School District 197 Superintendent Blog
Welcome to my blog! The purpose of the blog is to provide an avenue for communication with parents and community members. I will be sharing our progress in implementing the District Strategic Framework. Periodically I will also post photos and share news of special events that I attend in our schools.

Friday, October 14, 2016

The Impact of Unfunded Mandates on School Budgets

On the ballot during the general election on November 8th is a request for voters in District 197 to approve the renewal of a $5.2M annual operating levy. The levy, which was first passed in 2007, expires in 2017.  District 197 is asking voters to extend the levy for another 10 years from 2017 to 2027.

No changes to the existing levy are proposed.  Because the existing levy includes an annual inflationary increase, the value of the dollar is sustained throughout the duration of the levy.  This makes it substantially easier to maintain programs the levy helps to support.

This operating levy provides much needed funding to support basic education programs.  While the state legislature, which provides 71% of our annual operating revenue, has made efforts to increase funding for education, the per pupil amount has not kept pace with inflation.  This is evidenced in the chart below.

In education, we are responsible for many state and federally-mandated programs.  Unfortunately, these programs are not often funded in whole or even in part.  When you combine unfunded mandates with funding that lags behind inflation, revenue has to come from somewhere.

In this blog post, I'd like to provide a few examples of unfunded mandates that have led to budget shortfalls that have, in turn, left school districts in Minnesota heavily dependent on local operating levies.  There are three notable programs that everyone has likely heard about at some point in time.  The first is special education, which carries a federal mandate to meet the individual needs of students with disabilities.  The second is to provide language services for students whose home language is not English.  And the third is programming for gifted and talented students.  These are vital programs for our students.  Yet in none of these three programs do we receive enough state or federal aid to cover the actual costs to deliver the programs as required by law.

Since its passage in 1975, Congress has never fully funded special education.  Nor has the state of Minnesota fully covered its portion. This leaves districts having to cover the gap in funding, which is commonly known as the special education cross subsidy.  In District 197, the cross subsidy for special education is approximately $4M a year, or roughly one-third of special education's $12M annual budget.  We rely on our general fund to cover the $4M that should be coming from the state and federal governments.  As shown in the chart below*, the cross subsidy for schools across Minnesota is staggering, and it is growing.  It is why we consistently lobby the legislature and Congress to fully fund special education.

My second example is how districts are left to fill funding gaps for teaching English to students who are not proficient in English.  To fulfill this mandate, we receive categorical state aid for English instruction for non-native speakers, but it does not cover the actual costs. Our cross-subsidy here is approximately $900,000 per year. Third, while we receive a small amount of funding from the state to support mandated programming for students who are gifted and talented, our cross-subsidy is roughly $250,000 per year.  Combined, these two cross subsidies total over a million dollars a year.

Again, these programs are critically important to ensure the success for all students, and we are committed to providing support and services to our students. There is no question about that.  But as you can see, costs quickly add up.  It is left up to us to fill in the funding gaps at the local level.

I hope I have provided you with helpful information for thinking about the upcoming levy renewal.  You can find out more about our levy by visiting our district website.

In closing, please be sure to vote on November 8th.


Nancy Allen-Mastro

Follow me at Twitter @Supt197

*As published in the Association for Metropolitan School Districts' September 2016 Connections newsletter. 


  1. Thank you for sharing this information. Did the school board explore any options for including these costs in the city's annual budget? (not sure if this is complicated by multiple cities in one school district)
    It's scary to think that either the city council or levy voting results could result in these programs becoming unsupported.

  2. Thank you for your comment and your question. The school board and the seven cities in our school district boundaries operate from different budgets, of course, but the taxes levied come from the same households and businesses. Specific to your question, we would not expect the cities to fund school district programs.