SF3945

Purpose

• Expand and modify how general education funding is calculated for charter schools, by aligning more of their funding with the way districts receive money and by adding new funding adjustments targeted at extended day programs and special education costs. The bill also notes renaming and increasing funding for the local optional revenue program.

Main Provisions

• General education revenue for charter schools: Charter schools will be treated as if they are districts for purposes of calculating general education revenue (GE revenue). The per-pupil amount is based on the state average GE revenue per pupil unit, plus the referendum equalization aid allowance and the first-tier local optional education aid allowance in the district where the student resides, with specific deductions and additions tied to district-level formula allowances and various revenue components. The calculation is described as being “as though the school were a district,” with certain adjustments that affect whether or not specific revenue streams are included.
• Extended day/week/summer program funding: If a charter school runs an extended day, extended week, or summer program, GE revenue increases by 25 percent of the statewide average extended time revenue per adjusted pupil unit.
• Special education charter schools: For eligible special education charter schools, GE revenue equals the amount from the general calculation (paragraph a) plus the school’s unreimbursed cost for educating students not eligible for special education services, as defined in the statute.
• Additional GE revenue boost: GE revenue under the above provisions (a–c) is increased by 132 times the charter school’s adjusted pupil units for that fiscal year. This represents a substantial multiplier added to the baseline GE revenue.

How Revenue Is Calculated for Charter Schools (Key Details)

• General framework: GE revenue is calculated as if the charter school were a district, using the state average GE revenue per pupil unit, plus district-level allowances (referendum equalization, first-tier local optional education aid) from the pupil’s district of residence.
• Adjustments: Subtract a portion related to the district’s formula allowance (a product of the formula allowance times 0.0466) with specific references to excluding or including certain revenue components (e.g., declining enrollment, basic skills, extended time, pension adjustment, transition, transportation sparsity) as part of the calculation, then add back other components as if the charter school were a district.
• Extended-time funding: For extended day/week/summer programs, add 25% of statewide average extended time revenue per adjusted pupil unit to GE funding.
• Special education considerations: For eligible special education charter schools, add unreimbursed costs for educating students not eligible for special education services.
• Large revenue uplift: Apply a multiplier of 132 times adjusted pupil units to the GE revenue established under paragraphs a–c.

Significant Changes to Existing Law

• Revisions to how charter schools receive GE funding by treating them more like school districts in the calculation, including district allowances and certain deductions.
• Introduction of a formal increased funding mechanism for extended-time programs (25% uplift).
• Inclusion of unreimbursed costs for educating non-special-education students in the GE calculation for eligible special education charter schools.
• A substantial increase to GE revenue via a multiplier tied to adjusted pupil units (132 times), representing a major change in funding scale.
• Statutory amendments to Minnesota Statutes (124E.20 and related provisions) to implement these changes, and references to amendments in sections 126C.10, 126C.17, and 124E.21.

Implementation Notes (What to Watch)

• The exact calculations involve multiple components and statutory references (e.g., referendum equalization, first-tier local optional education aid, various revenue components like basic skills, extended time, pension adjustment, transition, and sparsity).
• The bill also indicates changes to the local optional revenue program’s funding and renaming, suggesting broader funding policy changes beyond the GE revenue calculation.

Relevant Terms - general education revenue (GE revenue) - charter school - district of residence - adjusted pupil unit (APU) - referendum equalization aid - first-tier local optional education aid - formula allowance (section 126C.10 subdivision 2) - declining enrollment revenue - basic skills revenue - extended time revenue - extended day / extended week / summer program - pension adjustment revenue - transition revenue - transportation sparsity revenue - unreimbursed cost - eligible special education charter school - section 124E.21 subdivision 2 - Minnesota Statutes 2025 Supplement - local optional education revenue (and related program renaming)