MREA released a map today showing where the districts are that do not qualify for Location Equity Revenue (LER) and are left in the “Donut Hole” between Small Schools Revenue (SSR) and LER. All of these 132 districts with 147,000 students are in Greater Minnesota.  View the interactive map.

School districts with 600-999 kids would do better financially with the LER than what they get from SSR and those between 1000-1999 kids don’t get either SSR or LER. These are the donut hole districts. They weren’t singled out for a particular reason. Legislative action just focused on smaller and larger school districts. With SSR and LER book-ending the system, those in the donut hole are asking ‘What about us?’

Key Findings:

• SSR is state aid at $16 million per year
• A rationale for SSR is that small schools which are geographically isolated are needed to serve students and have higher per pupil costs due to size.  In districts smaller than 470 students, administrative costs per pupil do increase dramatically according to a table of district expenditure per pupil grouped according to district size released by MDE
• LER is almost all levy derived from the Referendum Market Value (RMV) with a small amount of equalization aid.
• A rationale for LER is that districts above 2200 students have increased special education costs per pupil which means that they will have higher cross subsidies despite the revised and increased formula for special education reimbursement. View the table

Key Question:

Districts between 470 and 2200 students, including all the Donut Hole districts, spend the least on regular instruction, according to this same MDE chart.

Is this true efficiency or a lesser investment in kids due to a lack of resources per pupil? 

What’s Happening?

Read more on the Donut Hole and what happens next.