I really don’t understand school finance. Can you help me understand where the money comes from and where it goes?

In Minnesota, school funding is a shared responsibility among local, state and federal funding sources. Here is a short explainer video: https://www.youtube.com/watch?v=ASSxa9Hn0m8

Our community values local control, and school funding needs local support to prioritize things our community values — like vocational-technical courses, and career and college readiness.

Cambridge-Isanti Schools receive less local, state and total revenue per student than the average Minnesota school district. Data released in August 2021 show that for the current school year, 2021-2022, Cambridge-Isanti Schools per-student funding ranks #311 out of 327 Minnesota school districts.  

On average districts receive about 20% of their operating budget from local property taxes, only 10% of the Cambridge-Isanti operating budget is funded by local property taxes. Cambridge-Isanti is more reliant on state funding as its primary source of revenue, which totals 84% of the operating budget.

The largest portion of a school district’s budget is the Operating Budget, which is funded by the state’s General Education Fund Formula. The Operating Fund that provides teachers, classroom supplies, co-curricular, and utilities—all the day-to-day operations of a school. When we discuss budget reductions, the district is focusing on the operating budget.

The district has other funds (or buckets) that are strictly regulated or restricted. For example, there is the Food Service Fund, which is largely funded by the Federal Student Nutrition Program and families who pay for lunches. This fund must be self-sustaining and break-even every year. Student nutrition staff, custodial services and some lunch-time supervisory staff are paid through the Food Service Fund.

Long-Term Facilities Maintenance Funds (LTFM), or building funds, are another fund that is tightly regulated and those funds can typically only be used for buildings.

Community Education (Fund 04) is outside the District’s general operating budget. Like the Food Services fund, it must be self-sustaining and receives a small local levy and fees from programs and services.

The Minnesota Department of Education sets formulas and guidelines for school district revenue. The only portions of revenue for which there is local control are local operating referendum funds and local fees. As a general rule, school districts can’t use funds from other designated areas (like Food Service or LTMF) to fund day-to-day school expenses.

School Funding in Minnesota is confusing and most people think the system is broken. There is currently a Governor’s workgroup studying school finance. They have reported a large disparity between top funded districts and the bottom 10% (C-I Schools falls in the bottom 10% in the state for school funding.)

Learn more:

Legislator’s Guide to School Finance (PDF)