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Charters could gain PSF funding

Published (3/4/2010)
By Kris Berggren
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A proposal to require that charter schools receive investment income from the state’s Permanent School Fund, as do school districts, raises a constitutional question.

The state constitution designates that fund proceeds are for the use of schools, but specifies they are to be distributed to the different school districts.

“For all practical purposes right now a charter school is treated as a school district,” said Rep. Mark Buesgens (R-Jordan). He sponsors HF3003, which would include charter schools in the statutory definition of “school district,” and change PSF revenue distribution to be based on pupils served, instead of resident pupils.

Established by a grant of federal land to the state in the 19th century, fund revenue comes from land management activities, such as timber harvesting, mineral activities and lease revenue. Starting in fiscal year 2010, school districts are to receive a share of fund interest earnings directly. Previously, that revenue has been offset against districts’ general education aid.

Under the bill, some school districts would lose a portion of their PSF funding, Buesgens told the House K-12 Education Finance Division Feb. 25.

Grace Keliher, director of government relations for the Minnesota School Boards Association, said a 2008 legal opinion found “the Legislature does not have the constitutional authority to appropriate [PSF] revenue to entities other than school districts.”

Rep. Denise Dittrich (DFL-Champlin) said the law clearly states that funding is to school districts, and that understanding has been the standard in discussions about the fund.

Buesgens cited a 1959 statute, “written far after the constitution,” defining school districts as “common, independent or special” as evidence the Legislature does “understand that we have the power to define a school district.”

The division held the bill over for possible inclusion in an omnibus bill. Sen. David Hann (R-Eden Prairie) sponsors a companion, SF2649, which awaits action by the Senate E-12 Education Budget and Policy Division.

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