Robert Monteith

Nobody in St. Paul is trying to destroy Iron Range schools.
That’s worth saying up front, because what’s happening to our schools can look like malice. It isn’t.
The people writing education policy in Minnesota mostly want what we want: well-paid teachers, strong curriculum, schools that prepare kids for whatever comes next.
The problem is that policy gets written for a version of Minnesota that doesn’t look much like ours, and when it lands here, good intentions have a way of making things worse.
We are in a school funding crisis across the Iron Range. It has been building for years. And the path forward leads somewhere none of us want to go.
Start with the basics.
Ely Public Schools is cutting its budget for the third consecutive year. The county district, which serves Cook, Orr, Tower and Babbitt, is teetering on the edge of statutory operating debt. Hibbing cut 21 positions this spring. Rock Ridge eliminated more than 30 teachers and support staff.
So, why is this happening?
Minnesota funds schools largely on a per-pupil basis. Every student brings a set dollar amount to their district. It’s an old-school way of funding schools that assumes Minnesota communities will continue to grow. On the Iron Range, that isn’t the case. School enrollment has been declining steadily for many years. The problem is that running a school isn’t a per-pupil operation. You can’t heat the building 8 percent less because you lost 8 percent of your students. You can’t reduce your principal by 8 percent. Although with all the new weight-loss drugs, maybe you can. When enrollment falls, revenue falls faster than costs can be cut. Ely enrolled nearly 600 students in the late 2010s. Today it has 461. The building is the same size. The buses still run. The bills still come.
That’s the structural trap small rural districts live in, and the funding formula doesn’t account for it.
More worryingly, the state spent a decade making it worse, then declared victory.
From roughly 2003 to 2014, Minnesota’s per-pupil formula failed to keep pace with inflation. In real dollars, it lost more than 20 percent of its purchasing power. School districts absorbed that loss by drawing down reserves, cutting programs, and deferring everything that could be deferred. Rural districts, with less local property wealth to fall back on, absorbed it deepest.
In 2023, with a $17 billion surplus in hand, the DFL trifecta passed what Gov. Walz called the “Minnesota Miracle 2.0,” a $2.2 billion education investment that finally indexed the formula to inflation going forward. That’s real money that was long overdue.
But here’s what it didn’t do: go back in time and fill the gap. By the state’s own admission, the 2023 increases closed the inflationary gap by one-third. One third. An $800-per-pupil gap remained between current funding and where it would have been if the formula had simply tracked inflation since 2003. For a district like Ely, that gap is roughly $370,000 a year in revenue that never arrived, year after year, while reserves were spent down and staff was cut.
The indexing stopped the bleeding. It did not treat the wound. Ely’s reserves have dropped from nearly $2.5 million in 2021 to $1.2 million today. That erosion happened on the watch of a formula that was falling behind in real terms, and the 2023 fix didn’t put that money back.
On top of that, the state has created a loop in which one good idea is eating another.
When budgets shrink, districts cut what looks optional first. Electives. Arts. Foreign languages. Each cut looks survivable in isolation. The problem is that “optional” is in the eye of the beholder. Foreign language credits are a near-universal requirement for four-year university admission. When a small district can no longer afford its Spanish teacher, it isn’t trimming a frill. It is quietly changing which futures are available to its students. Nobody votes on that. It happens, like most policy does, in a budget meeting.
The state saw this coming. Post-Secondary Enrollment Options lets juniors and seniors take college courses tuition-free when their district can’t offer equivalent coursework. That’s a thoughtful policy and a genuine attempt to keep rural kids’ options open.
Except that the per-pupil funding follows the student out the door. The district still heats the building, pays the principal, runs the buses, but it collects less money. The program designed to compensate for budget-driven curriculum cuts drains the budget that caused the curriculum cuts. A kid takes three PSEO courses at a community college. Ely loses the revenue. Ely cuts more. More kids leave for PSEO. The state built this loop, and it has never seriously reckoned with it.
And then there’s the bill that breaks my heart a little.
This session, a bill was introduced at the Capitol that would set statewide minimum teacher salaries — $60,000 for teachers without a master’s degree, $80,000 with one, and $100,000 for those with a master’s and more than ten years of experience. It would also set a $25-an-hour floor for paraprofessionals.
My wife is a teacher. She is good at it, she works hard at it, and she does not make what she deserves. I want her and every teacher in Minnesota to make more money. The research on teacher pay and the staffing shortage is unambiguous, and the bill’s sponsors are right that the profession is losing people it cannot afford to lose.
But here is what that mandate does when it lands on Iron Range schools. Yes, it may raise some people’s salaries, but it will also trigger layoffs. A district that cannot balance its budget at current salary levels cannot balance it at mandated higher ones. Someone goes home without a job so the person who stays can be paid what the law requires.
The bill missed a deadline and won’t pass this session. Its sponsor said it lays the groundwork for future negotiations. It is coming back. And when it does, we’d ask that its authors spend some time speaking to rural schools before they file it.
So far, no malice. Everything above could be chalked up to policy designed without rural districts in mind.
But this next part is harder to explain away.
A $420 million general education funding cut is already written into the 2028-29 biennium budget. It was baked into this year’s omnibus education bill because the state faces a projected multi-billion dollar shortfall in two years. Rep. Ron Kresha, a member of the House Education Finance Committee, called the current bill “the canary in the coal mine.”
“Pay attention because two years from now, things get immensely more difficult,” he warned colleagues.
Districts that are surviving today on foundation donations and four-day school week savings have no cushion for that cut. There is nothing left to absorb it. When it arrives, the conversation will not be about trimming electives. It will be about whether some of these schools can ever operate in the black again.
So, what’s the solution?
Several ideas are being floated about.
Minnesota’s Permanent School Fund distributes money to every public school district in the state. Its largest single contributor is Iron Range mining. There is a bipartisan bill in committee right now, backed by Rep. Spencer Igo and Sen. Mary Kunesh, that would restructure the fund’s distributions to provide roughly a 40 percent per-pupil increase to every district in the state. It hasn’t received a hearing.
There’s also a fix sitting in committee for the third consecutive year. Since 2001, seasonal recreational properties, the cabins and second homes on our lakes, have been excluded from the tax base used to fund school operating levies. The taxes those properties generate go to the state general fund instead. In the St. Louis County Schools district, 45 percent of all properties are seasonal recreational. In Ely, 38 percent. That’s an enormous share of the local tax base contributing nothing.
Sen. Grant Hauschild and Igo have been pushing bipartisan legislation that would have the state send replacement aid to districts, automatically reducing what permanent residents pay toward existing referendum levies. A homeowner currently paying $300 a year toward a school levy could see that bill go down.
For a school to get any additional revenue, it would have to go back to voters and ask them to increase the levy. Voters might end up paying the same amount they did before, but the district would take in more.
The Senate included the bill in its tax omnibus package this session. It should pass. But even if it does, it still shifts the burden of funding schools onto local votes in communities that are shrinking. The state keeps passing mandates. The fix, via cuts and additional levies, keeps being local. That’s the same problem with a different face.
The state needs to own up to the problems it has created in rural education. The Range has been funding Minnesota’s schools for generations. It’s time Minnesota returned the favor.