The Key Takeaway
South Washington County Schools expects to receive $174.2 million in General Education Aid during the 2026–27 school year. Although this appears as one line in the district budget, it is actually the combined result of numerous state funding formulas.
The largest component is the basic formula, which provides $154.2 million, or approximately 88.5% of the total. The remaining aid reflects student needs, operating capital, local property wealth, transportation responsibilities, and other adjustments.
The district’s budget identifies seven individual components totaling $166.1 million. It does not separately identify the formulas responsible for the remaining $8.1 million included in the General Education Aid total.
One Name, Many Formulas
When a school district budget lists “General Education Aid,” it can sound like one large state grant. In reality, it is the result of several formulas working together.
Minnesota first calculates a district’s authorized general education revenue. Some components are paid entirely through state aid. Others are divided between state aid and local property taxes based on the district’s property tax base.
This creates an important distinction:
- General education revenue is the total amount a district is authorized to receive under the formulas.
- General education aid is the portion paid by the state.
- General education levies are the portions collected through local property taxes.
For 2026–27, South Washington County Schools budgets $174,188,819 in General Education Aid.
SoWashCo’s Budgeted General Education Aid
The district’s preliminary budget provides the following breakdown:
| Component identified by the district | 2026–27 amount | Share of total General Education Aid |
|---|---|---|
| Basic formula | $154,177,954 | 88.5% |
| Compensatory revenue | $5,747,351 | 3.3% |
| English learner revenue | $2,561,903 | 1.5% |
| Operating capital aid | $2,488,075 | 1.4% |
| Local optional aid | $536,982 | 0.3% |
| Alternative attendance adjustment | $284,467 | 0.2% |
| Gifted and talented revenue | $266,118 | 0.2% |
| Components identified in the budget | $166,062,850 | 95.3% |
| Not separately identified in the budget | $8,125,969 | 4.7% |
| Total General Education Aid | $174,188,819 | 100.0% |
The district describes the seven components listed above, but those figures do not add up to the reported General Education Aid total. The budget does not explain which formulas make up the remaining $8.1 million.
That amount may include other elements of Minnesota’s General Education Aid calculation, but the budget document alone does not provide enough information to assign the difference to specific formulas.
Basic Formula: $154,177,954
Basic revenue is the foundation of Minnesota’s school funding system and, by far, the largest component of SoWashCo’s General Education Aid.
The calculation begins with:
Basic formula allowance × adjusted pupil units
For fiscal year 2027, corresponding to the 2026–27 school year, Minnesota’s basic formula allowance is $7,683 per adjusted pupil unit. The allowance increased by 2.69 percent from the prior year under the state’s inflation-adjustment law. See: Minnesota Department of Education: FY2027 Formula Allowance
That represents approximately 88.5 percent of the district’s total General Education Aid.
Adjusted pupil units are not the same as student headcount
The district projects an average daily membership of 18,689 students for 2026–27:
| Grade level | Projected average daily membership |
| Pre-K | 414 |
| Kindergarten | 1,200 |
| Grades 1–3 | 3,883 |
| Grades 4–6 | 4,284 |
| Grades 7–12 | 8,908 |
| Total | 18,689 |
Minnesota does not simply multiply this headcount by $7,683. Average daily membership is first converted into pupil units using weights that vary by grade level and certain programs. Additional statutory adjustments, including some tuition-related adjustments, are then applied to determine the district’s adjusted pupil units.
The district’s $154.2 million projection corresponds to approximately 20,067 adjusted pupil units, compared with its projected average daily membership of 18,689 students.
This distinction matters when trying to independently reproduce the district’s revenue calculation. The published student count and the adjusted pupil-unit count are not interchangeable.
Editor’s Note: The district’s published figures do not appear to use the same adjusted pupil-unit count across various calculations. Dividing the Basic Formula projection by the $7,683 formula allowance implies approximately 20,067 adjusted pupil units, while dividing Gifted and Talented Revenue by its $13 allowance implies approximately 20,471. Minnesota law uses the district’s adjusted pupil units for both calculations. The budget does not explain the approximately 403-pupil-unit difference, so at least one of the published amounts or underlying assumptions may be outdated or incorrect. If the basic-formula APU is correct, gifted and talented revenue would be approximately $260,876, not $266,118. If the gifted-and-talented APU is correct, basic revenue would be approximately $157,275,738, not $154,177,954, a difference of about $3.1 million. If the district corrects their numbers, we’ll post an update here.
Compensatory Revenue: $5,747,351
Compensatory revenue provides additional funding based on the number and concentration of students from lower-income households.
That equals approximately 3.3 percent of total General Education Aid.
The district describes its projection as approximately $1,561 for each qualifying pupil. Beginning in fiscal year 2027, however, Minnesota’s statutory calculation is more complex than one flat amount per eligible student.
The formula considers:
- Students eligible for free meals
- Students eligible for reduced-price meals
- The concentration of qualifying students at each school
- A statewide compensatory allowance
Students eligible for free meals count fully in the formula, while students eligible for reduced-price meals count at one-half. The resulting revenue is calculated at the building level.
Compensatory revenue must be used to meet the educational needs of students who are underprepared or performing below the level considered appropriate for their age. Although the district has some flexibility to allocate a portion districtwide, this is restricted basic-skills funding rather than unrestricted operating revenue.
The district’s fund-balance projection places the full $5,747,351 in its Basic Skills reserve for 2026–27.
English Learner Revenue: $2,561,903
English learner revenue provides additional funding for students who qualify for English language development services.
That represents approximately 1.5 percent of total General Education Aid.
The district states that Minnesota provides $1,775 for each reported English learner, with eligibility determined under testing standards established by the Minnesota Department of Education.
The complete state calculation also includes funding tied to the concentration of English learners within a district. The district reports only the combined projected amount, not the number of qualifying students or the separate portions of the calculation.
This funding is intended to help cover the additional costs of language instruction and services needed for students to access the academic curriculum.
Operating Capital Aid: $2,488,075
Operating capital revenue supports eligible building, equipment, curriculum, and technology-related expenses.
The formula includes:
- A per-pupil amount
- An adjustment based partly on the age of district buildings
- A division between state aid and local property taxes
Eligible uses can include:
- Equipment purchases and repairs
- Technology systems
- Curriculum materials
- Building improvements
- Accessibility improvements
- Certain health and safety costs
- Vehicles and other capital equipment
Operating capital is part of the General Fund, but it is restricted to eligible capital purposes. It should not be treated as fully interchangeable with unrestricted classroom operating revenue.
Local Optional Aid: $536,982
Local Optional Revenue authorizes Minnesota school districts to receive $724 per adjusted pupil unit without a voter-approved referendum. A portion of Local Optional Revenue is paid by the state (Local Optional Aid), and a portion is collected through property taxes (Local Optional Levy).
The precise allocation between the two sources depends primarily on a district’s property wealth per student. Districts with less property wealth receive a larger share from the state, while districts with greater property wealth collect more through their local levy. For 2026–27, SoWashCo expects to receive $536,982 in state-paid Local Optional Aid.
Editor’s Note: The district will collect most of its authorized Local Optional Revenue through local property taxes (Local Optional Levy). The district’s budget combines the Local Optional Levy with its voter-approved operating levy in a single $62,261,948 “Operating Levy and Local Operating Levy” figure. It does not separately disclose how much of that amount comes from each levy.
Alternative Attendance Adjustment: $284,467
General education funding generally follows the school a student attends. However, SoWashCo may still incur transportation costs for students who live within the district but attend a charter school located within its boundaries.
Minnesota charter schools may choose either to provide their own transportation or use the transportation services of the school district in which they are located. If a charter school does not provide transportation, SoWashCo must transport qualifying students who both live in the district and attend that charter school. The state then increases SoWashCo’s General Education Aid to help fund that responsibility.
The calculation also includes a reduction for SoWashCo resident students who attend the Minnesota State Academies. SoWashCo’s budget therefore reflects the net effect of:
- Additional aid for charter school students SoWashCo is responsible for transporting
- A reduction for district residents attending the Minnesota State Academies
The district states that the calculation uses an allowance of approximately $358 per qualifying pupil unit, less the adjustment associated with students attending the Minnesota State Academies. For 2026–27, SoWashCo expects a net total Alternative Attendance Adjustment of $284,467 across these two adjustments.
Gifted and Talented Revenue: $266,118
Minnesota provides $13 per adjusted pupil unit for gifted and talented education. Gifted and talented revenue must be reserved for:
- Identifying gifted and talented students
- Providing gifted and talented programming
- Training staff to serve gifted and talented students
The district notes that gifted and talented expenditures exceed the amount generated by this formula. As a result, it presents the program within the broader unassigned and undesignated portion of its General Fund even though the state-generated revenue itself has restricted uses.
Editor’s Note: The district’s published figures do not appear to use the same adjusted pupil-unit count across various calculations. Dividing the Basic Formula projection by the $7,683 formula allowance implies approximately 20,067 adjusted pupil units, while dividing Gifted and Talented Revenue by its $13 allowance implies approximately 20,471. Minnesota law uses the district’s adjusted pupil units for both calculations. The budget does not explain the approximately 403-pupil-unit difference, so at least one of the published amounts or underlying assumptions may be outdated or incorrect. If the basic-formula APU is correct, gifted and talented revenue would be approximately $260,876, not $266,118. If the gifted-and-talented APU is correct, basic revenue would be approximately $157,275,738, not $154,177,954, a difference of about $3.1 million. If the district corrects their numbers, we’ll post an update here.
Other General Education Formulas
Minnesota law includes additional components within its general education revenue and aid calculations. Depending on a district’s circumstances, these can include:
- Extended time revenue
- Declining enrollment revenue
- Small schools revenue
- Secondary sparsity revenue
- Elementary sparsity revenue
- Transportation sparsity revenue
- Equity aid
- Pension adjustment revenue
- Transition aid
- Referendum equalization aid
- Shared-time aid
- Online learning aid
SoWashCo’s budget does not provide individual 2026–27 amounts for these components.
Some formulas, such as small schools and geographic sparsity revenue, are unlikely to generate substantial funding for a large suburban district. Others, including referendum equalization, equity, pension, extended time, or declining enrollment adjustments, could contribute to the General Education Aid total.
However, the district’s published budget does not provide enough information to determine which of these formulas account for the $8,125,969 difference between its total General Education Aid and the seven amounts it itemizes.
A complete reconciliation would require the district’s detailed General Education Aid entitlement report or another component-level state funding worksheet.
Why the Total Can Change
A change in General Education Aid does not necessarily mean the Legislature changed the basic formula.
SoWashCo’s total can also change because of:
- Enrollment growth or decline
- Changes in grade-level pupil weighting
- Student mobility during the year
- Changes in free- and reduced-price-meal eligibility
- Changes in English learner enrollment
- Changes in local property values
- Building-level compensatory calculations
- New or expiring referendum authority
- Transportation responsibilities
- Prior-year data corrections
- Changes in restricted components such as operating capital
For 2026–27, SoWashCo projects average daily membership will fall from 19,219 students to 18,689 students, a decline of approximately 530 students.
The increase in the statewide formula allowance helps offset the revenue effect of that decline, but enrollment still influences the district’s basic formula, gifted and talented revenue, local optional revenue, and several other calculations.
The Bottom Line
SoWashCo’s $174.2 million General Education Aid projection is not one flat per-student payment.
The district’s budget identifies:
- $154.2 million from the basic formula
- $5.7 million from compensatory revenue
- $2.6 million from English learner revenue
- $2.5 million from operating capital aid
- Approximately $1.1 million from local optional aid, alternative attendance, and gifted and talented revenue
- $8.1 million that is included in the total but not separately explained
The basic formula is clearly the dominant component, accounting for approximately 88.5 percent of the total. But the smaller formulas still matter because they respond to different student needs, responsibilities, and local financial conditions. Some also carry restrictions that limit how the district may spend the money.
When evaluating this revenue, the most useful questions are:
- Which formulas changed from the prior year?
- Were those changes caused by state policy, enrollment, student needs, or local property values?
- How much of the revenue is restricted?
- What components make up the $8.1 million not itemized in the budget?
- How closely do the original budget estimates ultimately match the state’s final entitlement calculations?
Those questions provide a more complete picture than looking only at the $7,683 basic formula allowance or the $174.2 million total.
Primary Sources
- South Washington County Schools, 2026–27 Preliminary Budget, approved June 25, 2026, particularly pages 5–8 and 27
- Minnesota Statutes, Section 126C.10: General Education Revenue
- Minnesota Statutes, Section 126C.13: General Education Aid
- Minnesota Statutes, Section 126C.05: Pupil Units
- Minnesota House Research: Minnesota School Finance Guide
- Minnesota Department of Education: FY2027 Formula Allowance