Opinion: Tie School Funding to Need, Not Net Tax Capacity

When Minneapolis voters approved Question 1 on the November 2024 ballot, they raised the school district's capital project levy from 2.249 percent of the district's net tax capacity to 4.728 percent, adding about $20 million a year for technology and bringing the levy to roughly $38 million annually over ten years. I voted yes. I would do it again. But I want to be honest about what that phrase, "net tax capacity," actually does.

Net tax capacity is a measure built on property values. Tying a levy to it means the money a neighborhood generates tracks the worth of its real estate, not the needs of its children. The formula reads as technical and neutral. It is neither.

I am not arguing that we should pay less. Our neighborhood, on the hill, can afford its share, and the schools deserve the money now. I am arguing that we should stop pretending the structure is fair. A city's wealthiest blocks generate the most under a property-based levy, and the children who arrive at school with the most stacked against them are rarely the ones living in the houses producing the biggest contributions.

This is not a uniquely Minneapolis problem. School-finance scholars have spent decades documenting how property-based funding entrenches disparities between districts and within them, and Minnesota's system shares the basic flaw. The state's general-education formula does attempt to equalize, but the local levies layered on top reintroduce the very property-wealth advantage the formula is meant to soften.

There are alternatives worth debating: levies weighted toward student need, state aid that more fully decouples a child's resources from a neighborhood's real estate, less reliance on property as the base. None is simple. But the conversation cannot even begin while we keep calling the current arrangement neutral.

So I will keep voting for the levies, because the schools need the money. And I will keep saying that a better-designed system would not make a child's education depend so heavily on the assessed value of the homes nearby.

[unverifiable: the author is identified in the original only as a neighborhood resident; no name was supplied for attribution.]