March 2025 Research Rundown
By Madie Spartz
For March’s Research Rundown—our curated list of recent, relevant research we think is worth adding to the education equity conversation—we’re sharing articles about the complex but critically important topic of school finance. Read on for articles about:
- Recommendations from a statewide school finance task force
- An analysis of a critical component of education funding in Minnesota
- Increasing funding for school meals via the community eligibility provision
Providing a World-Class Education to All Students: Recommendations from the Task Force on Financial Supports for Low-Income, Multilingual Learners, Students of Color and Indigenous Students
Minnesota Task Force on Financial Supports for Low-Income, Multilingual Learners, Students of Color and Indigenous Students, February 2025
This report to the legislature is the culmination of the work of a legislative task force charged with making recommendations to improve Minnesota’s school finance structure, specifically to improve outcomes for low-income students, multilingual learners, and students of color and indigenous students. The group made two key recommendations, with more specific recommendations that would support their success.
The first recommendation is to change Minnesota’s funding formula from its current flat-rate calculation to a weighted student formula. A weighted formula reflects the higher costs of educating students with different needs, such as multilingual learners or low-income students. The report draws on research that shows this is a more equitable and cost-effective way to fund public education.
The second key recommendation urges the legislature to increase funding amounts for students in the report’s target populations. Increased funding could be used for research-backed practices to improve academic achievement for these students, including tutoring, mentoring, and co-teaching models. This recommendation is grounded in the inequitable achievement data among student groups in Minnesota and the fact that these student populations are growing. The task force makes additional, detailed recommendations for how this funding should be calculated and spent to ensure it results in improved student outcomes.
Why This Matters in Minnesota
When adjusted for inflation, school funding in Minnesota has remained stagnant since 2003. However, student demographics are shifting and as a result, the cost of providing a world-class education to every child has increased. Furthermore, the report mentions a critical fact that highlights the structural issues with school funding in Minnesota: “Minnesota has never analyzed what it actually costs districts to provide these [students of color, multilingual learners, and low-income] students with a world-class education.” A 2004 task force recommended the state do research to ensure adequate funding adjustments to the basic formula; that recommendation was never followed. Instead of convening a task force to study the same problem every 20 years, the legislature should take bold action to provide solutions to those problems.
Compensatory Revenue
Minnesota House Research Department, March 2025
This analysis by the nonpartisan staff in the Minnesota House provides a primer on compensatory revenue, a critical funding stream in Minnesota’s school finance formula. Compensatory revenue provides additional funding for schools serving low-income students. Its formula is concentration based: each low-income student generates compensatory revenue for their school, but if the school serves a higher percentage of low-income students, the per student amount increases. Compensatory revenue is calculated based on free- and reduced-price lunch eligibility, historically taken through a combination of paper forms that families fill out and existing data on students’ participation in other income-based programs (known as direct certification).
The analysis shows how the funding stream has changed over time. The share of free- and reduced-price lunch students has steadily grown over time, but saw a drop during the COVID years—likely due to decreased school attendance and the temporary nationwide free meal program (federally funded during the pandemic). Numbers suddenly bounced back in the fall of 2022 due to an important change: students receiving Medical Assistance were added to the direct certification process, capturing many eligible students who hadn’t been completing annual forms.
Why This Matters in Minnesota
Though it may seem like a wonky school finance topic (and it is!), compensatory revenue and recent changes to it have huge implications for schools, students, and families. In 2024, compensatory revenue amounted to $800 million—or 10% of the education budget—the largest category apart from the basic per-pupil allotment. The passage of universal school meals in 2023 complicated compensatory revenue calculations because school meal forms were rendered obsolete. The legislature is working on a fix this session; watch the March 20th hearing on this topic. However, bigger questions remain about the adequacy and accuracy of our current school funding system. Given that compensatory revenue is aimed at supporting low-income students’ academic success, and they lag behind their higher-income peers on most metrics, it’s critical that we get this right.
Community Eligibility: The Key to Hunger-Free Schools
Food Action and Research Center, December 2024
This report from the Food Action and Research Center provides an overview and analysis of the Community Eligibility Provision (CEP). This federal program provides free school meals to all students at schools where 25% or more of the student body qualifies for income-based programs, like SNAP or Medicaid, or are homeless, in foster care, or enrolled in Head Start. CEP benefits both schools and students, reducing the administrative burden of collecting meal forms and payments, while also lowering stigma and thereby increasing participation. According to the report, CEP is associated with better attendance, increased academic performance, particularly in math, and modest reductions in childhood obesity.
The program is administered by the U.S. Department of Agriculture, so any school in the country that has 25% or more of students meeting eligibility requirements can participate. The federal government reimburses schools for the meals, and although reimbursement rates differ based on the school’s percentage of eligible students, all students at CEP schools eat for free. Interestingly, data shows that not all eligible districts and schools participate. The report does not speculate why, but it suggests that CEP could be more “financially viable” for high-needs schools if Congress increased the meal reimbursement rate.
Why This Matters in Minnesota
The report shows that Minnesota has one of the lowest CEP participation rates in the country. Just 42% of eligible schools in Minnesota utilize this program. Compare that to our neighbor, North Dakota, where 100% of eligible schools utilize CEP. This is critical because under Minnesota law, schools that participate in the statewide free school meals program are required to participate if their CEP eligibility rate is 62.5% or greater. This means that there are likely schools that are required to participate in CEP under state law but aren’t currently doing so—at a cost to Minnesota taxpayers who are losing out on available federal support. As Minnesota continues to untangle issues around school meal forms, compensatory revenue, and the implementation of state-level universal meals, it’s critical to explore the details of aligned policies such as CEP.