Minneapolis’s Budget Bungling Must Be Examined

February 9, 2016

Lurking in the shadows of today’s Star Tribune article about the Minneapolis Public Schools’s recent budget backtrack are two important things:

  1. The District Management Council (DMC), a Boston-based consulting company with strong–and expensive–ties to Minneapolis. 
  2. The questionable budgeting practices of current MPS administrators. 

In the article, reporter Alejandra Matos writes that, “A plan to change the way money is spent on Minneapolis Public Schools is on hold.” Matos describes this “plan” as a “new budgeting process…that would ensure that money follows students with the greatest needs.”

On the surface, that is what the proposed, and now nixed, budget changes are about. But, in reality, these potential changes are the byproduct of a brazen money grab, perpetrated on the Minneapolis Public Schools’ community by the DMC, with help from MPS administrators.

Armed with a MPS contract worth over $1 million, the DMC, beginning in 2013, promised to advise district administrators on how to implement a new “student-based” budgeting formula. The DMC’s formula promised to more equitably distribute general education funds to district students, according to levels of need.

DMC got their money and left town, leaving MPS administrators to try to explain to the public just what this proposed new budgeting model would look like. They could not do this. At a series of budget meetings held in the spring of 2015, such higher-ups as former Chief Financial Officer Robert Doty and interim superintendent Michael Goar simply could not explain this new funding model or how it could or would actually be implemented. It was a confusing solution in search of a problem.

The crux of this issue is that Minneapolis, like the state of Minnesota, already disperses funds according to student need. As it should. Every public school student in Minnesota is given a base, per-pupil funding amount. Then, more money is given to students with higher needs. This means districts like Minneapolis–with a higher concentration of homeless and highly mobile students, students learning English, and students requiring special education services, for example–get more state education dollars than other districts with fewer high needs students.

This pattern holds true for students and schools within MPS as well, where schools with larger concentrations of kids in need have a bigger budget to work with. This does not mean that it is right that we have segregated schools, or so many students living in poverty, nor does it mean that schools with close to 100% high needs kids have enough resources. But the DMC’s formula doesn’t ask MPS to address these concerns.

The state’s equitable funding model has consistently earned Minnesota an ‘A’ rating from Rutgers University school finance expert Bruce Baker, who publishes a “national report card” on school funding each year.

This does not mean that there is, necessarily, ample money in the pot, which must then be carved up according to need, but it does mean that the Minneapolis Public Schools should not have spent a million dollars on DMC consultants, to tell us how to “equitably” distribute funds.

DMC’s funding formula depended upon the district naming a base, per-pupil amount for every student. It couldn’t do that. This amount is the money each school in the district uses, just to operate. The other money that students with greater needs generate has to be used only to address those needs, such as learning English, reducing class sizes to improve academic outcomes, or hiring tutors.

The extra funds cannot–legally, ethically–be used to simply “open” a school’s doors each year. This is where DMC’s model went wrong. In order to further divide up funds for Minneapolis students, the base, per-pupil amount for each student would first have to be reduced. This is because there is no more money coming to the district, because of this formula. Instead, it is simply a way to carve up a pie that has already been served.

This would mean that a small school, like North High, which has less than 400 students, would not be able to open its doors using DMC’s budget plan. Why? Because each student would suddenly carry less general operating funds with them–not more. Any extra funds captured would have to go to specifically targeted categories. This is the legal purpose for such things as federal Title 1 money (designed to boost learning opportunities for students in poverty). The “extra” money cannot be used to simply operate a school.

A school without a big enough mass of students, such as North High, or Edison, or Pratt Elementary, would have to shut down. Students would have to go to consolidated schools, for efficiency’s sake, so that there would be enough money for the school to simply function, before those divvied up dollars could be put to specific use. 

Maybe this is the direction MPS thinks we should go in, but that has not been communicated openly to parents. Instead, this has been sold as a more “equitable” model. It is not.

The real issue seems to be that MPS has little awareness of its own budget, and little transparency or accountability for it, even as it is trying to pit schools, students and communities against one another–thanks to DMC–by suggesting that we have to take from some kids to give to other kids, in order to be “fair.” (Example: Look at Matos’s article, and see how MPS has been underestimating known budget categories, to artificially present a “balanced” budget.)

A budget audit was recently done for MPS, and sources within the district say it shows MPS overshot its budget–during Goar’s tenure–by some $25 million, while also “recovering” around $10 million. What? How? Where is the money going? The answers are not clear, partly because MPS presents its budget–at least publicly–as general categories, without an itemized list of where money is going. 

So, do we know–does anyone know–exactly how the Davis Center has been spending money lately? We know DMC captured some district funds, but what else is disappearing into thin air, in the name of “equity”?

If we are going to move forward, we are going to have to start asking the right questions.

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One thought on “Minneapolis’s Budget Bungling Must Be Examined

  1. I know where $85,000 went. Superintendent search that didn’t find a superintendent.

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