73-CV-19-1242

Filed in District Court

State of Minnesota
3/20/2019 12:29 PM

Case Type: Other Civil

STATE OF MINNESOTA IN DISTRICT COURT

COUNTY OF STEARNS SEVENTH JUDICIAL DISTRICT

St. Cloud Educational Rights Advocacy

Council Court File No. 73-CV-19-1242
(Davick-Halfen)
Plaintiff,
vs. NOTICE OF MOTION AND
MOTION FOR PRELIMINARY
Tim Walz, et al,
INJUNCTION

Defendants.
__________________________________________________________________

TO: DEFENDANTS AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE, that the undersigned will bring the following Motion on for

hearing before the Court at a special term thereof, to be held at the Stearns County Courthouse in

the City of St. Cloud on the 20th day of May, 2019, at 10:00 a.m., or as soon as thereafter as

counsel can be heard.

Plaintiff moves for a preliminary injunction ordering the defendants to fund the St. Cloud

District’s full cost of special education during the 2019-2021 budget years, on conditions

described paragraph B herein. As grounds for this motion plaintiff states as follows:

Unconstitutional Failure to Provide Funding

Necessary to Meet State Standards.

The Minnesota Supreme Court has twice ruled that there is a fundamental constitutional

right to state funding sufficient to provide and pay for an education that meets all state standards.

Skeen v. State, 505 N.W.2d 299 (Minn. 1993).; Cruz-Guzman v. State, 2018 WL 3558940

(2018). The State has persistently failed and refused to comply with that requirement as to the

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St. Cloud School District. It is undisputed that special education funding provided to the district

is $13 million per year less than the funds required to meet state standards for special education.

The legislature forces the St. Cloud District to pay for this deficit by transferring money from

funds intended for all students, depriving other students of their own constitutionally protected

right to an education that meets state standards.

Special Education Deficit Unconstitutionally Denies Funding Necessary to Meet State

Standards for Non-Disabled Students with Educational Challenges and Disadvantages.

The St. Cloud District’s special education funding deficit arises in the context of a general failure

of the State to provide sufficient funding to the St. Cloud District to meet state standards for non-

disabled students with educational challenges and disadvantages including lower income

students, English language learners, students of color, students with dyslexia, and others. This

underfunding disproportionately and unconstitutionally impacts the St. Cloud District, because

the district serves far more of these students as a proportion of its enrollment than surrounding

districts, and far more than the statewide average.

Governors, Commissioners of Education, and the Legislature

Failure to Act to fix the Special Education Funding Deficit.

For over a decade, the Governor and Legislature have received official audited cross-subsidy

reports of the amount by which the state underfunds special education. Minn. Stat. § 127A.0651.

Since the reports began in 2007, St. Cloud District’s special education deficit has risen from $8

million per year to $13 million per year. No Governor’s budget has ever proposed to provide

funding to meet special education standards, nor has the legislature ever attempted to pass a

budget for that purpose. Year after year, individual school districts, organizations representing

1
E.g. https://www.leg.state.mn.us/docs/2018/mandated/180807.pdf

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school districts and their administrators and finance officers have warned the legislature that the

special education deficit is harming districts’ ability to deliver an education to students in accord

with state standards, especially those with educational disadvantages, an education that meets

state standards2. There is no prospect that anything short of judicial action will result in

compliance with the constitution.

Failure of Governors, Commissioners of Education and the Legislature to Implement

Necessary School Finance Reforms

In 2004, Governor Pawlenty appointed a 24 member task force, to determine whether

Minnesota’s education finance arrangements ensure resources are distributed “equitably” to

students throughout the state and whether Minnesota appropriately adjusts state revenue

allocations for legitimate cost differences between districts, including additional costs for “at-

risk” students3 The Education Finance Reform Task Force issued a comprehensive official

Report4, Investing in our Future, Seeking a fair, understandable and accountable, twenty-first

century education finance system for Minnesota which reported that Minnesota was failing to

cover the cost of educating disadvantaged students and which called for a reformed funding

system that reflected the cost of meeting state standards for all students. To avoid further

establishing the existence of a constitutional violation, Governor Pawlenty ordered the Task

Force to halt its effort to determine the full cost of meeting state standards. Since that time, no

effort to determine the revenues necessary to fund an education that meets state standards has

been undertaken. Relevant findings of the Task Force are found in Exhibit A to this Motion.

In 2011 Governor Dayton empaneled another Commission, the Education Finance Working

2
Eg. https://www.mnasbo.org/resource/resmgr/files/MASBO_2018_Leg_Platform.pdf
3
https://www.leg.state.mn.us/lrl/agencies/detail?AgencyID=1757
4
https://www.leg.state.mn.us/docs/2004/other/040378.pdf
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Group5. This Working Group was convened during the national financial crisis. Accordingly,

the Working Group was instructed that it could not recommend significant education funding

increases, and that its mission would be limited to simplification and other modest changes.

Despite the fact that the state share of K-12 funding had declined, the Working Group was to

“develop realistic funding options” based on the assumption that funding will not be reduced in

the near future, but will increase by a modest amount, ($20 - $200 million per year.”) Hence the

Working Group’s recommendations were not based upon cost, but on modest redistributions and

holding the line during the fiscal crisis. Once the crisis was over, no action was taken to address

the constitutional deficiencies in Minnesota’s funding system.

Rising St. Cloud Special Education Deficit.

From 2003 to 2019, the state’s underfunding of state mandated special education standards

for the St. Cloud District has risen from $4.9 million per year to $13 million per year, and is

scheduled to continue to rise further. St. Cloud District has repeatedly urged the legislature to fix

this constitutional violation (See for example, Bruce Watkins Testimony, Exhibit B), but the

legislature has done exactly the opposite, increasing the deficit and imposing more of the deficit

on districts with high needs.

Education Deficit Irrationally Imposed Despite St. Cloud District’s High Percentage of
Students with High Educational Needs.

Among the largest twenty school districts in Minnesota, St. Cloud District has

the second highest percentage of English Language Learner (ELL) students (24%) second only

to St. Paul. It has the second highest percentage of lower income students (61%), and it has the

highest percentage of special education students (20%). With respect to all of these student

5
https://www.leg.state.mn.us/lrl/agencies/detail?AgencyID=2038
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groups, the state’s funding is not adequate to cover the cost of meeting state standard. The

special education deficit necessarily impairs St. Cloud District’s ability to provide an education

that meets state standards for these other students.

St. Cloud, has 10,000 students, and seven surrounding comparison districts have 18,000

students combined. Yet, St. Cloud District has 9 times as many ELL students, as the surrounding

districts combined; St. Cloud has ten times as many black students as the surrounding districts;

St. Cloud’s free and reduced lunch rate is nearly three times the surrounding districts and St.

Cloud has 2081 more free and reduced lunch students than the districts with 18,000 students

combined. The special education deficit is undermining the District’s ability to provide what

those students need to meet state standards and shifting a disproportionate financial burden on a

single school district.

Greater Deficit Imposed on District with Higher Funding Needs.

Despite St. Cloud Districts vastly higher funding needs, the State has tailored the special

education reimbursement scheme to disadvantage districts like the St. Cloud District

exacerbating the constitutional violation. For example, neighboring Sauk Rapids district’s

average special education deficit for serving its 863 special education students is $2899 per

disabled child. As of the 2017 FY report the average deficit for delivering mandated special

education standards to 2078 disabled children in the St. Cloud District was $6579, or more than

two times higher than the per student deficit imposed on Sauk Rapids. There is no rational basis,

nor any compelling state interest for this system.

Consensus that the Constitution is Being Persistently Violated.

Organizations representing school districts and their leaders have repeatedly warned the

legislature that the current funding system is violating the constitution by failing to provide

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adequate funding sufficient to meet all state standards including: Association of Metropolitan

School Districts (“Minnesota’s education funding system does not provide adequate, equitable

or reliable resources for our schools. important work remains if we are to achieve the “thorough

and efficient” education funding system envisioned in the State Constitution.” Minnesota

Association of School Business officers (“It is critical that the State continue to stabilize funding

and appropriately recognize education as a priority, given its constitutional obligations.);

Minnesota School Boards Association (“eliminate the cross subsidy of special education

programs by general education funds. The state shall assume the responsibility of supplying the

additional revenue to fully fund the gap between the deficit in federal funding and the actual

special education costs incurred by school districts.”).

Special Education Deficits Impair Efforts

to Educate Non-Disabled Students.

Minnesota’s Association of School Business Officers, the organization representing the

professionals charged with budgeting, warns:

Because these [special education] expenditures are mandated in state and federal
law, districts must subsidize unfunded costs of special education by allocating
[the amount of the cross-subsidy deficit] from general education resources that
would otherwise be available for regular program instruction. Increasing special
education funding will have an equal and reciprocal impact on regular program
resources, freeing up money for regular program needs.

Fundamental Right
Underfunding Does not Serve Compelling Interest

The current funding system interferes with a fundamental right—the right to funding

adequate to deliver an education that meets all state standards to students with higher educational

challenges and needs. The funding system is not tailored to further any compelling state

interest.

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Likelihood of Prevailing on the Merits.

The State’s failure to fund special education to meet state standards is undisputed and

acknowledged by official publication of the Minnesota Department of Education. The Supreme

Court has twice ruled that there is a fundamental right to funding at a level that meets state

standards. Since 2003, the total shortfall imposed on the St. Cloud district as the result of

intentional underfunding of special education is over $144 million. This shortfall exacerbates

the state’s failure to fund an education that meets state standards for disadvantaged students who

are not disabled and is a major contributing cause of the achievement gap.

Irreparable Harm.

The harm to students caused by funding insufficient to educate all students to state

standards greatly outweighs the small burden imposed on the state legislature. Thirteen million

dollars is less than three hundredths of a percent of the state budget. Provided that the additional

funding is used to improve education for students who are currently failing to receive an

education that meets all state standards, the new funds will provide a significant boost to the

education of low-income students, students of color English language learner, and students with

dyslexia by requiring that the new funds be allocated to implement enhanced initiatives of

proven value for those students as determined by the superintendent and board of education

subject to approval by the Court. Not only will these funds benefit thousands of students

currently deprived of the educational funds needed to provide them with an education that meets

state standards, but the program so implemented can set an example for future funding

corrections by the state to other districts similarly impacted by the deficit.

WHEREFORE, Plaintiff moves for a preliminary injunction as follows:

A. Ordering the Defendants to provide the St. Cloud School district with full funding of the
District’s special education expenditures made in compliance with state and federal law

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effective with the 2019-2020 school year;

B. In lieu of a bond, requiring that these funds be released to the St. Cloud District only
upon submission by the St. Cloud school district of a plan to use the new funds to
improve district efforts to meet the educational needs of students with higher educational
needs, that is to lower income students, students of color, English language learners,
students with dyslexia, and such other students who need additional resources to meet
state standards, subject to approval by the court after comment from the parties.

C. Requiring the defendants to develop an implement a procedure to establish the cost of

providing an education that meets state standards to St. Cloud District students – as well
as other districts with elevated percentages of students with high educational needs, and
to provide that plan to the Court by October 1, 2019.

Any and all supporting pleadings will be filed under separate cover within the timelines
as set out in the Minnesota Rules of Civil Procedure.

Dated: March 20, 2019

RINKE NOONAN

/s/ Gerald W. Von Korff

Gerald W. Von Korff
Suite 300 US Bank Plaza Building
1015 W. St. Germain St.
P.O. Box 1497
St. Cloud, MN 56302-1497
(320) 251-6700
(320) 656-3500 fax
Email: jvonkorff@rinkenoonan.com

ATTORNEYS FOR PLAINTIFF

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Exhibit A:  School Funding Task Force 
Selected School Finance Recommendations

 Must address evolving demographic change: Unless steps are taken now
to address evolving educational, demographic and economic conditions,
Minnesota may slip in its level of academic success and achievement.

 Additional Staff Resources Required: Minority student populations

require additional staff resources to minimize their achievement gap.

 ELL Increases. The number of Limited English Proficient students has

increased dramatically over the last decade.

 Lower Income Students Require Increased Resources. That rising

numbers of lower income students requires additional educational services
and additional school support services, including school readiness, health,
counseling and academic advising.
 Cover Full Dollar Costs. School funding should provide an
annual revenue amount sufficient to cover full dollar costs of
ensuring Minnesota public school students have an opportunity to
achieve state specified academic standards. These standards are
connected to a comprehensive instructional program offered by
schools.

 Cover Added Costs Beyond District Control. This formula

should take into account the added costs included with relevant
characteristics of each student (e.g., disabilities, poverty, school
readiness, English language learners, and student mobility). In
addition, Minnesota’s new funding formula should compensate
districts for cost factors beyond their control (e.g., student
population sparsity, technology access, and higher costs of living).

 Fund Early Years—Provide More Learning Time. For large

proportions of students to achieve at the Minnesota academic standards
level, school funding will have to be directed to provide (1) earlier-in-the-
life-of-a-student instruction primarily in the form of greater individualized
instruction in the primary grades (kindergarten through 3rd grade) and (2)
extended school day, school year, and school career exposure to systematic
instruction.

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EXHIBIT B
STATE OF MINNESOTA Case Type: Other Civil
IN DISTRICT COURT
COUNTY OF STEARNS
SEVENTH JUDICIAL DISTRICT

St. Cloud Educational Rights Advocacy Court File No. 73-CV-19-1242

Council, (Davick-Halfen)
Plaintiff,
vs. Report and Affidavit of Bruce
Watkins
Tim Walz, Governor and State of Minnesota,
et al.
Defendants.

Introduction. I’ve been asked to provide a narrative that may be used to inform
the Court regarding the issues presented in the suit brought by St. Cloud
Educational Rights Advocacy Council (SCERAC). I joined the organization
because I feel very strongly that Minnesota’s school finance system needs to be
reformed so that we in education can provide every student the education that each
student deserves. Overwhelmingly Minnesota educators feel that way. As a
profession, we want our students to succeed, all of them, whether they come from
families of means or families with lower incomes, whether they start out in life
with challenges, and whatever their race or ethnicity. The vast majority of us feel
frustrated that the state of Minnesota is not providing us with the resources we
need to do the job we were trained to do.

My Background. After obtaining my degree, I taught high school in Proctor,

Minnesota and then became a principal. I served as an assistant superintendent and
served as director of operations in the Duluth School District. I was hired as
Superintendent of St. Cloud District 742 from 2004 through 2008. When the new
superintendent resigned, I was hired by the district a second time from 2010
through 2013. After retiring from the district, I have been hired to serve as interim
director or superintendent when a district or charter school has an immediate need
for leadership. That has given me additional exposure to other districts and
schools. I served as executive director of the Nova Classical Academy in 2014-
2015. I worked on a teacher evaluation project for the St. Paul Conservatory. I
then served as interim superintendent for a full year each in the Elk River and Sauk
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Rapids School Districts to lead those districts while they searched for a permanent
superintendent.

Currently I am executive director of Partners for Student Success which seeks to

unite the St. Cloud Community in partnership to promote student success. My
opinion here is not offered on behalf of that organization, but represents my own
professional opinion. Partners for Student Success seeks (among other objectives)
to marshal community resources in support of school districts efforts to meet the
needs of students with educational disadvantages. Community efforts are essential
to the success of any school district, and in particular efforts to meet the needs of
students with educational disadvantages. However, in a properly functioning state
system, the community would be working to supplement an adequately funded
system. Instead, community organizations are working against the background of
a grossly underfunded system and attempting to make up some of the deficit.

Experience with School Budgeting: During my career I have had the direct and
indirect responsibility for budgeting in four substantial school districts, Duluth, St.
Cloud, and one year each for Elk River and Sauk Rapids. Budgeting is a team
process, but my role has included leading administrative teams (principals and
directors) through the annual process of making the difficult decisions required in
producing a budget in what is a scarcity environment. I have been responsible for
the final budget product as superintendent in three districts. I have been
responsible for labor negotiations as superintendent, and after my retirement I was
retained for several budget rounds to represent the St. Cloud District in labor
negotiations with its teachers. I’ve been involved in the budget process as a
principal at Proctor and as leader of a charter school.

Opinion Summary. Minnesota’s school funding system does not provide

sufficient funding for the St. Cloud district to deliver an education that meets state
standards for the students described in the Complaint as students with educational
disadvantages. The deficit in special education is the clearest example of this
underfunding. That deficit throughout my career as superintendent has
compromised the ability of districts to deliver an education that meets state
standards. However, the St. Cloud District’s deficit has been among the highest
special education deficits in the state measured on a per student basis. The special
education deficit has been a major component of the District’s funding challenges
over the last two decades, compromising its ability to deliver necessary programs.
However, there are other major funding insufficiencies as well.

The larger problem is that Minnesota does not base its school funding on actual
cost of the programs and initiatives necessary to deliver an education that meets

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state standards for children with educational disadvantages. Many of the

unaddressed cost components are listed in the complaint. (See Complaint section
entitled Funding for Improving Teaching and Instruction-noted below.)1 These
include more counseling and other counseling support staff, additional licensed and
non-licensed instructional staff to differentiate instruction. They include additional
learning time for the students who are behind, especially in the elementary grades,
more instructional time in teaching day, and more instructional days in the school
year. In St. Cloud, they have included implementation of a new and growing
English language learner program and developing the capacity to support English
language learners as they integrate into the regular classroom.

All of these items, and more, are essential in shaping a strong instructional
program that can successfully meet the needs of the students that Minnesota is
leaving behind, including for St. Cloud. Unfortunately, it is very common for
school districts, including St. Cloud, to cut back on already insufficient
expenditures when forced to make budget cuts. However, these investments in
making teaching better and more effective are absolutely critical to realizing the
educational improvement that St. Cloud needs to meet the needs of the students
who are not meeting state standards.

1
a. The ability to recruit, retain and compensate properly trained teachers with
strong educational backgrounds, who believe in and relate well to their students b.
Creating conditions of employment such that highly qualified teachers will work
with students who present teaching challenges. c. Development of high-quality
rigorous curriculum – and the classroom materials that implement that curriculum
that inspire students. d. Differentiated instruction supported with staffing and
instructional materials. e. When appropriate, small group instruction; co-teaching
where appropriate f. Onboarding new teachers with significant ongoing training
and mentoring targeted to how the district effectively teaches so that students will
learn. g. Significant ongoing professional staff development of high quality
focused on strategies that work and focused on teaching and learning the
curriculum. i. Regular and frequent collaboration time in which teaching staff
design and improve teaching strategies that address the needs of students who are
not yet thriving in the system. j. High expectation for teachers and teaching; high
expectations for building leadership; mentoring and quality observation and
supervision. k. Outstanding instructional leadership capable of implementing
strategies that work. l. Consistent observation by lead teachers, and high-quality
ongoing mentoring.
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In the April 27, 2018 Minneapolis Tribune2 the paper reported a phenomenon that
is all too common:

Metro-area school districts are facing one of the worst budget-

cutting seasons in recent years, and they plan to lay off more
than 240 teachers and other staff to save money. In the metro
area, 26 school districts are confronting a total shortfall of more
than $108 million for the 2018-2019 school year — the highest
amount since 2011, according to a recent survey by the
Association of Metropolitan School Districts. Because staffing
makes up a large portion of budgets, districts are relying on job
cuts to balance their budgets. “It’s the largest we’ve seen in a
few years,” said Scott Croonquist, the group’s executive
director. “It’s more districts, and more districts facing larger
shortfalls than we’ve seen in a time.”

Minnesota public school funding has resulted in a continuous cycle of cuts and
crisis in which districts struggle annually to limit cuts to essential programs. In St.
Cloud each budget year we started from an inadequate funding base. In the
following budget year, our main challenge would be to prevent further cuts as a
result of pressure from inadequate state increases and excessive cost increases.

In a state appropriation year like 2019, the state process for education begins with a
governor’s budget that often proposes insufficient funding increases to even
maintain existing programs without cuts.

The legislative appropriation does not make allowances for staff compensation
increases and separate allowances for necessary programs. Any ultimate
appropriation for the biennium essentially gives the district a total allowance in our
general fund that must meet both staff compensation increases and other cost
increases. Our budget and bargaining processes thus pit staff compensation against
other cost increases, and the two are making claims on a funding allocation that is
inadequate. The teachers advance an understandable position that teachers are
underpaid, that school funding has failed to keep pace with inflation, and that
teachers must keep pace with other professions and other districts. The District
management however is faced with protecting necessary programs and class size.

2
http://www.startribune.com/twin-cities-schools-cutting-200-teacher-school-staff-
jobs-as-they-face-massive-shortfalls/481115711/
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This process, of pitting teachers and other staff against district programs, class size,
and initiatives required to meet state standards is exemplified in the above article.
Districts start from a budgetary base that is insufficient to meet staff’s legitimate
expectation for fair compensation increases and insufficient to meet inflationary
cost increases in existing programs. In these discussions, it becomes almost
impossible to budget for the program expansion necessary to meet state standards
for the children that are getting left behind by Minnesota’s educational system. If
we are going to solve Minnesota’s achievement gap, the state must come to grips
with this destructive cycle. The state budget must account for the cost of
attracting, retaining, developing and fairly compensating its educators and support
staff. But it must also account for the cost of providing an education that meets
state standards for students that our system is leaving behind by correlating the cost
of providing an education that meets standards and assuring that districts can use
funds to make needed program improvements.

Importance of Funding Efforts to Intervene Early so that Students Don’t Stay

Permanently Behind

I want to emphasize that to genuinely implement a program that transforms

education for the students we are leaving behind, we need more professional staff
development, more active supportive supervision, more teacher collaboration and
preparation time, and time to prepare school strategies that work for students
attending that school. These are initiatives that come with significant costs, and in
the current funding environment it is a tremendous challenge to find the funds to
even do these things at minimal levels.

It is very important to provide students who are behind with extra learning time,
either during the school day, or in extended summer learning, or both. To do these
well, training, curriculum development and transportation expenses must be
covered, as well as the funds to pay teachers and support staff. It is unrealistic to
expect these students to make up ground in the same amount of time as we provide
the students who are already on track. When students are behind, they need
differentiated instruction to catch them up as soon as possible, and that requires
more teachers and staff. Otherwise, as students move along in school, they wind up
attending classes where the teacher is delivering instruction and programming that
is beyond their ability to comprehend. The longer this goes on, the more difficult it
is for them to make progress.

To illustrate this point, we’ve inserted into this report, tables showing the
proficiency scores for District 742 for white and black students in 4th grade. A
substantial number of the students classified as black are English language

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learners, so the data must be read in that light. Both charts also include the scores
of students who qualify for special education (about 20% of all students). The
chart reports four categories of performance, with “does not meet” being the lowest
performance level.

Fourth grade is a target year for Minnesota’s reading standards. The 4th grade
sores illustrate the level of challenge and the difficulty of providing the quantity
and quality of interventions necessary under Minnesota’s current funding system.
It is possible substantially to improve these results, but it is going to take more
resources and a system to assure that the additional resources are targeted to the
students who are behind. Clearly, unless Minnesota enables substantially
increased efforts involving comprehensive improvements, and funds those efforts,
St. Cloud will not meet state standards for 4th graders.

Proficiency  White  Gr 4 

Does 
Partially 
Subject  Exceeds  Meets  not 
meets 
meet 
Math  Count  105  123  46  43 
Percent  33.10%  38.80%  14.50%  13.60% 
Reading  Count  55  137  63  63 
Percent  17.30%  43.10%  19.80%  19.80% 

Proficiency  Black  Gr 4 

Does 
Partially 
Subject  Exceeds  Meets  not 
meets 
meet 
Math  Count  15  43  33  108 
Percent  7.50%  21.60%  16.60%  54.30% 
Reading  Count  6  37  45  111 
Percent  3.00%  18.60%  22.60%  55.80% 

The next two tables display proficiency results on the Minnesota Comprehensive
Assessments for the last grade tested in high school – 10th grade for reading and
11th grade for math. St. Cloud’s score results are similar to the results shown for
the statewide data. The state and the district are not providing sufficient funding
to catch students up. These “does not meet” scores are significant symptoms of
the need for substantial improvements in Minnesota’s system of public education.

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Proficiency  White  HS 

Does 
Partially 
Subject  Exceeds  Meets  not 
meets 
meet 
Math  Count  60  125  65  78 
Gr 11  Percent  18.30%  38.10%  19.80%  23.80% 
Reading  Count  105  129  65  39 
Gr 10  Percent  31.10%  38.20%  19.20%  11.50% 

Proficiency  Black  HighSch 

Does 
Partially 
Subject  Exceeds  Meets  not 
meets 
meet 
Math  Count  5  26  16  219 
GR 11  Percent  1.90%  9.80%  6.00%  82.30% 
Reading  Count  10  36  56  208 
Gr 10  Percent  3.20%  11.60%  18.10%  67.10% 

As superintendent in St. Cloud, I helped launch an effort to improve reading scores

at Talahi Elementary. When the District made an effort to push up reading
performance at Talahi, it required significant resources. We had to pay for
additional teacher compensation, additional planning and preparation time, co-
teaching, and instructional coaches. Those expenses were beyond the district’s
budget to be replicated across the district, and to be replicated in math and other
domains. A program like this cannot be conducted on a temporary grant or
temporary deficit funding. It needs to be funded sustainably so that it becomes part
of the standard operating procedure of the school.

The Special Education Cross Subsidy

Special education funding is one notable example of Minnesota’s failure to fund

the cost of meeting state standards. The challenges for a district like St. Cloud are
especially great, and they are accurately described in the Complaint. When I
joined the District as superintendent, St. Cloud had the highest 2004-2005 special
education deficit (per student) in the state for regular school districts, $5 million
per year. If you divide the deficit by the number of students in the district that
equaled about $500 per student. This deficit significantly impaired our ability to

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sustain and expand programs to meet the needs of our ever-growing number of
students from lower income homes, immigrants, English language learners. This
deficit was a major contributing factor to the district’s inability to maintain the
budget for other aspects of our programs at levels maintained by comparable
school districts.

In 2007, our district and Board, joined with other districts and state education
organizations to make a push for additional special education funding. I’ve
attached a copy of my testimony to a legislative committee as part of that effort.
Our efforts to solve this problem in St. Cloud has involved regular presentations to
legislators, support of resolutions by organizations like AMSD and MSBA, and
regular inclusion in the District’s legislative position urging full funding of special
education. The joint efforts in 2007 resulted in a modest improvement in the
special education cross subsidy, but that improvement was only temporary, and
after several years, the cross subsidy for all districts has risen substantially again.

With the support of the board of education, we tried mightily to attempt to control
that deficit. The District conducted a series of internal and outside independent
studies. We attempted to reduce staff, which in turn increased the caseload of
special education teaching and support staff, hoping to realize efficiencies. We
implemented efforts to seek insurance reimbursement where available, to make our
provision of transportation more efficient. Even with those efforts, our deficit rose
by several million dollars as a result of a growing state deficit in special education
funding.

As we implemented these reforms, the district received expression of concern from

both special education and non-special education teachers that our reforms had
gone too far. As we implemented these reforms, our special education deficit, also
called the cross subsidy continued to increase, but the rate of increase diminished.
Other districts, including Minneapolis and St. Paul, passed us in special education
deficit per student, as their deficits grew far more rapidly.

As other districts attempted to control their special education deficits, the

Minnesota Department of Education issued a guidance calling for districts to
reduce their special education caseloads. The effect of that guidance was to push
districts, including St. Cloud, to increase special education staffing and in St.
Cloud partially to reverse the efforts to control special educational spending. The
Department’s initiative may well have been justified, but it was not accompanied
by financial relief. As the Department pressed local districts to increase staffing,
and thus spend more, the legislature concurrently passed a new and complex
special education reimbursement formula that capped growth in special education

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reimbursement. The result was to penalize St. Cloud for its efforts to keep down
spending and then to meet Departmental guidance’s to push special education
spending up.

Fully funding St. Cloud’s special education expenditures would facilitate a

dramatic improvement in the District’s ability to meet the needs of other students
who have educational disadvantages.

St. Cloud District’s Need to Maintain Competitiveness

It is important to recognize that in our current public-school environment every

school district in the St. Cloud region must pay close attention to maintaining its
competitiveness in providing education that meets the needs of students who are
economically mobile and who are not educationally disadvantaged. In every
district that I led, and certainly in St. Cloud, we paid close attention to making sure
that we were not sacrificing the quality of the programs that addressed the needs of
more advanced students. The basic structure of Minnesota’s funding formula is
that meeting the needs of students with educational disadvantages costs
substantially more per student than the state provides in funding, even with the
very modest compensatory funding provided to educate those students. A district
needs to take some of the revenue paid on behalf of educationally advantaged
students and transfer that “profit” to cross-subsidize the education of students who
are costlier to educate. This problem would not exist if the state provided learning
linked funding as the 2004 School Funding task force referred to in the complaint
recommended.

St. Cloud has been able to maintain high quality attractive programs for more
educationally advantaged students. As the district has become more
demographically diverse, and as our number of lower income families has grown,
other families tend to question whether the growing challenge will impair the
district’s ability to educate their children. To address that concern, it is important
that the state provide cost-based learning linked funding of the full cost of
providing an education that meets state standards.

If allowed to continue, the current funding system would stimulate a downward

spiral that can lead to economic and racial segregation in the region, and reduce the
ability of the St. Cloud District remain financially viable, in terms of its ability to
attract students who are less costly to educate. For this reason, it is critical to the
future of our community, as well as the district’s ability to educate students to all
state standards, that the State fund the education of students based upon what it
actually costs to deliver education that meets all state standards.

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