NCPA - National Center for Policy Analysis


October 4, 2005

The Minnesota legislature is considering a new program, Education Access Grants, that will enable diversity in school choice and have a positive fiscal impact on the state, says Ericca Maas of the Friedman Foundation.

Education Access Grants will assist low-income students -- those who fall at or below 250 percent of the federal poverty level -- in Minneapolis and St. Paul, and will give them the choice of attending private school. This program is designed to improve the Minneapolis Public School District (MPSD) by creating a revenue surplus, says Maas.

Under the program:

  • Only students from families earning less than $48,375 will be eligible for an Access Grant.
  • They will not affect the district's access to locally levied revenues; however, if the tax revenue is directly tied to student enrollment, the district will have to change the terms of the levy in order to keep the revenue stable in absolute terms.
  • Since the amount spent by the state on each Access Grant student will be significantly less than a child who stays within the public school system, nearly $3.3 million will be made in the first year, rising to $14.2 million in the sixth year.
  • For six years after a given student leave a district school, MPSD will continue to receive a substantial amount of its per-pupil state aid.
  • This stability revenue will result in a positive fiscal impact of up to $8.2 million in the first year, $9.4 million in the third year and then will begin to decline.
  • While the stability revenue decreases, the total benefit to the state will increase; in year six, the benefit will equal $14.2 million.

Furthermore, Access Grants will allow Minnesota to move forward with a school choice program that is financially advantageous to all parties involved, concludes Maas.

Source: Ericca Maas, "A Fiscal Analysis of Proposed Education Access Grants in Minneapolis," Milton and Rose D. Friedman Foundation: Educational Choice: School Choice Issues in the State, July 2005.


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