ABE Funding Cap
The United States government has a long history of promoting and regulating adult education. From the civics and literacy programs in the 1960s to the workforce training in the 1990s, the federal government continues to set a standard for all states to meet. In Minnesota, adult learners are very fortunate; our state values adult basic education and English language learning above the federal level. For every dollar the federal government funds adult education and English language learning, Minnesota matches with nine dollars. In 2020-2021, the federal government provided $5,900,000 while Minnesota provided $49,800,000. Beyond the larger share of funding, Minnesota also strives to have the funding equitably spread across the state. Twenty-two years ago, the state created a funding formula to make sure every Minnesotian has access to quality education.
The state allocates funds to school districts that partner with other school districts, libraries, and nonprofits to form a consortium. Consortia are reimbursed for the services they provided the previous year at an hourly rate. However, the state recognizes that it is more expensive to serve learners in higher concentrations of need or if they are spread over a larger geographic area. Therefore, the formula holds some funds from the total amount and allocates those funds to each consortium based on its population in three ways. First, as base aid which is determined by how many people live within the geographic boundaries of the consortium ($1.73 per person.) Second, the state looks at the rate of English Language Learners in the school districts in the consortium ($19.81 per English Language learner.) And third, the number of adults 25 years old and older with no high school equivalency ($8.56 per adult.) So each year, constortium are reimbursed based on the need of the population they serve and the total number of contract hours they provide.
This budgeting formula created a consistent and predictable process for adult basic education providers. It allowed communities to plan for adult learner services and as populations slowly changed and educational needs increased or decreased, it allowed school districts a solid funding formula to plan and provide great adult learning. However, as learners have grappled with the pandemic, these dramatic changes are creating some challenges for this funding formula.
In the 2020-2021 school year, adult education saw a 50% drop in the total number of contact hours across the state. And even this year, the state has not fully recovered and continues to have a 30% drop in hours from pre-pandemic rates. Because the total amount of funds has not changed, the hourly rate consortia are reimbursed will increase if there are fewer total hours across the state. The challenge comes from a safeguard that was placed in the original funding formula. The state wanted to make sure that programs that needed more funds received them. It also wanted to encourage efficient programs to innovate. Therefore, the funding law is written that no consortium can receive more than $22 per contact hour. What has been termed “the cap”.
While Metro North ABE is not at risk of hitting the cap, this might affect smaller programs whose proportion of aid to the population is higher. The worry is that this might cause some consortia to close, others may merge to create larger groups spread over larger distances, or not serve all adults in our state.