Minn. education panel warned of compensatory funding drop as state moves from paper applications to direct certification

The House Ways and Means education committee reviewed how changes in identification methods for free-and-reduced-price meal eligibility are expected to reshape compensatory revenue for school districts, and members heard repeated warnings from committee members and staff that some districts could lose funding when paper applications are no longer counted starting in fiscal 2026.

The committee’s fiscal analyst, Mr. Strom, told members that the state will rely on direct certification — a data match with Human Services programs — rather than combining direct certification and paper applications for the compensatory count used to distribute compensatory revenue. “In 2022, that count was the first count to include matching on medical assistance as well,” Strom said. He added that the change sharply increased compensatory revenue already, and the removal of paper applications will alter district counts going forward.

Why it matters: compensatory…