Shedding light on the education formula - How the K-12 general education revenue program’s complexities work for rural districts

Oct 15, 2026

Uploaded by Rhys

The report explains how Minnesota’s K-12 general education revenue program allocates state education funding to rural districts, focusing on the basic education revenue formula allowance. It clarifies the program’s intent to provide a consistent baseline while increasing funding where unique conditions make education more costly. It also examines how an increase to one program component would affect districts statewide, concluding that higher funding would benefit all schools, with different magnitudes reflecting the formula’s design.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages23

Reading Time58 min

AccessFree to download

The General Education Revenue Program

Purpose and transparency behind the funding formula

Two primary revenue streams and naming clarity

How the program is structured (14 components)

Table 1: The 14 components and what they do

P.O. Box 3185 Mankato, MN 56002-3185 (507)934-7700 [www.ruralmn.org](www.ruralmn.org) Shedding light on the education formula How the K-12 general education revenue program’s complexities work for rural districts . March 2023 By Kelly Asche, Senior Researcher Increasing education funding is a topic of discussion every year at the Minnesota State Legislature. In January, Governor Tim Walz proposed a 4% increase to the basic education formula allowance within the K-12 general education revenue program, the “education formula”that determines the majority of funding school districts receive from the state. Whenever any changes to the general education revenue program are proposed, it brings up an ongoing question—will some districts benefit more than others? From an outsider’s perspective, the funds distributed through this model can seem unequal, and in fact, they would largely be correct. Minnesota’s general education revenue program does distribute more money to some districts than others, and it is supposed to. The purpose of the program is to accomplish two things: • Provide the same baseline of funding to each district, and • Provide more funding to districts where, because of unique characteristics and circumstances, it costs more to educate students there. Because the program does intentionally provide more funding to some districts than others and because of the fact that how the calculations are made is not exactly simple, increasing funding within the program has often been contentious. To help with this transparency issue, this report examines how an increase to one component of the general education revenue program—the basic education revenue formula allowance—would impact districts across the state, and in doing so, hopefully provides some insight into how the general education revenue program works. What we found is that increasing the basic education formula allowance benefits all schools. And although some schools will receive a larger increase than others, that is due to the general education revenue formula working as intended. Center for Rural Policy & Development 1 Note: The Center for Rural Policy & Development does not endorse any particular education funding plans or proposals. This report is only intended to provide information about the funding process to help policymakers with their decisions. The General Education Revenue Program Before we dive into the impacts that increasing one component of the general education revenue program would have on districts across Minnesota, let’s first learn a bit about the overarching program itself. It’s important to note that the two primary revenue streams discussed throughout this report are the general education revenue program and the basic education revenue formula allowance, which is a part of the larger program. The similar names can be confusing. Although Minnesota’s K-12 schools get their funding from a mix of local, state, and federal funding mechanisms, Minnesota’s funding framework, the general education revenue program, makes up around a half to two-thirds ofthe total revenue any one school district receives each year. Any changes made to this framework can have a significant impact on a district’s funding. The general education revenue program is actually a collection of 14 formulas (called components throughout this report), each with its own purpose. Some of these formula components send revenue to all school districts, while other components may only send revenue to a few districts, and yet other components send vastly different amounts of funding to different districts depending on their unique characteristics, like location, size (in number of students or geography), facilities, and pupil characteristics. Table 1: The 14 components of the K-12 general education revenue program and what they do. | Component Name | Description | | --- | --- | | 1. Basic education revenue | Provides a base amount of revenue per a

FAQs

What is the goal of Minnesota’s general education revenue program?

The program aims to give each district the same baseline of funding and to provide more funding to districts where educating students costs more due to unique circumstances.

Why can funding increases be contentious?

Because the program intentionally provides different amounts to different districts, and because the calculations involved are not straightforward.

What does the report conclude about increasing the basic education formula allowance?

Increasing the basic education formula allowance benefits all schools; some schools receive larger increases due to how the general education revenue formula is designed to work.

Oct 15, 2026

Uploaded by Rhys