nathan mt

Joe Nathan

Suspicious, disappointed, pleased and grateful: Those were some of the reactions educators and parents shared to the 2019 Minnesota Legislature’s efforts to help students who have some form of disability. 

A 2016 Minnesota Department of Education report describes a legislative requirement that superintendents annually report  how much a “district is cross-subsidizing the cost of special education programs with general education revenue” ( Federal and state laws require that schools serve students with disabilities, as well as other students.

The term “cross subsidy” bothers Gretchen Godfrey, assistant director of PACER, a research, information and advocacy organization serving students with special needs and their families (more information at She explained, “These are first, district students.” 

Furthermore, districts use general fund dollars to support not just students with disabilities, but also student athletes, artists or students in other extra-curricular activities. Yet no one calls that spending a “cross subsidy” for those students. 

This year’s Legislature provided an additional $94 million so that the amount of the “cross subsidy” doesn’t increase. The Legislature also reduced the rate paid by a resident district (where the students with special needs live) to the district where those students attend: In the 2019-20 school year, resident districts will pay 85% of “unfunded costs,” down from 90%.  Starting in the 2020-21 school year, resident districts will pay 80% of those costs.


Monticello Public School District Superintendent Eric Olson reported that the number of students with some form of disability has grown slightly, from 632 in the 2015-16 school year (13.47% of enrollment) to 638 in the 2018-19 school year (13.26% of enrollment). The cross subsidy was more than $3.6 million in 2016-17, the latest year for which data is available.

Here’s how local leaders reacted to legislative efforts focused on students with special needs.


Monticello Public School District Superintendent Eric Olson told me: “Our special education cross subsidy is a considerable amount and growing. The cross subsidy reduction aid might save one teaching position (out of 315 certified staff).”

What could be done?

• As PACER suggests, legislators should consider creating a statewide form to use with special needs students. Forms vary across the state, requiring extra paperwork if students move from one community to another.

• Ask MDE to convene regional meetings in which districts and charters that are unusually successful with special needs students in various categories can share strategies.

• Create a state funding task force that includes some of the Minnesota’s most successful schools, families, students and advocacy groups to develop recommendations on funding and increased efficiencies.

Minnesota Commissioner of Education Mary Cathryn Ricker described legislative education funding actions as a “down payment in making Minnesota the ‘Education State.’” 

While there was progress, actions such as those suggested above can help Minnesota public schools be more effective and efficient.

Joe Nathan directs the Center for School Change. Reactions welcome,

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