Tim Walz considers shift away from school referendums to fund Minnesota schools

Gov. Tim Walz is aiming to overhaul the way Minnesota funds its schools, putting more responsibility on the state and making local referendums “either rare or extinct.”

As he finalizes his first budget, the DFL governor said he’s focused on reversing what he sees as a disturbing trend: a leveling off in state support for education that’s putting more pressure on local funding and widening gaps between wealthy and poor and between metro and outstate schools. Walz declined to release the specifics of his plan. But he said his budget — due by Feb. 19 — will include several proposals that would “start to set the groundwork” for a shift away from the bonding and operating referendums that currently add up to more than $1.6 billion in school funding each year.

“When people are asked to tax themselves for education, they overwhelmingly say yes in Minnesota,” he said in an interview last week. “The problem is that it’s not the best or most efficient way to do it, and I’m not sure we get the most bang for our buck. It creates haves and have nots.”

Walz’s interest in the idea is already drawing support from some school administrators and education groups, particularly those representing rural communities and school districts that lack a broad property tax base. But it’s also prompting caution from others who say shaking up Minnesota’s education finance system would further burden taxpayers, erode local control and potentially leave some districts worse off.

“Just about every education association or group would agree that, in an ideal world, the state would provide 100 percent of the funding and school districts would not have to rely on operating referendums,” said Scott Croonquist, executive director of the Association of Metropolitan School Districts. “But the reality is: We are light years away from that.”

The state now provides about two-thirds of the revenue used to fund Minnesota’s public schools, while local districts, through voter-approved operating and bonding referendums, pick up about 27 percent. The remaining 6 percent comes from the federal government.

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