The $25.73 billion K-12 education finance and policy law will increase funding to schools by $4.2 million in the 2026-27 biennium.

The law will provide a one-time $55.64 million compensatory revenue increase and $22.96 million more “to develop, continue or expand Grow Your Own new teacher programs … to develop a teaching workforce that more closely reflects the state's increasingly diverse student population and ensure all students have equitable access to effective and diverse teachers.” It will also provide inflationary increases to the basic education formula in the next biennium and beyond.

However, in addition to calling for a $420 million funding cut in the 2028-29 biennium when the state is forecast to have a multi-billion dollar budgetary shortfall, there are some 2026-27 biennial budget cuts, including reductions in teacher pipeline programs and a trim to the reimbursement for special education pupil transportation.

With special education costs continuing to grow dramatically, a Blue Ribbon Commission on Special Education is created. “By October 1, 2026, the commission must develop and present to the legislature and the governor an action plan for transforming special education services while maintaining a free appropriate public education for students with disabilities.”

If the commission’s action plan does not result in the 2027 Legislature passing at least $250 million in biennial cuts to special education funding beginning with the 2028-29 biennium, the department must reduce the special education cross subsidy factor until the total is reached.

Sponsored by Rep. Cheryl Youakim (DFL-Hopkins) and Sen. Mary Kunesh (DFL-New Brighton), the law takes effect July 1, 2025, unless otherwise noted.

2025 Special Session: SSHF5*/SSSF5/CH10

Dollars

In most cases, the law calls for funding to mirror that of the 2024-25 with annual inflationary increases; however, there are 24 spending increases, offset by 10 reductions to get to the net $4.2 million increase.

Increases include:

• $6 million in fiscal year 2026 for Department of Education legal costs;

• $4 million for a special education apprenticeship program to recruit and retain teachers with past experience;

• $2.04 million for a Department of Education operating adjustment;

• $1.1 million for General Counsel and Inspector General staff and case management and fiscal analysis technology to support program compliance and integrity at the Department of Education;

• $1.01 million operating adjustment for Minnesota State Academies for the Deaf and the Blind;

• $1 million in fiscal year 2026 for the Minnesota math corps program;

• $1 million in fiscal year 2026 for licenses to online databases for school media centers, public libraries, state government agency libraries, and public or private college or university libraries;

• $880,000 to assist school districts and charter schools implementing cardiac emergency response plans;

• $875,000 for READ Act implementation;

• $750,000 for activities of the Minnesota Youth Council;

• $535,000 operating adjustment for the Perpich Center for Arts Education;

• $492,000 to complete the licensure via portfolio online platform to streamline the portfolio submission and review process;

• $487,000 in additional consolidation transition aid;

• $120,000 for a working group to evaluate the use of seclusion as an emergency procedure and not as discipline;

• $110,000 for a compensatory revenue task force; and

• $30,000 in fiscal year 2026 for a working group on the age limit for children receiving special education services for developmental delay. (Art. 1, Secs. 5, 28; Art. 2, Sec. 24; Art. 3, Secs. 15-16; Art. 4, Sec. 30; Art. 7, Secs. 11-12; Art. 8, Sec. 18; Art. 9, Sec. 11; Art. 12, Secs. 8-10)

School districts will be reimbursed 95% for transporting students with disabilities in fiscal year 2026 and 90% beginning in fiscal year 2027. This will result in a reduction of $43.2 million in the 2026-27 biennium and $48.2 million in the 2028-29 biennium. (Art. 7, Sec. 6)

Other reductions include:

• $28.73 million for student support personnel aid;

• $19.63 million in school library aid;

• $1.05 million in fiscal year 2027 to the Sanneh Foundation;

• $1 million to support the development and implementation of the MTSS framework and the Collaborative Minnesota Partnerships to Advance Student Success school improvement model;

• $800,000 for Come Teach in Minnesota hiring bonuses;

• $300,000 for summer school food service replacement aid;

• $240,000 for adult-use cannabis education. (Art. 2, Sec. 24; Art. 3, Sec. 15; Art. 9, Secs. 8, 11)

A Compensatory Revenue Task Force will be established “to analyze the general education compensatory revenue formula, including the purpose of the program, the revenue levels of the program, the distribution formula for the revenue, the uses of compensatory revenue, and methods to evaluate the outcomes of compensatory revenue spending.” A preliminary report is due to the Legislature by Feb. 25, 2026, the final report by Oct. 15, 2026. (Art. 1, Sec. 27)

READ Act

Provisions in the law will change the READ Act local literacy plan to curricula that is evidence-based and will extend the deadline for implementing evidence-based literacy interventions to the 2026-2027 school year.

Several provisions deal with the relationship ending between the Department of Education and the Center for Applied Research and Educational Improvement (CAREI) in July 2025.

The law establishes training requirements linked to licensure for Tier 1 and Tier 2 teachers, clarifies that benchmarks determine grade level expectations, and requires the Department of Education to establish an advisory committee on the needs of dual language immersion programs’ implementation of the Read Act. (Art. 4, Sec. 8; Art. 5, Secs. 5, 11, 14-15, 18, 25, 29)

American Indian mascots, teacher training

Effective June 15, 2025, the law authorizes a school district to retain an American Indian mascot and symbols when approved by the geographically closest American Indian Tribe and the school district’s American Indian Parent Advisory Committee.

It also clarifies that Minnesota Indian Teacher Training Program scholarships are only available to students progressing toward educational goals in an early education through grade 12 educational setting. (Art. 6, Secs. 2-3)

Policy

Other policy provisions include:

• a district can begin the school year on or after Sept. 1 for the 2026-27 and 2027-28 school years because Labor Day is as late as it can be in 2026 and 2027;

• school boards are encouraged to adopt a process to include student representation to advise the board;

• the short-call emergency substitute teacher pilot program is made permanent;

• effective June 15, 2025, students will be required to learn overdose recognition, prevention and response as part of courses on substance use;

• a high school student can possess and administer an opiate antagonist to another high school student;

• school districts and charter schools will be encouraged to teach courses on healthy aging and dementia;

• a school district can dispose of surplus schoolbooks by donating them to a student in the district or a charitable organization;

• a statutory process is established to file a complaint over a violation of the federal Individuals with Disabilities Education Act;

• a school board can now adopt a P-TECH program without Education Department approval;

• a capital project referendum authority for a school district may continue if the district consolidates with another before the current authority expires, unless the consolidation plan provides otherwise;

• effective for taxes payable in 2026 and later, multiple school districts can apportion the levy for the costs of cooperative operation of an ice arena among cooperating districts;

• new standards are established for the Department of Education grant-awarding process; and

• educational agencies must comply with federal regulations when sharing special education student information. (Art. 1, Sec. 26; Art, 2, Secs. 3, 9-10, 12; Art. 3, Sec. 4, Art. 7, Sec. 5; Art. 8, Secs. 4, 6; Art. 12, Secs. 1, 3, 17)

Charter schools

To ensure financial and program integrity, several provisions make changes and modifications dealing with charter school standards, including prohibiting anyone who has violated the law from serving on more than one charter school board at the same time.

Further, charter schools must establish a finance committee; charter school board members, directors or chief administrators are subject to gift bans; and a school must publish information about charter contracts, school performance reviews, notices to terminate or not renew, and certain other notices to the school website. (Art. 5, Secs. 4, 9, 11, 16)

HF2184* / SF0472 / CH10