School Funding Challenges - How Will The Housing Market Complicate Matters?

The Lake Minnetonka area has been very active with school funding topics lately. Minnetonka and Westonka both passed levy referendums in November, and the Hopkins school district recently exited statutory operating debt status just as Westonka announced that they had entered it. Statutory operating debt, in simple terms, occurs when the general operating fund balance falls below a certain threshold.

A question I haven't heard explored much recently is what impact, if any, the deteriorating housing market has on school funding going forward. Roughly 67% of school funds come from the State, while 18% comes from local property taxes. The remainder comes from school fee revenues and federal funds.

The 67% of State revenue is paid on a per-student basis, so it is fixed from the local school district's standpoint. There may be a budget crunch at the state level as they attempt to fulfill this obligation, but the localities can count on the money assuming they have accurately forecasted enrollment trends.

The levies that are paid from local property taxes come directly from a portion everyone's yearly tax bill. On your property tax statement, you can see what portion of your payment goes toward school funding.

The question isn't what the funding picture looks like in 2008 -- I think it is pretty well established. The concern is what assumptions have been made about property tax appreciation going forward? Are districts operating under an assumption that property taxes will continue to increase at a high clip, only to have actual revenue falls short of estimates? I understand there is still some room for tax valuations to grow based on actual market value and limited taxable market value, but there is less room to grow than there may have been in 5-year estimates done in 2006 or early 2007.

Does Minnetonka 2010 school district funding, for example, assume conservative or flat property tax revenue increases, or are the estimates based on the abnormally high rate of increase experienced in the 1st half of this decade?

With all of the financial specialists and auditors reviewing school finances, I'm sure this question has been actively explored. If anyone has insight into this, I'd appreciate the dialogue.

Thank You to November Readers

Since the inception of this blog, no month has ever possessed the readership that November has. I won't divulge all of the numbers, but the day before the 11/5 School Board elections alone had more visitors than what I had hoped I'd get in a typical week ongoing.

Through a nifty little tool called Google Analytics, I can get a sense of what people are interested in reading about. One of the categories that is on the Google report is "Top Keywords". That is, which keywords were people searching for most often when Google or Yahoo routed them to your site.

In November, Virtually all of the top keywords had to do with the election. Things like "Minnetonka School Board", "Minnetonka Referendum", and individual candidates' names were all in the top 15 keyword searches. Additionally, 4 of the top 10 search terms had something to do with Bill Wenmark. While I wrote before the election that wasn't thrilled the election was becoming about one candidate's history rather than today's pressing issues, I admire that people of the area took it upon themselves to research the issue on their own, as is evidenced by the number of search hits on that topic.

Writing a blog like this can be a crapshoot. Staring at the monitor while writing a column, it reminds me of the line from Pink Floyd's Comfortably Numb that goes "Hello, is there anybody in there?" I'm glad to know that there is indeed someone in there, and that whoever they are care about local civic issues.

A Resounding "Yes": The Minnetonka School District Referenda

Two SD 276 levies passed with wide margins yesterday: A general operating levy (65%) and a technology levy (64%). A quick scan of the Star Tribune's election results shows that of the 65 metro-area school referendum questions on the ballot, only one school levy question (Edina - 72%) passed with more support than the two in Minnetonka.

There could be several theories on why this occured. It may be that the tax neutrality of the deal made it easy to vote for. Or perhaps the "Yes for Excellence" campaign was incredibly effective.

In scanning the election results, a correlation emerges: The two districts who supported their referenda by the largest margins, Edina and Minnetonka, happen to also be two of the top ten academic districts in the state. I'm not arguing a causal relationship -- I don't understand enough about the innards of school operations to do so. I just find it an interesting correlation.

The chicken-or-the-egg question comes in to play: Are these two districts really as good as they are because voters support spending tax dollars on them, or do voters feel better about their "yes" vote to a levy because of the pride of already having a great school district? Or maybe the same effective management of the district which persuaded us that these levies were truly necessary does a great job in other aspects of district management as well. The message of "this well-run district only asks for money when it truly needs to -- and this year it truly needs to" resounded with many, I believe.

Now that the levies passed, it will be important for the community to stay engaged with district. The district should continue to show us that funds are used wisely, innovation doesn't end, new ways to stretch an education dollar so it can impact more kids sought out and found. If they do, the next time they come with a similar referendum, whether it is 3 years or 10 years down the road, it will be another no-brainer for the community.

Minnetonka School District Election Results

All election results can be found here, based upon your zip code:
http://mpls.startribune.com/news/politics/elections/myvote/pf.php

In case you don't want to wait, the operating and technology levies passed by 65% and 64%, respectively. The four candidates elected to the school board were Lisa Wagner, Calvin Litsey, Paul Luehr, and Karen Walcowski.

Where to Vote on Tuesday, Nov 6

To find your voting location for Tuesday's School District polling, go to the Secretary of State's website and type in your zip code and street. Voting locations are based on where you live.

http://pollfinder.sos.state.mn.us/

This mailer from SD276 also summarizes where you should vote based upon your home location:

http://www.minnetonka.k12.mn.us/referendum/mailer/P08.pdf

Reasoned Referendum Argument

Occasionally I like to post one of the submitted "comments" as an actual blog entry, especially if it presents information in a way that is more succinct and cogent than I've been able to. Attached is a comment from Peg Keenan in response to one of the comment posts from a recent thread:

Response to the Admiral:I can’t speak to what is going on in Westonka, where you live; however, I know in the Minnetonka School District the need for the referendum is real. With only a 1% increase in general education funding for 2008-2009, Minnetonka is facing a $3.4 million deficit. Minnetonka School District wisely used the 4% increase appropriated in 2005 to stretch all the way through 2007-2008 without budget cuts. They have had the authority to go to referendum since 2003 and have held off until 2007. The District is very well managed and only has approached voters when it became absolutely necessary. I also applaud the School Board for their plan to neutralize the tax impact of the operating referendum by decreasing the levy for long term maintenance. Residents should check out the online tax calculator at: http://www.ehlers-inc.info/taxInformation/Minnetonka/Our referendum investment in 2002 has provided great returns on our investment and student achievement has increased by almost every measure. I encourage everyone to read the Minnetonka School District Annual Report to see the incredible achievement. It is online at www.minnetonka.k12.mn.us/annualreport.pdf

Peg Keenan

Chair, Committee for Quality Academics

Star Trib Comments on School Funding

The Strib devoted much of their Sunday Opinion page to school referenda and funding topics. While I'm guessing that anyone who reads this blog also reads our local papers, I thought I'd link to the columns just in case. They are interesting and provide additional context to an election year when about 1/3 of Minnesota districts are asking their residents for money.

The editorial was thought provoking for me. While I stand by my belief that funding at a local level is generally more efficient and accountable than pooling state or federal monies together and redistributing from afar, the Strib made a good point that funding by referendum is not very predictable or stable for the districts.

http://www.startribune.com/editorials/story/1510997.html
http://www.startribune.com/editorials/story/1510996.html

Refreshed District 276 School Board Candidate Websites

In the spirit of having all websites in one place, here is the latest on the candidate websites, in no particular order:

Paul Luehr: www.paulhuehr.org
Cal Litsey: www.calvinlitsey.com
Bill Wenmark: www.billwenmark.com
Karen Walcowski www.karen4tonka.com
Doug Anderson www.electdouganderson.com
Lisa Wagner www.electlisawagner.com
Alice Everett none found
Renee Schubbe not actively campaigning

Additional information on the candidates can be found at:

Candidate Forums (highly recommended) http://www.starrinkmedia.com/district276/

Lakeshore Weekly news: http://www.weeklynews.com/main.asp?SectionID=10&SubSectionID=10&ArticleID=3867

Tonka Focus candidate Q&A: http://www.tonkafocus.org/

Flaws in School Funding: A by-product of referendum research

Like most residents in School District 276, I've received much literature about the upcoming education referenda. I've read the literature, researched the SD 276 website, and listened to the board candidates answer the referenda-related questions at the candidate forums. I've come to this conclusion: It is very hard to make an argument for a "no" vote.

From a school funding standpoint, there is no doubt that the caliber of SD 276's education would suffer without sustained funding. These referenda don't create a cash infusion to the district -- they simply make the district whole after having state funding reduced to a trickle. While I appreciate the tax neutrality of the deal, I could live without that aspect. All debts must be repaid sooner or later, and I hope we aren't simply deferring more debt to later payment dates (something I have had a hard time finding succinct info on). If I need to pay more local taxes today to offset the state shortfall, I will.

In researching the referenda, I've learned something that I'm embarrased to say I didn't know before: The state has a cap on how much the district can levy, and we are at that cap (assuming all of the referenda pass). To me, this is the real issue rearing its ugly head in this funding equation. As someone who believes in local control of tax dollars, I am bothered that a centralized state government has set a limit on how much a locality can tax its people for a local service, especially when it would be decided by referendum.

I generally have a high degree of confidence that there is transparency and accountability tied to my local tax dollars: Police, schools, city government, etc. I have slightly less, but still considerable, comfort when it comes to county taxes. I'm really mixed on state taxes -- I see state taxes going to good causes and I like that they benefit those in my broad community, but don't always feel like they are used effectively. When it comes to federal taxes, all bets are off. Federal income taxes are the largest single expense that my family has, and I honestly can't tell you what it is being spent on or if it is being spent wisely. My whole point is that I would much rather pay local taxes than state, and state taxes than federal.

I was disappointed when I learned that not only does the state redistribute the educational tax dollar in a way that underfunds the western suburbs (as Rep. John Berns astutely pointed out in an Oct. 3 Commentary to the Star Tribune), and not only has the state been not keeping up with inflation in its recent funding of education in districts, but they completely tie our hands by limiting how much we can pay locally for the school systems we desire for our children.

In learning this, I feel like our founding fathers' vision of federalism has even failed on the most local level. I'm all for helping some of the poorer districts in the state provide their kids a better education with my tax dollar -- every child deserves a good education regardless of which neighborhood they happen to reside in. But if we as a district (and that really is who a school district is -- not the Superintendent, not the Board, but the community who funds it) want to provide our kids with educational opportunities that are above and beyond, and are fully willing to pay for it ourselves, why can't we?

Minnetonka school district not alone in asking for money

According to an MPR report this week, 1/3 of all Minnesota school districts are asking for money via referendum, with 60% of them request the renewal of an existing levy. The article can be found here:

http://minnesota.publicradio.org/display/web/2007/10/16/schoolmoney/

More to come with my thoughts on the topic of so many districts going to the public for more money, but for now I wanted to post the link.

SD 276 Candidate Forums

Three candidate forums for the SD 276 School Board election have already been held, and the final one will be at 11:30am on Tuesday, October 23, at Excelsior Elementary School.

To see a rebroadcast of the forum held on 10/3, go to this link: http://www.starrinkmedia.com/district276/

The webpage includes a very useful menu bar on the left which allows the user to select topics of particular interest rather than listening to the entire forum. Of course, listening to the entire forum is encouraged as well!

Website for Bill Wenmark, SD 276 Incumbent

The website for Bill Wenmark is now up-and-running at www.billwenmark.com

By our research, that leaves Alice Everett as the only candidate without an active website, although she has been involved in all forums and is actively campaigning.

If anyone knows of a website for Everett that is eluding us, please let us know.

SD 276 Referendum Information

If you live in the Minnetonka school district, you are likely aware that residents will be voting on an education referendum in the November 6 election. I won't attempt to explain the nuts and bolt of the referendum, as other sites can do it more effectively. Both of these sites (one being SD 276's) are very much advocating a "Yes" vote to the referendum. I've tried to also find information from the "No" side in the spirit of balancing things out, but have not had any success.

http://www.minnetonka.k12.mn.us/referendum/QA.htm
http://www.yesforexcellence.com/

Refreshed School Board Candidate Websites

I thought I'd refresh the website info for the SD 276 Board candidates. My sources are Google and tips from readers. If I'm missing a website for either Wenmark or Everett, please let me know -- I don't intend to omit anyone.

Karen Walcowski: www.karen4tonka.com
Lisa Wagner: www.electlisawagner.com
Cal Litsey: www.calvinlitsey.com
Paul Luehr: www.paulluehr.org
Bill Wenmark: no website found
Alice Everett: no website found
Doug Anderson: www.electdouganderson.com

Also, the folks over at www.tonkafocus.org did a candidate Q&A, where all active candidates but one answered some questions of interest. Go to the website and click on "Candidate Q&A" on the left side.

SD 276 School Board Candidate Websites

Informational websites for four of the seven SD 276 Board candidates can be found on the links below. While there are officially eight candidates listed for the upcoming election, we're hearing that Renee Schubbe decided not to run but missed the deadline to remove her name from the ballot, and won't be campaigning.

Here are the other seven and links to their websites:

Karen Walcowski: www.karen4tonka.com
Lisa Wagner: www.electlisawagner.com
Cal Litsey: www.calvinlitsey.com
Paul Luehr: www.paulluehr.org
Bill Wenmark: no website found
Alice Everett: no website found
Doug Anderson: no website found

This blog will not endorse any candidates but will do its best to bring you election information as it draws nearer. If any readers know of other good sources of information on the Board candidates and issues, please send them to me and I'll gladly link to them.

School District 276 - IB Comment from Reader

In a posting from early August, I requested any opinions or observations about the International Baccalaureate program in the Minnetonka School District. A reader recently posted this which I wanted to highlight and not have it buried back in the comments:

The IB program is an incredible addition. The number of students who have entered into the program and are taking classes has expanded three-fold since introduced at the high school (our student is one of them). I believe the money spent is nominal and goes towards preparing teachers who wish to teach IB. I might add that this is an optional program for students – it would be very interesting to hear from IB students!

Thanks to this reader for posting this useful information and opinion. The IB program and other school issues will be big news very soon, as another school board election approaches. I've always been impressed how fluent on the school district issues our voters tend to be, and I'm sure there will be a thorough vetting process for this year's election.



I'd love to post some articles on topics of particular interest in the upcoming school board election, ones that would spur good discussion among readers. If you have ideas for the most relevant issues, please let me know what they are.

International Baccalaureate: 2 years later

A topic that was all the buzz at this time two years ago was the Minnetonka School District International Baccalaureate (IB) program. As I recall, it was quite a controversy within the School Board elections of 2005, when the program was in its first year and there were calls to abandon the effort.

In a nutshell, the supporters of IB were saying that it would broaden horizons for students beyond the traditional high school coursework, help them prepare for increasing globalization, and boost incoming open enrollment numbers. The opposition claimed that it was the wrong thing to do at a time when money should be spent on more basic things (I should mention that IB is not cheap) and that many of the concepts teached would be anti-American or anti-Christian.

It was hard for me to buy the Anti-Christian or American argument. Isn't school supposed to be a place where students are taught to think? Sure, you need to do it at an age where a teen has the maturity to separate a concept from a fact. But if the student has mastered basic history and literature, what is wrong with introducing concepts that will require more reason?

The cost point, on the other hand, seemed more compelling. If we truly are cutting back on some of the more basic services provided, did it truly make sense to begin spending money on what many perceive to be a "bonus" of education, and not part of the core?

The reason I post this topic is that I really haven't heard much about IB in the past year. I'm very interested in hearing from readers who still have strong feelings, and would be especially interested in hear from parents or students who have first hand knowledge of the IB program. Did it broaden your education? Did it give you a leg up in college?

Big school board election this fall (4 seats turnover). Will it be a big issue again?