I have written about the "Doughnut Hole" before--the quirk from the 2013 omnibus tax bill that leaves districts with enrollments between 960 and 2,000 with neither small schools revenue nor location equity revenue--and progress is being made in developing a possible solution to the problem. The proposal would make all districts in the state eligible for location equity revenue. Districts that already receive small schools revenue would have the option of receiving either--but not both--of the formulas. There is a break point where a district that receives small schools revenue would be better off taking the location equity revenue, but it has to be remembered that location equity revenue ($212 per pupil unit for non-metropolitan districts) has to be subtracted from a district's referendum revenue per pupil. In other words, if a district has in excess of $512 per pupil in referendum revenue, there will be no new revenue generated directly by the adoption of location equity revenue (there would be a minor increase in equity revenue because a reduction in referendum revenue caused by the adoption of location equity revenue would increase the amount of revenue a district would receive in the "sliding scale" portion of the equity revenue formula).
A bill is being drafted that would accomplish this. It will likely be introduced the first day of the 2014 legislative session (February 25). The cost of the bill is just under $7 million, with the bulk of the revenue coming greater equalization to prevent statewide property tax levies for schools to increase. The first tier equalizing factor would go up to $909,000/PU to accomplish this. This action would deliver property tax relief to all but a handful of school districts in Minnesota.
I will keep you posted on developments related to this issue.