The supplemental omnibus E12 education finance bill provides $10 million for a compensatory revenue adjustment and $5 million to implement anonymous threat reporting systems at schools. A constitutional amendment will be proposed on the statewide ballot this fall to increase the amount of investment income to school districts from the permanent school fund. This proposal will not increase taxes or draw money from the general fund and provide millions of additional dollars to schools from the capital gains of the investments in the permanent school fund. An education policy bill provides necessary changes to the READ Act, awards diplomas to veterans of the Korean and Vietnam Wars, and protects Minnesota school students through anti-grooming legislation.
PASSED
Compensatory Revenue to Schools
The legislature agreed to provide $10 million for a supplemental compensatory revenue adjustment in fiscal year 2027. This will provide every school site 65.9% of the compensatory revenue a school building generated in fiscal year 2026 after adjusting for any decline in total student enrollment at the site level between the 2024 and 2025 October pupil counts. The proposal also maintains flexibility by allowing schools to move 40% of the compensatory revenue they generate between school buildings through fiscal year 2028. (SF4368)
Anonymous Threat Reporting Systems
The omnibus E12 education bill requires schools to implement anonymous threat reporting systems, which provide a secure hotline, cell phone app, or website to allow individuals to report public safety and security concerns. School districts that do not implement their own local anonymous threat reporting system must provide information to students, families, employees and the school community on the Department of Public Safety’s (DPS) statewide anonymous threat reporting system and how to use the system.
The bill appropriates $1 million to DPS for additional staffing and operating costs related to the statewide anonymous threat reporting system. $4 million is appropriated to DPS to manage grants to schools to develop, purchase, implement, operate, and maintain local anonymous threat reporting systems. Grants are available to public schools, charters, tribal contract schools, and non-public schools, which may be awarded in an amount not to exceed $10,000 per school district and $2,500 per charter school, tribal contract school, or nonpublic school. (SF3983)
Permanent School Fund Constitutional Amendment
A bill passed the House and Senate to propose a constitutional amendment to Minnesota voters on the 2026 statewide general election ballot to distribute additional permanent school fund dollars to school districts across the state. The proposal is based on the recommendations of the Permanent School Fund Task Force and will permit capital gains earned on investments to be distributed to school districts.
Currently, the Constitution limits distributions to interest and dividend income only and requires capital gains (and if necessary, interest and dividend income) to offset previous year investment losses. The Fund has experienced strong long-term investment growth, increasing in value from $675 million in 2010 to $2.3 billion in FY25, but the Constitution must be amended to allow for increased distribution of these investments to schools.
The Constitutional amendment would allow capital gains to be distributable while also protecting the Fund as a perpetual financial resource. The bill allows 4.5% of the three-year rolling average of the Fund’s value to be distributed and replaces the current interest and dividend formula. This will provide almost twice as much revenue to school districts as current law (FY25 total distribution was $58 million) and more predictable annual revenue for schools. (HF3900)
Anti-Grooming Bill
Bipartisan legislation passed this session to protect school students from being groomed by teachers or other adults in positions of authority for future sexual assault. The bill adds a definition of grooming to criminal statutes governing solicitation of children, allows the Department of Education (MDE) to investigate maltreatment that occurred more than three years prior to the date of a maltreatment report, updates statutes related to revocation and suspension of teacher licenses to include these new prohibitions, and requires the Department of Children Youth and Families to include grooming as part of mandated reporter training modules.
MDE maltreatment screening guidelines are amended to prohibit the MDE commissioner from limiting the ability to screen in and investigate a report of alleged maltreatment that occurred more than three years prior to the date of the report. Three years is the current maximum amount of time before an allegation of maltreatment can no longer be investigated. It also clarifies that nothing in statute limits local welfare agencies or local law enforcement agencies from investigating alleged maltreatment that occurred more than three years prior to the date of a maltreatment report. $1.2 million is appropriated to MDE to fund additional investigators to analyze and corroborate complaints.
The bill also requires a police department or county sheriff to notify the appropriate licensing board (PELSB) when a teacher is criminally charged with an offense of grooming or is charged with any other offense that requires the person to register as a predatory offender. The legislation requires the commissioner of children, youth, and families to develop a training module as part of the commissioner’s mandated reporter training module that is specifically applicable to educational professionals. The language also extends the prohibition on grooming of any victim enrolled as a student at a school to account for students who may be older than 18 years of age. (HF3489)
Diplomas for Veterans of Korean and Vietnam Wars
Legislation passed both bodies to require the Department of Education to award a standard high school diploma to qualifying veterans of the armed forces who served in Korea or Vietnam who did not complete high school graduation requirements. The diploma may be awarded to a veteran based on knowledge and experience gained while in service. (HF4492)
READ Act Changes
Additional changes were made to the READ Act, which provides evidence-based literacy instruction for all E12 students and provides teacher training in structured literacy. Most of the changes were technical in nature but were necessary to ensure the successful implementation of the READ Act. The bill expands the definitions of literacy specialist, parent or guardian, and oral language, clarifies that English language learners are screened for characteristics of dyslexia, expands literacy screening for grades 4 and above to include screening at least once per year until students reach proficiency, and requires school districts to provide accommodations to students with accommodation plans.
The new legislation clarifies that an educator enrolled in a teacher preparation program after June 1, 2026 does not need additional READ Act training since they received it through the program and extends the reduction of hours of instruction into next school year to ensure teachers are receiving READ Act training during paid professional development hours. The changes will also require the Department of Education to establish an ongoing curriculum and intervention materials review process for third-party vendors to have their curricula reviewed and potentially approved. (HF4492)
Early Literacy Field Experience
Legislation passed to require the Professional Educators Licensing and Standards Board (PELSB) to adopt rules to require teacher candidates in early literacy to undergo student teaching, or supervised field experience, aligned to evidence-based best practices in reading consistent with the READ Act. The PELSB rules must include, but are not limited to defining licensure areas in which teacher candidates must complete the early literacy field experience, establishing expectation for the scope and outcomes of student teaching, ensuring the field experience occurs primarily within a school building during the instructional day, and requiring the field experience includes observation with actionable feedback to ensure growth and attainment related to reading standards. (HF4492)
Flexibility for school district budgets
Numerous bills to provide school district financial flexibility were passed this session, including a bill to allow all school districts to expend capital operating revenue on utility service costs, which is currently not allowed (SF4414). More specific fund transfers passed into law allow West St. Paul-Mendota Heights-Eagan School District and Maple Lake School District to transfer funds from their building construction funds to their general funds without making a levy reduction. (SF4282)
School Employee Health Insurance Study
Legislation passed to require the Legislative Budget Office to annually survey school districts and charter schools regarding their health insurance costs and compile a report on the data by December 1 of each year.
The survey must include the total number of school employees and/or retirees insured and not insured by their health plan, the total dollar amount the school district and employees paid in premiums, and an accounting of all forms of compensation to a broker or agent offering group health insurance.
This legislation will provide greater transparency on how much school employees, school districts, and taxpayers are paying for health insurance. These annual reports will provide greater detail on what school districts and employees are paying for and the disparities between districts based on their size, region, and other demographic differences. (SF1201)
Did not pass:
HR1 School Vouchers
A House Republican proposal to legislatively opt Minnesota into $1,700 non-refundable federal education tax credits to scholarship granting organizations (SGOs) that were part of HR 1, or the One Big Beautiful Bill Act, did not become law. Opting Minnesota into the federal education tax credit would increase educational inequities and divert resources away from our public schools. The federal government could appropriate additional dollars directly to public schools but is instead subsidizing unaccountable SGOs.
School vouchers in other states predominately fund students from high-income families, who are already attending private schools. Many families cannot afford to donate $1,700, let alone pay for private school tuition, with the hope of a scholarship in the future. Diverting funding to unaccountable SGOs is ripe for fraud; the federal government has not provided any oversight mechanisms on how these dollars are spent. (HF3490)
Gun Violence Prevention Package
Minnesotans have faced untold gun violence in the past year with the assassinations of Melissa, Mark, and Gilber Hortman, the attempted assassinations of John, Yvette, and Hope Hoffman, and the murder of Fletcher Merkel and Harper Moyski.
There is no single bill that will end all gun violence, but a layered approach can dramatically reduce gun violence in our communities.
Senate DFLers fought this session to make Minnesota safer for everyone, putting together a comprehensive package to address gun violence.
The package addressed guns, prohibiting the sale of assault weapons and large-capacity magazines, banning ghost guns and binary triggers, and updating extreme risk protection order laws.
The package addressed mental health, including over $14 million for mental health funding, covering mental health reimbursement rates for providers, as well as school-linked behavioral health grants, family peer specialist grants, mobile crisis grants, and mental health grants for health care professionals.
The package addressed school safety, including $20 million in funding for school safety aid for public and private schools, which can be used for school resource officers, security and facility enhancements, crime prevention, and more.
Despite this comprehensive package, House Republican leadership chose politics over Minnesotans and refused to allow a vote on the package. Senate DFLers will keep fighting for an all of the above approach that protects lives and prevents the tragic incidents from happening to any family or any community in Minnesota. (SF 4067)
Civic Seals, Cursive, and Cell Phone Ban
Legislation to require cursive instruction, civic seal designations on diplomas, and a K-8 cell phone ban did not become law. The cursive bill would have required the Department of Education to include standards for reading and writing cursive in the next revision of English language arts standards (SF 173). The civic seal bill would have established the Minnesota Civic Seal Designation for high school students who have demonstrated excellence in civics education (SF 2565).
The cell phone bill would have required school district cell phone policies to prohibit cell phones and smart watches in school for students in grades K-8 and prohibit cell phones and smart watches in classrooms for students in grades 9-12 (SF 508). School districts are already required to have a cell phone policy in place but are not mandated to ban student use of cell phones.