State Superintendent outlines K–12 'overarching' budget, warns most funding flows to local districts

Kirsten Basler, North Dakota’s State Superintendent of Public Instruction, told the Senate Appropriations — Education and Environment Division on March 5 that House Bill 10‑13 should be viewed as the statewide K–12 budget rather than a DPI bill and that 98% of the total appropriation is delivered to local school districts as per‑pupil foundation aid.

Basler said the department prepared a visual “spaghetti chart” to show the many entities that influence K–12 education beyond DPI, and reiterated the constitutional duty that the state must provide a uniform system of free public schools. “The Department of Public Instruction is the only constitutionally created K–12 agency,” Basler said, noting DPI’s oversight responsibilities for the State Library, the School for the Blind, the School for the Deaf and the Center for Distance Education.

Basler and DPI staff told senators the agency has 83 employees (measured as 82.5 filled FTE), and that the department’s operations represent about 2% of the overall K–12 appropriation. DPI’s operating budget is funded roughly 66% by federal funds, 25% general fund and 9% special funds. Jamie Mertz, DPI chief financial officer, said the largest single appropriation by far is the per‑pupil foundation aid, currently shown at about $2.3 billion on the long‑sheet.

Why it matters: committee members repeatedly heard that most policy decisions on classroom staffing and services occur at the district level because the state distributes the bulk of funding to local boards. Basler emphasized the “funding cliff” after ESSER dollars ended in December 2024 and described DPI initiatives aimed at sustaining programs that showed measurable impact.

Major programs and one‑time items discussed

- School food processing: DPI negotiates statewide contracts to process raw food into value‑added items (hamburger patties, chicken nuggets) for participating districts. DPI asked to increase the program by $2.5 million and said the program grows rapidly.

- Assessments and statewide contracts: About 15% of the agency’s operating budget funds student assessments; DPI said a planned school improvement contract (for the required continuous improvement process) is up for renewal and may require a higher appropriation.

- North Dakota First (intervention for chronically low‑performing schools): Basler said the 2023 law gives DPI new authority to intervene in schools that remain in the lowest performing cohort; DPI requested $1.5 million to implement that program and explained the agency expects to use partnerships rather than hire large numbers of FTEs.

- Literacy initiatives and reading programs: DPI described implementation funding for the “science of reading” (cited in North Dakota Century Code 15.1‑21‑12.1), training programs and county/tribal STEM and Native‑education grants. DPI noted it received a federal comprehensive literacy grant and budgeted years‑2 and 3 funding in the request.

- PowerSchool / student information system: DPI is changing how the student information system is paid (previously paid to a vendor under a single line) and said the line will transition as the new system is implemented.

Budget process, formula and connections to other bills

Basler and Jamie Mertz reminded the committee that House Bill 13‑69 (the state aid/foundation formula) is the mechanism that will distribute roughly 98% of 10‑13 to districts. Basler described North Dakota’s current approach as a per‑pupil weighted funding formula that applies weights for poverty and special education. Mertz flagged other pending bills that could change the per‑pupil total, including proposals that would add between $12.5 million and $175 million to the foundation aid total; he also noted bills affecting transportation and grants for math and “choice ready” programs that would change district receipts.

Staffing and vacancy pool

DPI officials said the department is staffed at 86.25 FTE authorized, with 82.5 filled and 3.75 vacancies (DPI described those vacancies as federally funded and intentionally left open for flexibility). Krista Schultz, DPI human resources director, said DPI transferred $789,815 into the statewide FTE pool after vacancies on July 1, 2023, and later requested and received $552,870 (70% of the pool amount) when positions were filled.

ESSER and the funding cliff

Basler reminded the committee that DPI distributed almost half a billion dollars in ESSER funds to districts during the pandemic; the ESSER close‑out and resulting “cliff” have prompted DPI to emphasize sustaining only those pilots that demonstrated measurable student impact.

Quotes

“The intent is…we’ll call it the overarching K–12 budget,” Basler said, urging the committee to look beyond DPI’s operating lines when evaluating HB 10‑13.

“We are a small but mighty team,” Basler said, noting DPI’s headcount decline from about 101 to 83 employees and citing Gallup staff‑satisfaction scores.

Discussion vs action

Presentations and requests dominated the hearing; no formal motions, votes, or final appropriations decisions occurred in the session excerpted here. DPI staff repeatedly described requests and anticipated increases, but committee decisions were not recorded in the transcript.

Clarifying details

- DPI staff count: 83 employees (82.5 filled FTE) reported by Basler.

- Per‑pupil funding: DPI and Mertz said about 98% of the appropriation in HB 10‑13 is delivered as per‑pupil foundation aid and related grants; House Bill 13‑69 implements the distribution formula.

- ESSER: “almost a half billion dollars” distributed to districts 2020–2024, according to Basler; DPI said there were no state auditor audit findings on ESSER spending.

- School food processing request: $2.5 million increase requested to cover growth.

- ND First implementation request: $1.5 million requested (DPI said it would largely contract for services rather than create FTEs).

Proper names and acronyms used consistently

- North Dakota Department of Public Instruction (DPI) - House Bill 10‑13 (agency omnibus appropriation / K–12 budget) - House Bill 13‑69 (state aid / per‑pupil formula) - North Dakota Century Code 15.1‑21‑12.1 (science of reading definition referenced)

Speakers (listed in first reference order)

- Kirsten Basler — State Superintendent, North Dakota Department of Public Instruction (government) - Krista Schultz — Human Resources Director, North Dakota Department of Public Instruction (government) - Jamie Mertz — Chief Financial Officer, North Dakota Department of Public Instruction (government) - Adam Tesher — School finance officer (mentioned as present) (government) - Chairman Sorbach — Committee chair (government)

Searchable tags: DPI, K‑12 budget, HB1013, per‑pupil aid, ESSER, ND First, school food processing, PowerSchool

Provenance: topic introduction and finish excerpts from the committee transcript

- topicintro excerpt: "Good morning Chairman Thorbauge, members of the committee. My name is Kirsten Basler. I am the state superintendent for the North Dakota Department of Public Instruction." (timecode 00:05:56 — transcript segment)

- topicfinish excerpt: "Thank you for your time. I'm sure we'll be spending a bit more time together. I look forward to working with you during this session..." (timecode 00:32:25 — transcript segment)