, but local levies are required to receive other types of state aid in which the state guarantees a certain tax base per pupil. The state formula incorporates grade-level weights and includes an adjustment based on student eligibility for free or reduced-price lunches. Local revenue is primarily collected from property taxes. At the state level, no taxes or fees are earmarked for education. Although Minnesota has a lottery, proceeds are not specifically earmarked for education. The most recent court battle over school finance in Minnesota was a case brought in 1995 by the Minneapolis NAACP. The state and the NAACP settled the case. In July 2004, Minnesota released an adequacy study, “Investing in Our Future,” which was part of the work of the governor’s task force on education finance reform. The study was conducted using the “professional judgment” method. It estimated that the cost of providing an adequate education ranged from 3 percent less to 15 percent more than current education expenditures in 2004.