As school districts across the state begin preparing for the 2021-22 school year budget, issues affecting schools this year will have a major impact.

Minnesota Gov. Tim Walz shut down every public and charter school in the state March 18. Two weeks later, districts were required to offer online learning. With just two weeks to prepare, the experience fell short in the eyes of some educators and parents.

Walz and Minnesota Department of Education officials have acknowledged the distance learning offered in the spring was not up to standards. Because of the what was offered in the spring, schools fought an uphill battle to convince parents it would be better and more comprehensive in the fall.

In August, Minnesota Department of Education Assistant Commissioner Daron Korte suggested parents talk to school administrators before deciding to pull their children from a district and enroll them in an online school or begin home schooling.

"We just encourage parents to make sure they're having conversations with their local school districts before making these decisions because each child is unique and has individual needs," Korte said in an interview with the News Tribune in August. "With distance learning through the district, you're still at home with your students, working through the curriculum and education, but you have all kinds of resources that come along with being a public school student."

Newsletter signup for email alerts

Walz even encouraged parents over the summer to choose distance learning through a school district before choosing to leave the district.

But no matter the reason, many parents chose home schooling over distance learning. Duluth Public Schools had around 200 students home schooling at the end of last year, but now the district has more than 430 students signed up to home school. The most recent average daily membership estimates shared by Chief Financial Officer Cathy Erickson showed Duluth down by more than 360.

This number was before the end of the first semester, when districts typically see a drop in enrollment with students graduating early or taking more postsecondary education opportunities.

Average daily membership is the portion of the year a student is enrolled in a district. For example, if a student spends the first semester at one district and then transfers to another district for the second semester, then each district could claim that student as 0.5 on its average daily membership.

Erickson said in January that the decrease in enrollment is causing the district to look at next year’s budget differently.

“We will have to think through what our enrollment looks like and if we think this will just be temporary or if it’s a trend that we need to consider going into next year and plan for,” Erickson said in January during a business committee meeting.

Mountain Iron-Buhl Public Schools and St. Louis County School District Superintendent Reggie Engebritson said both of her districts have seen a loss in enrollment as well, due to parents choosing home schooling over distance learning.

St. Louis County School District is down an estimated 135 in average daily membership compared to the previous year — approximately $887,000 in revenue loss.

“It’s difficult because if we have to make cuts, that’s hard to do, especially in some of our smaller schools, so we are trying to be creative with our budget to try and maintain,” Engebritson said of the St. Louis County School District.

As for Mountain Iron-Buhl, Engebritson said the district has lower-than-expected average daily membership, but it is not looking at making any significant cuts.

Average daily membership affects funding

The average daily membership is used to determine about 60% of a school district’s funding. One of the largest funding sources average daily membership affects is the basic general education aid revenue, money received through the state of Minnesota.

General education aid is calculated like this: The total average daily membership for seventh through 12th grades is multiplied by 1.20 and then added to the remaining average daily membership to give a district its adjusted pupil unit.

The adjusted pupil unit is multiplied by the formula allowance set by the state Legislature. For the 2021-22 school year, the formula allowance is $6,567.

A district that has an average daily membership of 500 for seventh through 12th grades and 500 for the remaining grades, the district would receive more than $7.2 million in general education aid.

The state does provide enrollment loss revenue to help bridge the funding gap between years, but it provides 28% of the formula allowance per average daily membership lost. Walz has budgeted $25 million in his latest budget proposal, which, according to the Department of Education, was based on the enrollment loss revenue percentage increasing to about 48%.

“It’s not enough compared to the actual loss we are accruing, but any help we can get is greatly appreciated,” Rock Ridge Public Schools Superintendent Noel Schmidt said. “It helps close the gap and it prevents us from making budget decisions elsewhere.”

Schmidt said though the district has seen a decrease in average daily memberships, it has started to level off. Schmidt said they have lost most of their students to home schooling and online schooling through other vendors.

Because average daily memberships for this year affect the final funding provided to the district, many school districts have made average daily membership lost due to the pandemic part of their legislative platform.

School districts are lobbying the state to use their average daily membership from the 2019-20 school year to determine this year’s funding because they believe once the pandemic starts winding down and vaccines have been more widely distributed, schools will see their enrollment numbers return to normal.

According to the Department of Education, average daily memberships are down across the state. Collectively, schools in Northeastern Minnesota are facing a reduction in funding of more than $3.7 million due to lower than expected average daily memberships.

If more funding is not made available to districts or they do not get approval to use the 2019-20 school year average daily memberships, many districts could face budget cuts or adjustments next year.