I hope that each of you has been enjoying a wonderful fall season. The purpose of this article is to provide an overview of school funding.
Generally speaking, school revenues fall across the following percentages:
Local: provides approximately 25% - 30% of operating revenues primarily through property taxes and fees for services - school lunch being one example.
State: provides approximately 65% - 70% of the total costs of elementary and secondary education.
Federal: provides approximately 5% of school funding.
At the Fergus Falls Public Schools’ board meeting held on Monday, Sept. 28, the school board made a decision to authorize its maximum levy capacity. This is a common practice among the roughly 500 school districts in Minnesota, but what does it actually mean?
Minnesota public school funding is complex. The district’s annual levy certification document typically consists of nearly 40 pages filled with formulas and calculations. The formulas are a mix of state aid and local property taxes. The state “equalizes” some funding which is intended to help lessen the tax impact in districts with low property tax values. These districts receive more state aid which decreases the amount residents need to pay in property taxes. The other key piece of our funding allocation is tied to student enrollment. The more students in your district, the more money the district receives.
All of these calculations represent a combination of state aid and levy dollars. Some of the levy dollars must be voter-approved such as excess operating levies which are used to cover general operational costs or school bond referendums which are used for building projects or facility improvement projects. Currently, the Fergus Falls Public School District 544 does not have a voter-approved excess operating levy. The district does have a voter-approved bond that was used for facility improvements and expansion of Kennedy Secondary School. The bond is currently scheduled to be fully paid off in 2027.
Other levy dollars come to schools without needing voter approval — this was the authority the district exercised at the Sept. 28 board meeting. While the district did elect to levy its maximum capacity, overall district residents will see a tax decrease of 4.91%. Be aware, this is on the school portion of your property taxes and is subject to change before it is finalized in December. Other entities also rely on property taxes for revenue which could cause your taxes to increase even though the school portion went down.
At this point, it is important to dispel a myth. In terms of revenue per student, Minnesota school districts are not created equal. As a general rule of thumb, metro-area schools receive more revenue than outstate schools, however, some rural school districts effectively offset the difference by passing excess operating levies at the local level.
In practical terms, what impact does this have on our school district? On the revenue side, the “Total All Funds per Student” we receive is $12,254 compared to the state average of $15,674. We rank 459th out of 512 school districts in revenue per student, meaning we receive fewer dollars to educate our students than the vast majority of school districts.
How does Fergus Falls compare to the state average on expenditures per student? Fergus Falls ranks 473rd out of 512 districts on expenditures per student. We spend $11,751 per student versus the state average of $16,516.
With less overall revenue to educate our students, we need to be very diligent in how we expend funds. Overall, Fergus Falls School District 544 spends $3,000 less than the state average to educate each student and that difference increases to $5,000 less per student when title funding and other sources of revenue are taken into consideration.
How does Fergus Falls School District 544 prioritize its spending? The following table (above) breaks down the district’s expenditures - note ADM stands for “Average Daily Membership” which is used to denote students.
The expenditures show that Fergus Falls Public Schools spend a higher percentage of its revenue on instruction than the state average. The district’s use of its revenue should focus on instruction.
With prudent use of those dollars, the district offers an exceptional curriculum to challenge students whether they are seeking a traditional pathway or prefer a more hands-on approach to learning featuring vocational classes. The district has approximately 30 co-curricular activities ranging from a full complement of athletic options to speech, musicals, one-act play, Knowledge Bowl, mock trial, robotics and a host of other opportunities to align with student interests. It maintains its buildings and grounds, invests in technology to augment student learning and pays for the transportation of students to and from school and co-curricular events.
In summary, the district operates under a fiscally conservative budget while still supporting an outstanding educational experience for all students. Each year, the district offers a “Truth in Taxation” meeting to the public which takes place in December. This is an opportunity to ask specific questions about the school district portion of your property taxes. In the meantime, we continue to be very grateful for your continued support.
Jeff Drake is the superintendent of Fergus Falls Public Schools.