PRINTER FRIENDLY VERSION

Q: Does it cost more to educate a public school student or a nonpublic school student?
A:When comparing the costs of educating students in public and nonpublic schools, merely reporting the numbers does not tell the entire story. Here's why.

In 2001-02, the average cost per student at Mounds View Public Schools was $7,585. Although this may seem equivalent to some nonpublic schools' tuitions, this similarity in expenses can be explained by looking at the differences in funding between public and nonpublic schools. The following five funding facts can help.

1. Public schools serve all students.

Every child has a right to a free and appropriate public education. While some students may only cost $4,000 to educate, others cost much more. Nonpublic schools are not required to educate students who cost more.

When students “struggle” in school (academically or behaviorally), public schools have an obligation to provide additional assistance to help students succeed. Public schools are charged with ensuring that all students meet basic standards. Also, public schools cannot expel students simply for failing to perform. This is the foundation of the accountability movement and the “No Child Left Behind” act. Nonpublic schools are not obligated to keep students who struggle.

Public school districts serve many more students from impoverished or disadvantaged families than do nonpublic schools. Often times, these students' academic needs are greater than others. Subsidies do not cover all the expenses associated with providing this support.

2. Public schools must meet mandates.

Because public school districts are owned by the state and the communities they serve, they are subject to expenses associated with state testing and reporting mandates, systems accountability reports, the publication of board minutes, broadcast of public meetings, public bidding notices and data practices compliance. Nonpublic schools do not have these expenses and are accountable to fewer constituents.

The federal government originally promised to fund 40 percent of the cost for educating students with disabilities in public schools. Currently, they are not meeting that promise. While both federal and state funds are earmarked for special education programs, school districts have had to take money from their general funds in order to satisfy the mandates. This has been referred to as the “special education cross subsidy.” Last year, Mounds View Public Schools transferred $4.3 million from the General Fund to a special education fund in order to meet the state and federal mandates. By comparison, the District experienced a revenue shortfall that year and had to reduce $3.2 million to balance the operating budget. Nonpublic students with disabilities often receive special education services provided by public school districts at the expense of the public school district – not the nonpublic school.

2001-2002 unfunded, but mandated, special education expenses	2001-2002 deficit in operating funds
$4.3 million	$3.2 million

3. Tuition does not cover the entire cost of educating a nonpublic student.
A nonpublic school's tuition is not an accurate reflection of the school's cost per student. Nonpublic schools rely heavily on endowments, charitable giving and other support (parish, corporate, alumni, etc.) to fill in the gap. In Mounds View Public Schools, property taxes collected from residents cover only 6.1 percent of the entire cost of educating a student.

4. Public schools provide funding and services to nonpublic schools.
Non-public school aid that flows through public school district operating budgets artificially inflates public school district budgets and understates private school budgets. One example is transportation. Districts are required to provide fair and equal transportation for non-public school students. Mounds View Public Schools also provides nonpublic aid for textbooks, health services, guidance counseling, special education services, English Language Learners (formerly ESL) and Title I.

5. Public schools have higher labor costs than nonpublic schools.
At Mounds View Public Schools, 75 percent of the operating budget is spent on costs of labor. Most public school employees belong to a collective bargaining group, which keeps wages and benefits competitive for the market area. In our district, we have six bargaining groups. By law, districts must bargain with collective bargaining groups. Nonpublic schools, however, are typically not organized for bargaining purposes.

Public school financing can be complex and complicated – even for many of the experts. I hope these five funding facts have provided a more clear understanding of the differences in funding between public and nonpublic schools.




Q: Why do you spend so much money outside of the classroom?
A:More dollars go towards student instruction than any other area. This year, 66 cents of every General Fund dollar is going towards student instruction. When you add the money we spend on assistant principals, media center staff, academic counselors and other support staff, it would show that 71 percent of our General Fund budget is spent on services that directly support students.

However, student instruction is only a portion of what public schools are expected to do on a daily basis – and not all student instruction activities are fully funded. State mandates require Mounds View Public Schools to provide special education programs. We're also mandated to provide transportation and special education services. These areas are only partially funded by the state and federal governments. The difference has to be supported by the District.

In addition, we believe the District should provide healthy and safe schools for our students, families and residents. Providing quality educational services also requires professional support for our entire staff. Human resources, communications, technology and enrollment services are just some of the functions we need to provide.

As you know, the challenges facing today's students come with a larger price tag than ever before. Like all other public schools, our schools operate to support students, whether that student is in a math class or a vocational education class, working on an assignment in the media center, getting help from a counselor or in a special education class.

More details . . .

The District saves money by joining with other districts to offer collaborative support services to students. The Collaborative Educational Services Task Force recently reported on our savings and also offered recommendations for future efficiencies. To read the report go to http://www.moundsviewschools.org/pdf/collabfinal.pdf.

Where exactly does the money go? For a closer look at how the District divides the General Fund budget, and for a comparison of our spending with other districts, go to http://www.moundsviewschools.org/pdf/dollar1117.pdf.




Q: Some say the District is receiving more money each year. Others disagree. Who's right?
A:Both viewpoints are correct. Here's why.

When you consider operating revenue, the District is not keeping pace with inflation. When you consider non-operating revenue, the District is experiencing growth.

More specifically, the money it takes to run our schools is operating revenue that is provided through general education revenue. This revenue is not keeping pace with inflationary increases in expenses. Over the past 13 school years, the District has received a total net increase of 17.31%. During that same time, Minneapolis-area inflation increased by 39.5%. For a more detailed look at revenue vs. inflation, visit http://www.moundsviewschools.org/pdf/fundhistory02.pdf.

On the other hand, our non-operating revenue pays for facilities improvements and equipment only, and it has shown considerable growth. The main reason is because our community passed an $80 million bond referendum for construction in 1999. However, those and other non-operating funds cannot be used to run schools. The money can only be used to improve facilities.

This is why reports that show considerable growth in revenue and spending are misleading. Those reports include funds that cannot be spent on our District's educational program. A more detailed report, prepared by citizens volunteering on our District Finance Committee, is available at http://www.moundsviewschools.org/NRfinancecommittee.htm.

More details . . .

If you hear that districts are receiving increased state aid, ask them if it's really new money or money merely shifted from one existing funding source to another. During the last several sessions, the Legislature has put more money into education by increasing state aid to school districts – while simultaneously reducing local property taxes that go to school districts. The net result is a “wash” for districts. The state is simply paying a greater share of the overall cost, while local property taxpayers are paying a smaller share.

The state also has property tax credits available to homeowners for education, and the state counts school property tax relief as “education funding.”

None of these actions increased the amount of money going to school districts.

Aside from additional referendum dollars, the only way that school districts receive additional funding is through Legislative action – the majority of which is tied to the per-pupil formula. The formula has increased in the last several years, however, the increase is far less than what is needed to cover the state's definition of “education spending.” According to the Association of Metropolitan School Districts, in the last 10 years, there were four years where the state per pupil formula did not increase at all, and three years where the increase was less than inflation.




Q: Why does the District keep putting more money into administration?
A:In many organizations, a common assumption is that the administration keeps growing while other areas are being cut. But at Mounds View Public Schools, administration spending is decreasing.

From 1998-1999 to 2001-2002, administration expenses ranged from only 5.5 % to 5.9% of the General Fund budget.

For 2002-2003, we're on track to spend only 4.75% of our General Fund budget on District and School Administration.

District and School Administration Expenses: as a percent of General Fund Spending

1998-99	1999-00	2000-01	2001-02	2002-03
5.78%	5.5%	5.9%	5.7%	4.75%
Actual	Actual	Actual	Actual	Projected

For this current school year, $1 million of reductions were made from centralized District support in order to direct as many funds as possible to direct instruction. For a closer look at the $1 million in reductions, go to http://www.moundsviewschools.org/pdf/1million.pdf.

More details . . .

A comparison with other districts, shows our administrative spending to be similar. A five-year average comparison with seven other districts closest in size reveals that Mounds View Public Schools spent an average of 5.45% on district and school administration, while the other districts spent an average of 5.27%. For more spending comparisons, visit http://www.moundsviewschools.org/pdf/dollar1117.pdf.

In recent years, administration has been reduced at a higher rate than any other area in District operations. Looking at four years of budget reductions (from 2000-2001 through next year) the highest percentage of reductions comes from administration and support staff (42% reductions). For a detailed chart, go to http://www.moundsviewschools.org/pdf/reductionhistory03.pdf.




Q: How do levies work?
A: In Minnesota, schools gain revenue from two primary sources: the state's Basic Revenue Allowance and through local property taxes. The collection of these property taxes deserves a closer look.

The county collects property taxes through a levy. These levies can take one of three forms.
1. Levies that occur without voter approval. These would include a crime levy, which can only be used for crime prevention staffing and training. Other examples are levies for health and safety, leases and alternative facilities.

2. A bond levy that requires voter approval through the referendum process. Bond levies raise money that can only be used for new construction or additions to school buildings. These funds cannot be used to run or operate schools.

3. An operating levy that requires voter approval through the referendum process. Operating levies provide money above the state allocation to be used for operational expenses such as staff salaries, supplies, heating expenses, transportation and co-curricular programs. These are the funds that it takes to run and operate schools.




Q: Who determines if voter-approval is necessary for a levy?
A: The State Legislature creates those laws and also establishes the maximum dollar amount and number of years that a levy can be applied. Currently, Mounds View Public Schools can levy a maximum of $837.38 per pupil for operating expenses for a maximum of 10 years. This revenue is in addition to the 2002-2003 Basic Revenue Allowance of $4,601 per pupil.




Q: What voter-approved levies are in place?
A: Today, the District has two voter-approved levies in progress. In May 1999, district residents passed an $80 million dollar bond referendum. This money can't be used to operate schools. The revenue can only be used to renovate all of the school buildings in Mounds View Public Schools. This process is well underway and remains on schedule for completion in 2004. In 1989, 10 years before the construction bond referendum, residents voted to approve an operating levy. Currently, that levy generates $316.08 per pupil in revenue and is scheduled to end in 2008.




Q: Didn't Mounds View get an additional $415 per student recently?
A: In 2001, the Legislature increased the Basic Revenue Allowance by $415 per student, but Mounds View Public Schools also realized a shift of $415 at the same time. That's because the Legislature also reduced our operating levy by $415 per student. At that time, the Legislature also gave school districts the right to ask voters to restore the $415 through an operating levy. In 2002, voters in the Mounds View district defeated that request.

Q: How are special education services funded?
A:The federal government originally promised to fund 40 percent of the cost for educating students with disabilities. Currently, they are not meeting that promise. While both federal and state funds are earmarked for special education programs, school districts have had to take money from their general funds in order to satisfy the mandates. This has been referred to as the “special education cross subsidy.” Last year, Mounds View Public Schools transferred $4.3 million from the General Fund to a special education fund in order to meet the mandates. By comparison, the District projects reductions of $3.1 million to balance the operating budget for 2003-2004:

2001-2002 Unfunded, but mandated, special education expenses	2001-2002 Deficit in operating funds
$4.3 million	$3.2 million

Q: What are special education services?
A:Examples of special education services include programs that assist students with autism, traumatic brain injury, visual impairments, physical disabilities, speech difficulties, hearing impairments, and students who are mildly to severely mentally impaired. In addition, services are provided to assist students who have emotional/behavior disorders (EBD). These students have difficulty developing appropriate behavior or managing their academic assignments. Special education helps them improve their ability to maintain attention in class and develop positive social relationships. Learning Disabled (LD) students also qualify for services. These students function at academic levels significantly lower than their grade level peers. Transition services are also provided to adults, 18 to 21 years old, who need assistance in the areas of home living, jobs or job training and community participation. Mounds View Public Schools is required to provide all of the above services to satisfy legal mandates. The District does not provide any special education services that are beyond those required by law.

Q: If enrollment is declining, shouldn't expenses decrease too?
A:It might seem logical to think that as student enrollment declines, our expenses should decline proportionately. This would make sense especially considering that all school districts receive money based on a ratio of per-pupil units. Unfortunately, it's not that simple. Here's why.

Regardless of declining enrollment, the District continues to have fixed costs that don't decline proportionately with enrollment. For example, overhead costs like building administration, utilities, custodial service, insurance, transportation and risk management are constant until such time as a decline would require closing a building. And more specifically, at a classroom level if a class were to decline 2-3 students you would still require a licensed staff member for the classroom.

By studying our trend, we know that declining enrollment is happening for two main reasons: lower birth rates have resulted in fewer children who live in our district, and there's very little residential movement from our district. At the same time, private school and home school enrollment has not varied significantly. The District is predicting and budgeting for enrollment declines.

More details . . .

To combat this enrollment trend, our district is welcoming students from other districts by expanding our non-resident open enrollment policy. The District is also launching a more aggressive marketing campaign to encourage enrollment and to share the good news about our schools with potential students and families.

A 9-year chart detailing enrollment and projections is available at http://www.moundsviewschools.org/pdf/decline.pdf.

A 2001-2002 report on declining enrollment is available at http://www.moundsviewschools.org/pdf/01enrollreport.pdf.

Q: Why are you continuing with construction, if student enrollment is declining?
A:I'm sure that it's confusing to many people to see construction continuing in our schools during a time when enrollment is declining. I can understand why this activity appears inconsistent with our current trend.

However, construction activities are not creating wasted space or additional empty classrooms. The vast majority of money is being spent on improving indoor air quality, enhancing safety and addressing deferred maintenance issues.

Where square footage is being added to our schools, it is a result of:

Creating structural reinforcements that will support the replacement of outdated mechanical systems with more efficient models that improve indoor air quality

Updating our schools to comply with the Americans with Disabilities Act and other code requirements

Reconfiguring front entries for increased student and staff safety

Reconfiguring existing classrooms to accommodate updated curriculum initiatives, new teaching methods and varying class sizes

Creating gymnasiums that will be used by community and school groups. The expenses for a majority of these gyms have been co-funded by cities.

Currently, the average age of our buildings is 30 years old, so all of these activities are necessary updates to our aging buildings, regardless of the possibility that schools may close if additional revenue isn't secured. In the event of school closings, the facilities will be repurposed and will benefit from the enhancements taking place. It will be to the District's advantage to continue to make certain our school buildings operate as efficiently as possible – for today and for tomorrow.

More details . . .

Currently, the School District leases about 64,500 square feet of space at an annual cost of $1.24 million. The space is in churches, office parks, retail areas, and community centers. It is used for a variety of programs such as ECFE and our Alternative Learning Center.

One possibility is that as room becomes available in our schools, programs now in leased space can be brought back into school buildings, thus saving taxpayers' money. Another possibility is that extra space could be used to house portions of our central office operation so that the District Service Center can be eliminated and sold. A Facilities Task Force has studied the issue of improving the efficient use of our spaces. A final report is available at http://www.moundsviewschools.org/pdf/facilitiesreport.pdf.

When the planning for the construction bond was done back in 1997-98, several facility studies were conducted. One was an athletic facility study, done in partnership with the municipalities. The idea was that through joint planning and cooperation, the School District and the cities all may be able to save taxpayers some money by avoiding duplication of facilities. One of the greatest needs identified in the study was for more gymnasium space. Thus, we committed to adding gym space at Island Lake and Highview because we were able to secure generous financial contributions from Shoreview and New Brighton, respectively. So, those gyms are partly paid for and used by the School District and partly by the city in which it is located. I think this is a great model of cooperation and efficiency in addressing community and school needs.

Q: Were any buses cut this year, and what were the savings to transportation?
A:As part of a transportation overhaul, we changed many routes and cut two buses this year, saving $70,000. Over the past two years (2001-2002 and 2002-2003), a total of 20 buses have been cut. Due to a bus company contract for a minimal number of buses, we could not cut any more buses this year and still save money. The current contract expires next fiscal year.

Transportation services are mandated by the state, yet the cost to provide transportation is not fully covered by the state. Parents told us last year that reductions to transportation were more acceptable than increased class sizes and reductions to classroom teachers. Considering that advice, the District decided to offer bus transportation services at the minimal level mandated by the state (free transportation for all students who live 2 miles or more). Our previous service exceeded this level.

Parents also told us they would be willing to pay a fee to continue their bus service. So we also offered a fee-for-service for those who live within two miles of school. 60 % of those families who are eligible are participating in the fee-for-service. Of those, 1/3 receive a waiver of fees, while 2/3 are paying the fee. The revenue collected from the fees helps to offset the costs of transportation. As of January 2003, the District has realized a net savings of $289,341 – considering all revenues and additional program expenses.

Overall, transportation is 5.12 % ($4,397,481) of the General Fund budget for 2002-2003.