How Minnesota spending on education might change under new state budget, federal threats

The Minnesota Legislature has a May 19 deadline to write a budget that will fund the state government over the next two years.

There is a glum feeling around the frenetic crafting of the budget, largely because the state is forecast to move from a surplus in the next two years to a $6 billion deficit for the two-year budget cycle that begins in July 2027, according to the Minnesota Management and Budget (MMB) department. 

In making their dour forecast, state officials cited factors ranging from tariffs to the uncertainty of federal funding. 

Perhaps nowhere is that pessimism felt more than in funding kindergarten through 12th grade education. Under Gov. Tim Walz and DFL control of the House and Senate, education spending from the state’s general fund shot up nearly 25% from about $9.9 billion in the 2022 fiscal year to an expected $12.3 billion this fiscal year, according to MMB. 

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The DFL pushed through a major increase in per-pupil spending. They funded breakfast and lunch each school day for all of the state’s 850,000 students. Now DFL leadership is resigned to finding places to cut. 

“This is an extremely hard time,” Mary Kunesh, DFL-New Brighton, said at the Senate Education Finance Committee meeting she chaired Tuesday. “It is heartbreaking in a lot of different ways in a lot of different areas.”

Education spending makes up 38% of the almost $66.6 billion biennial budget proposed by Walz. Here is what to know about the spending debates as legislative committees draft their own proposals, which will be sent along this month to the House and Senate floors. The House and Senate and governor will eventually have to settle their differences over a budget plan that needs to be in place by the end of June.

Who wants what on education spending is surprising

Using MMB’s February forecast as a starting point, Walz wants to trim $240 million from the education budget, leaving the department with $25.5 billion for the next two years, according to figures provided by Senate Fiscal Analyst Jenna Hofer. 

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The Senate has targeted no K-12 cuts the next two years, but a $687 million reduction in 2028 and 2029. 

If DFLers are willing to roll back at least some education spending, then surely the House, with its 67-67 DFL-GOP tie, wants steeper reductions?

Actually, no. House Speaker Lisa Demuth, R-Cold Spring, and Speaker Emerita Melissa Hortman, DFL-Brooklyn Park, want to increase education spending by $40 million, and seek no cuts in 2028 and 2029.

Also, Demuth and Hortman have agreed on earmarking this $40 million to the Read Act, a law Walz signed in 2023 to give children resources to read at or above grade-level expectations. 

Walz’s budget recommendation for the Read Act sets aside less than half of that —  $16 million over the biennium. But Demuth said in an interview that she wants more money to train current teachers, plus cash to hire subs as those teachers are trained. 

“We really do need as a state to prioritize student outcomes,” Demuth said, lamenting Minnesota’s stagnant scores in National Assessment of Educational Progress reading tests. 

The split House is already a wrinkle to crafting a gargantuan budget bill. That Republicans are fiercely defending some spending, and may even want more money, is another layer of complexity. 

A tighter budget means reassessing charter schools

In 1992, Minnesota became the first state to have charter schools, which are publicly funded schools with independent curricula. There are now 181 charter schools in Minnesota, and they receive roughly the same money as traditional public schools.

Walz’s recommendation would tweak that. The governor wants to zap $20 million in long-term maintenance for charter school facilities, according to his budget proposal. Under state statute, charter schools cannot own their building directly and often use a nonprofit affiliate as the landlord, with the school paying rent. 

Also, the governor wants to save $21 million over the next two years by eliminating a reimbursement charter schools receive when they enroll a special education student. 

The state would still pay for about 90% of charter schools’ special education program costs. But lawmakers have expressed reluctance about creeping charter school cuts.

“I am kind of flabbergasted,” said Sen. Rob Farnsworth, R-Hibbing, at the Senate Education Finance Committee hearing. “I have two charter schools in my district. I have kids succeeding at charter schools who would not be succeeding at public schools.”

Short-term cuts to charters as well as transportation cuts for private school students would result in long-term costs from students who are eventually forced to return to their neighborhood public school, Farnsworth warned.

Republicans weren’t the only ones with questions about the proposed charter school cuts. Heather Gustafson, DFL-Vadnais Heights, asked if charters would be forced to do more private fundraising to sustain themselves. 

DFL will fight to keep universal school meals

At a House Education Policy Committee hearing Tuesday, Rep. Lucy Rehm, DFL-Chanhassen, said that when she goes door-knocking and asks people what the state government has done for them, constituents often say, “You passed free school meals and we love that.”

Rehm and other DFLers spoke passionately about their support for school meals as a fundamental right.

“We don’t means test for a desk, we don’t means test for books and we shouldn’t means test for food,” Rep. Cheryl Youakim, DFL-Hopkins, said in an interview. 

But some Republicans say the program, which started in 2023, is quite literally a waste.

“Kids are taking food and throwing it in the garbage,” said Rep. Walter Hudson, R-Albertville, at the Education Policy Committee hearing. Other House Republicans, including Demuth, have made this point, citing conversations with school officials as their evidence. 

Rep. Andrew Myers, R-Tonka Bay, has a bill that would continue universal free breakfast but limit lunch to students from families less than 500% above the federal poverty level, which pencils out to $156,000 a year. 

Myers said the bill, which was submitted for consideration in budget talks, would save the state $170 million over the biennium. 

Retaining free lunch and breakfast for each student is forecasted to cost the state $658 million over the next two years, with the U.S. Department of Agriculture’s National School Lunch Program adding $676 million toward free meals. That means over half of the state’s school meals program is currently funded by the federal government.

But the Trump administration and congressional Republicans are eyeing massive cuts to the Agriculture Department, including their own measure to stop funding meals to kids of families that are above a certain income threshold. 

Federal education funding in limbo

Remember those National Assessment of Educational Progress test scores that Speaker Demuth is concerned about?

The test for “the nation’s report card” is administered by the U.S. Department of Education, a federal agency in which half its employees were placed on administrative leave last month. 

In prior budget cycles, about 15% of all Minnesota K-12 funding has come from the federal government. 

Youakim said the state Legislature may be forced into a special session when it learns of what cuts in Education, Agriculture and other federal departments are made permanent. 

“We just don’t know what’s happening at the federal level,” she said.

This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

Editor’s note: Matthew Blake wrote this story for MinnPost.com.

This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.