Additional funding, Ag2Schools increase, special education changes top final Minnesota legislative E-12 education bill
WORTHINGTON — An increase in funding, addressing property taxes and improving school safety were among some of the top highlights to result from this year’s legislative session as it relates to public education in Minnesota.
This year’s session, which ended two weeks ago following a special session, will affect public education across the state.
Gov. Tim Walz signed the E-12 Education bill, which will provide an additional $543 million in funding to public schools during the next two years and $720 million during years 2022-2023.
The session included two bills directly related to Independent School District 518, but they both failed to pass. One was a $15 million matching grant request to address community education, an intermediate school or a combination of the two; the other would have provided funding to further the district’s teacher pathway curriculum.
While the two bills that were directly related to the district didn’t make it through, there were other highlights that will affect District 518 and other local school districts.
A change to the legislation commonly known as the Ag2Schools tax credit that is applied to school district bonded debt levies made it through successfully.
Authored by Rep. Paul Marquart (DFL-Dilworth), the tax credit increase initially proposed at 100% settled at 70% at the close of the session. The tax credit increase on eligible property will begin progressing next year from its former 40% credit to 50%; 55% in 2021; 60% in 2022; and will cap in 2023 at 70%. Under current legislation, the 70% tax credit rate will remain thereafter.
The increase is not contingent on the state experiencing a budget surplus, Rep. Marquart’s office confirmed.
According to District 518 Superintendent John Landgaard, the change in the Ag2Schools legislation will apply to the remainder of the district’s bonds for Prairie Elementary. Those bonds expire in 2024.
The change could also affect future referendums, Landgaard added.
Considering the district’s upcoming Nov. 5 special election, the tax credit increase could play a role in whether or not the district’s questions related to the new intermediate school pass. The two-grade question is for $29.7 million, while the three grade would request $36.7 million.
It may also have an impact related to transferring approximately $13 million lease levy payments to the general obligation bond.
“It’ll have a dramatic effect there,” Landgaard said of the change in legislation, should voters approve the question that would allow ag land to qualify for the tax credit.
The session also resulted in a boost to school districts’ per-student funding formula. A 2% boost will be realized in the funding formula next fiscal year. An additional 2% will follow during fiscal year 2021.
As a result of the increase to the general education formula, based on its student enrollment, District 518 is projected to receive an additional $680,709 during fiscal year 2020 and another $768,975 on top of the first year’s increase in fiscal year 2021, as published in a Senate council, research and fiscal analysis document.
With regard to special education, Landgaard said the legislature not only addressed paperwork requirements, but also the cross-subsidy. District 518 should receive an additional $73,159 during fiscal year 2020 for special education. In fiscal year 2021, the district will receive an additional $113,027.
A $30 million, one-time funding for safe school grants appropriation also passed. As of earlier this week, it appears that District 518 may receive a little more than $100,000. It hasn’t been discussed, but Landgaard said that funding will more than likely be applied to a security system upgrade the board recently approved for $413,419.74.