Special education funding gap remains, Minnesota lawmakers no closer to special session

Ten days after Minnesota lawmakers left dozens of issues in the lurch when they adjourned the legislative session without action on major bills, they appear no closer to coming back.

Funding for special education services was among the biggest line items in the $8 billion grand bargain that lawmakers failed to get across the finish line. Lawmakers had broad agreement to address a gap in special ed funding, but the House and Senate ended the session $250 million apart on that issue.

A gap exists between the cost of special education services that school districts are required to provide and the amount that the federal and state governments give them. That gap, known as a cross subsidy, forces districts to shift money from elsewhere to cover special education costs, meaning cuts to other programs or requesting property tax increases from voters.

"That’s a big chunk of money that’s coming out of our general ed fund that we’re spending for something that both the state and federal government should take care of," Farmington Area Public Schools Superintendent Jason Berg said in an interview. He said the district's cross subsidy is around $8.5 million for the current school year.

In early May, school groups banded together to push the special education funding issue. Their efforts appeared to pay off: in the final days of the legislative session, House Democrats and Senate Republicans were both proposing hundreds of millions of dollars to partially close the funding gap.

But the final offers traded between the House and Senate, since provided to FOX 9, show that the Senate proposed $911 million over the next three years. The House countered with $661 million over the same period, preferring to use the rest of the available money on other education programs.

Berg said addressing the special education cross subsidy would provide the biggest benefit to many districts.

"When people talk about providing additional mental health, additional counselors, there’s been a lot of talk about literacy professional development, we would have enough funding to do those sorts of things without it being earmarked if the special ed cross subsidy wasn’t there for us," he said.

Lawmakers also failed to pass $4 billion in tax breaks, $1 billion for health and human services, $450 million for public safety, and hundreds of millions of dollars in transportation funding.

A week and a half after the regular session ended, there has been no progress toward a special session. DFL Gov. Tim Walz and Republican senators gave different perspectives about how close the sides are to an agreement.

Walz said he was disappointed that Senate Republicans do not share his optimism about being close to final deals.

"I think we’re on the one-yard line. It sounds like they want to take a knee," Walz told reporters at an event near the Capitol on Thursday. "I do not want to take a knee. Just finish this thing. Get 'er done."

A meeting is scheduled with House Speaker Melissa Hortman and Senate Majority Leader Jeremy Miller on Friday, Walz said.

State Sen. Zack Duckworth, a member of the education conference committee, said he didn't know of any negotiations on K-12 funding since the session ended. Constituents are not clamoring for a special session, he said.

"As you can imagine, it’s a mixed bag," said Duckworth, R-Lakeville. "We have some constituents who say, 'Hey, it’s not a budget year, stop spending money. I know you’ve got a surplus. We want you to reduce our taxes and let us keep more of our hard-earned money so we can provide for our families.'"

Berg, whose schools are in Duckworth's Senate district, said Walz and lawmakers should reach agreements and have a special session.

"We have a saying around here that the consequence for not doing your work is doing your work. I fully believe that the legislators have work that’s undone," he said.