Task Force Awakens: A Deep Dive into Minnesota’s 2025 K-12 Budget Bill

By Madie Spartz & Matt Shaver

Editor’s Note: On June 14, a senseless act of violence claimed the lives of House Speaker Emerita Melissa Hortman and her husband Mark, alongside attacks on Senator John Hoffman and his wife Yvette, and threats to dozens of other dedicated legislators. These devastating events cast a shadow on the hard work to build compromise in a challenging year, and will change the landscape of policy work in Minnesota. While we continue our work to shed light on important education policy changes, we also send our deepest condolences to the families and communities impacted by this tragedy, and we honor public service and legacy of Rep. Hortman.

After one of the most evenly divided legislative sessions in recent memory, where universal agreements were hard to come by, Minnesota lawmakers finally passed a state budget during the one-day special session on Monday. The intense negotiations and stop-and-go nature of this session made it challenging to track education provisions, but we break down the major K-12 education budget and policy items below.

What’s In the K-12 Education Finance and Policy Bill?

No overall cuts, for now, but some restructuring of funds and a warning that future cuts to education are imminent. While the overall education budget increased slightly, the final accounting involved cuts to some programs to pay for increases elsewhere. Most notably, special education funding saw the biggest reduction in this biennium, and a task force was created to find $250 million in additional special education cuts in the 2028-2029 budget cycle. This would be cause for concern in any circumstance, but the federal government’s plans to dramatically reduce both funding and function of the U.S. Department of Education, which plays a key role in protections for special education students, raises the alarm even further. More details on the budget include:

• The automatic inflationary adjustment will stay in place, so basic per-pupil dollars will see a 2-3% increase in the next biennium. This provision is new as of 2023 and there was some concern it would get cut during budget negotiations.
• About $100 million in cuts to special education transportation reimbursement, student support personnel aid, and school library aid to pay for a $55 million hold harmless for compensatory revenue, the state’s funding mechanism for students in poverty. While overall compensatory revenue increased, there’s a catch: rather than staying at the school site that educates the students who generate these funds, districts now have the ability to move up to 40% of a school’s compensatory dollars elsewhere, to the effect of higher poverty buildings subsidizing lower poverty buildings. EdAllies has long advocated for the resources generated by students in poverty to be directed toward their education; in 2023, the law was finally changed to allow districts to move only 20% of compensatory revenue away from the students who generate it. This year’s bill doubles that amount to 40%.
• In addition to the compensatory hold harmless, the $100 million in cuts also fund increases in operating funding for the state Department of Education, legal fees and an Office of the Inspector General at the agency, an increase in Grow Your Own funding for teacher licensure, and several other small appropriations.
• The bill includes the formation of a “Blue Ribbon Commission for Special Education” to find $250 million in additional cuts to special education. Their group is tasked with “transforming special education services” and increasing efficiency in special ed programming and practice. If the Commission cannot identify $250 million in cuts, the funding will be subtracted from special education cross subsidy reduction aid, putting districts in a deeper funding hole. The commission’s membership will include legislators, the Commissioner of Education, and 13 Governor appointees ranging from teachers to legal rights experts to family advocates.

Speaking of commissions: working groups galore. The legislature clearly had a favored tactic this session: task forces, working groups, and committees. There are 5 in the K-12 bill alone:

• • Compensatory Revenue Task Force, established to evaluate the compensatory revenue formula, its uses, and outcomes of spending. It is tasked with determining the best way to identify students who should generate compensatory dollars, which used to rely exclusively on reduced price meal forms– but those forms have been rendered obsolete with the implementation of universal school meals.
  • Seclusion Working Group to evaluate and make recommendations on the use of seclusion– despite the fact that Minnesota convened a similar working group in 2011, whose findings led to the passage of the 2023 ban on seclusions for grades PreK-3. More on that below.
  • Developmental Delay Age Limit Working Group, tasked with making a recommendation on increasing the age limit on receiving intervention services for developmental delay, from age 7 to age 9.
  • Dual Language Immersion Advisory Committee, to advise the Department of Education on implementing the Read Act in dual language immersion schools.  
• Blue Ribbon Commission for Special Education, as outlined above, tasked with finding $250 million in budget cuts for special education.

Literacy (Incentive) Aid: a change in name only. Many stakeholders worked throughout this session and beyond to make necessary updates to the literacy incentive aid formula, the only funding mechanism in Minnesota that relies on test scores. Despite analysis showing the formula is fundamentally inequitable, giving less money to schools with more struggling readers, and an agreement on a better way to calculate the formula, lawmakers declined to change that calculation. They did change the name to Literacy Aid, striking the word “Incentive,” but a simple strikethrough won’t change outcomes for kids who are learning to read. While the use of these dollars are still focused on the goals of the Read Act, they have been broadened; instead of spelled-out uses for the money in state law, districts now may use literacy aid for any expenditure “to meet the requirements and goals adopted in the district’s local literacy plan.”

Updates to the Read Act Although the final agreement doesn’t fund reading outcomes in the ideal way, it did make some other changes to the Read Act, Minnesota’s landmark literacy law. There is now more clarity on required literacy training for licensure and re-licensure of educators, and an expanded list of people and organizations that can provide this professional development for teachers. The bill also updates local literacy plan requirements, including new reporting on how districts used literacy aid, and more information on reading performance for students in dual language immersion programs.

Progress on consistent attendance. Minnesota’s chronic absenteeism crisis is well-documented, with about a quarter of students not attending school on a regular basis. Lawmakers took the first steps in addressing that problem by passing a law that requires all schools to report attendance in the same way. It also modifies the requirements for schools to report to county agencies when a child misses 15 consecutive days of school– state law requires schools to drop students from the rolls once this threshold is met, but poor communication between schools and county social services can mean these students don’t receive the services they need. It might seem small, but it’s the building block for a robust response to chronic absenteeism: without a full understanding of the problem, lawmakers and schools can’t craft meaningful solutions. (Fun fact: the attendance bill passed unanimously off the House floor, no small feat in a perfectly divided House.)

Increased transparency and accountability for charter schools. At the beginning of session, there was talk from some legislators about a charter moratorium, but that never came to pass. Instead, lawmakers chose to aim for improved accountability in the charter sector. A series of new policies, such as public performance reviews from charter authorizers and a requirement for all charter school boards to have a finance committee, will aid in transparency for families and the public. 

A small step forward on automatic enrollment. EdAllies has long advocated for expanded access to rigorous coursework, and this year we achieved a small win on automatic enrollment: districts who adopt an automatic enrollment policy are now eligible for raised academic achievement grants. Hopefully, more schools will take advantage of this policy with a track record of increasing access to rigorous coursework, particularly for students of color.

What Didn’t Make It

In our mid-session update, we wrote about policies that we successfully kept out of omnibus bills, including protecting the integrity of the MCAs and defending universal access to algebra. We also wrote about protecting special education funding, which is now only partially accurate, since the final agreement includes the current and incoming cuts to special education we described above. Read on for updates about which other proposals did not make it across the finish line.

Seclusion remains unlawful, for now. Strong community advocacy kept the K-3 seclusion repeal out of the final agreement, meaning our youngest learners with disabilities are protected from seclusion in Minnesota schools for at least another year. However, as we discussed above, part of the compromise with lawmakers who wanted to bring seclusion back is a working group to “evaluate the use of seclusion as an emergency procedure”– despite the fact that Minnesota has already had a Restrictive Procedures Workgroup, convened in 2011. That workgroup’s findings led to the K-3 seclusion ban that passed in 2023. The new working group’s membership will include legislators, special education teachers and paraprofessionals, and families of students who have been secluded. The working group will report its findings to the legislature by January of 2026. 

Direct Admissions remains voluntary for high schools. Despite the program’s documented success and broad, bipartisan support, the provision that would have implemented Direct Admissions in all Minnesota high schools by 2030 was stripped from the Higher Education omnibus bill in conference committee. 

Changes to nonpublic aid. A somewhat obscure school finance provision became a flashpoint of partisan rhetoric this year. After the Governor proposed eliminating nonpublic pupil aid in his budget proposal, Republicans in the House and Senate vowed to defend it; the bipartisan agreement resulted in no changes to that program. Nonpublic pupil aid provides state funding to public school districts for services to students living in their districts who attend private schools, such as counseling and textbooks. Nonpublic transportation aid functions in the same way for general school transportation and special education transportation for students who attend nonpublic schools. Both funding streams remain unchanged. 

Early learning scholarships see an effective 50% reduction in funds. In the last budget cycle, early learning scholarships received a large infusion of one-time funding, and unfortunately, lawmakers chose not to renew those funds. Without the additional funding, early learning scholarships have a budget of $100 million for the next biennium, an effective 50% reduction since last cycle’s one-time funds were an additional $100 million. Early learning scholarships provide access to high-quality early learning from birth- age 5 for children from low-income families. Advocates expect the already long waitlist for these scholarships – estimated at 15,000 children– will now grow even longer.

What Happens Next?

Legislators are now back in their districts and the legislature has adjourned, but the work may not be over. There is speculation that congressional budget cuts will require another special session for lawmakers to come back and find even more to cut in the state budget. We’ll be monitoring any potential impacts on further cuts to education and keeping you updated along the way.