SF3618

Purpose

• Change how compensatory education funding is calculated for Minnesota school districts in response to changes in the Supplemental Nutrition Assistance Program (SNAP) and related county costs.
• Align school district revenue with SNAP changes and require the state to estimate certain costs and appropriate funds to cover those changes.
• Update the state and local financing framework more broadly, including modifications to income tax-related revenue and county program aid to offset SNAP-related county costs (as referenced in the bill’s scope).

Main Provisions

• Compensatory education revenue calculation (section 126C.10, subdivision 3, amended):

  • For fiscal years 2024, 2025, and 2026:
  • A district’s compensatory education revenue for each building equals the formula allowance minus 839 times the compensation revenue pupil units (per section 126C.05, subdivision 3).
  • For fiscal year 2027 and later:
  • A district’s compensatory education revenue for each building equals the product of:
    • the number of compensatory pupils,
    • the building’s compensatory allowance, and
    • the statewide compensatory SNAP adjustment factor.
  • Special cases for program changes:
  • If a district contracts with an alternative program under section 124D.69 and that contract changes before the school year starts, the compensatory revenue generated by pupils in the program is paid to the district contracting with the alternative program for the current year (not the prior year).
  • If the area learning center’s fiscal agent district changes before the school year starts, the compensatory revenue is paid to the new fiscal agent district for the current year (not the prior year).

• Minimum total compensatory revenue floors:

  • For fiscal year 2026, if the sum of the amounts in paragraph c is less than 838,947,000, the commissioner must proportionally increase revenue to each building so the total statewide revenue equals 838,947,000.
  • For fiscal year 2027 and later, if the sum of the amounts in paragraph c is less than 857,152,000, the commissioner must proportionally increase revenue to each building so the total statewide revenue equals 857,152,000.

• Statewide SNAP adjustment factor (starting in 2027):

  • The Department of Education must calculate a statewide compensatory SNAP adjustment factor.
  • The adjustment factor equals 1 plus the ratio of the compensatory loss adjustment to the total number of pupils identified through direct certification for that year.
  • Compensatory loss adjustment equals the greater of zero or the difference between:
  • the number of pupils identified through direct certification based on SNAP participation in fall 2024, and
  • the number of pupils identified through direct certification based on SNAP participation in the fall of the previous fiscal year.

• Direct certification and SNAP-related terminology:

  • The provisions reference direct certification counts, compensatory loss adjustments, compensatory pupils, and the direct certification counts used to determine the adjustment factor.

How it Changes Existing Law

• Introduces a dynamic, SNAP-adjusted funding formula for compensatory education revenue beginning in 2027, replacing or altering the prior fixed-per-building approach for many districts.
• Builds in floor funding protections so total compensatory revenue cannot fall below specified statewide totals in 2026 and 2027+.
• Ties a portion of district funding to statewide SNAP metrics via a new adjustment factor, calculated using direct certification data and SNAP participation counts.
• Adds mechanisms to ensure revenue follows the current year in cases where districts contract with alternative programs or area learning centers, rather than staying with prior-year arrangements.
• Expands state financing considerations to include a broader context of SNAP changes, potentially affecting county costs and related program funding.

Significant Changes to Existing Law (highlights)

• New formula structure for compensatory education revenue, with:
  • 2024–2026: per-building revenue based on a formula allowance minus a multiple (839) of compensation pupil units.
  • 2027 onward: per-building revenue based on compensatory pupils, building allowance, and a statewide SNAP adjustment factor.
• Floors establishing minimum total compensatory revenue (floor amounts for 2026 and 2027+).
• New statewide SNAP adjustment factor to scale compensatory revenue, dependent on direct certification and SNAP counts across years.
• Provisions ensuring current-year payment of compensatory revenue when changing alternative programs or area learning centers.
• Integration of SNAP-related financing into the broader state/local financing framework, including references to income tax adjustments and county program aid to reflect SNAP changes.

Relevant Terms - compensatory education revenue - compensatory revenue - compensatory revenue pupil units - building - formula allowance - statewide compensatory Supplemental Nutrition Assistance Program adjustment factor - compensatory pupils - compensatory loss adjustment - direct certification - Supplemental Nutrition Assistance Program (SNAP) - area learning center - fiscal agent district - alternative program (section 124D.69) - minimum/floor funding (838,947,000 and 857,152,000 figures) - Department of Education - direct certification counts by SNAP participation (fall 2024 and prior fall year)