Just a few days before the legislative session was set to adjourn, Gov. Walz and legislative leaders announced a bipartisan end-of-session budget agreement, making way to close out the 2026 legislative session.
The agreement totals $660 million in appropriations in FY27 and a budget reduction of $294 million in FY28. One-time spending includes a vehicle tab fee reduction, a property tax homestead credit, funding for Hennepin County Medical Center, funding for a rural and critical access hospital relief fund, and anti-fraud provisions (including funding to modernize county IT systems, additional funding for the Attorney General's Office, and funding to create a statewide Office of Inspector General). Legislative leaders and the governor also reached agreement on a $1.2 billion bonding bill.
The legislature worked through the weekend to pass the final bills by the midnight Sunday deadline. Members returned Monday for the tradition of retiring legislators giving final floor speeches and farewells. This year's class of departing members is sizable. In the House, 26 representatives have announced their exit after the 2026 session. Ten are retiring, seven are running for Senate, and nine are seeking other offices. In the Senate, 15 are retiring, and two are running for other offices.
Education Funding and Policy Provisions
For K12 education, the final budget agreement totaled $31.7 million in one-time funding, spread across several budget areas and bills. The legislature also passed a small omnibus education policy bill.
Compensatory Revenue
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Appropriates $10 million in FY27 and $1 million in FY28.
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Revenue for each district equals at least 65.9971% of the revenue calculated at the site in FY26, after adjustment for any decline in total enrollment between October 1, 2024, and October 1, 2025.
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Authorizes a school district to allocate up to 40 percent of its FY28 compensatory revenue to school sites according to a plan adopted by the school board.
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See district runs here.
Anonymous Threat Reporting Systems
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Appropriates $4 million in FY27 only for anonymous threat reporting system grants.
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Requires a school district or charter school to implement either a local or statewide anonymous threat reporting system by July 1, 2028, and establishes requirements for a local anonymous threat reporting system.
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Beginning January 15, 2028, MDE is required to submit an annual report.
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Provides data practices classifications for local and statewide anonymous threat reporting system data.
School-Linked Behavioral Health Grants
Appropriates $12.25 million in FY27 for school-linked behavioral health grants. Grant awards must allow a grantee to use grant funds for a partnership with a nonpublic or Tribal Contract school.
Children’s Mental Health Crisis Services Grants
Appropriates $3.8 million in FY27 only for children’s mental health crisis services grants under MS245.4889.
Read Act
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Extends, for one more school year, the option for a school district to reduce the hours of instruction by 5.5 hours for teachers to receive at least 5.5 hours of approved professional development.
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Excludes a teacher who was first enrolled in a Minnesota-approved elementary, special education, or early childhood education teacher preparation program on June 1, 2026, from additional training.
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Amends the definition of literacy specialist to include any Professional Educators Licensing and Standards Board licensed educator who has completed Read Act professional development.
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Beginning with the 2026-2027 school year, local literacy plans must include a description of how schools in the district will use the school library media center to complement students’ foundational reading skills.
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Allows an English language learner’s screening for the characteristics of dyslexia to be done according to vendor assessment guidelines.
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Directs a district to administer an approved reading screener to students in grades 4 and above who are not reading at grade level at least once per year until the student reaches grade-level proficiency.
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Requires districts to provide vendor-approved screening accommodations to students with documented accommodation plans.
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By October 1, 2026, directs MDE to establish an ongoing review process to identify curriculum and intervention materials using the Read Act rubric that’s posted on the department’s website.
Early Literacy Field Experience
Directs a teacher preparation provider that prepares teacher candidates to provide instruction in early literacy to require a supervised early literacy field experience aligned to evidence-based best practices in reading. This requirement applies to teacher candidates who enroll in preparation programs beginning in the 2027-2028 school year.
Paraprofessionals in Title 1 Programs
Aligns current law for meeting highly qualified requirements for Title 1 professionals with those of special education professionals.
Constitutional Amendment on Permanent School Fund Distribution Final Passage
The House and Senate took final action on legislation proposing a constitutional amendment regarding the distribution of the Permanent School Fund. Bills proposing constitutional amendments do not require the governor's signature, so this question will now appear on the November ballot.
Grooming Bill Final Passage
The House and Senate passed, and sent to the governor for his signature, legislation adding grooming as a criminal offense, requiring law enforcement to notify PELSB when a teacher is charged with certain crimes, and requiring the Department of Children, Youth, and Families (DCYF) to develop training for mandatory reporters.
Thank You!
Thanks for all your advocacy work this session. Whether you sent emails, made phone calls, or came down to the Capitol to talk with your legislators for MASE Day at the Capitol, your efforts are appreciated! I look forward to staying in touch over the interim and getting ready to do it all again next January!
