Committee lays over literacy aid reform bill that shifts funding formula and creates a hold‑harmless year

Senate File 3186, a legislative rewrite of Minnesota’s literacy aid program, was amended in committee and laid over for possible inclusion in a future omnibus bill after testimony from school finance officials and education advocates.

Senator May Quaid, sponsor of the measure, said the bill simplifies the program name to "literacy aid," creates a hold‑harmless provision so districts will receive the same amount next school year, and phases in a new distribution formula in fiscal year 2027. "There have been a lot of collaborations from school districts, literacy leads, superintendents, and other educators who kinda came to the table to figure out what's the best way that we can distribute this," she said.

Under the plan described to the committee, the bill would disconnect literacy aid from standardized test scores and instead, in FY27, distribute the first $30,000,000 based on enrollment, send $5,000,000 based on student poverty counts, and $5,000,000 based on English-learner counts. The sponsor said the change is intended to better target dollars to districts serving higher-need students and to provide flexibility for districts to use literacy aid to meet the goals of their local literacy plans.

Matt Shaver, senior policy director at Ed Allies, testified in support and said the current literacy incentive formula "gives more money to districts with fewer struggling readers, and less money to districts with more struggling readers." Shaver described the proposed changes as a phased approach that preserves short-term predictability while aligning distribution to student need.

Committee members asked questions about alternatives. Senator Croon asked why the committee did not instead allocate equal per-pupil amounts to all districts; Quaid replied that the proposal includes a baseline per-pupil component with additional targeted dollars for poverty and English‑learner concentrations. Senator Crude raised concerns that tying multiple formulas to compensatory aid could create large per‑pupil differences across districts and suggested a return to a simple per‑student approach.

The committee first adopted an A‑1 amendment by voice vote, then laid the bill over for possible inclusion in an omnibus bill. No final passage occurred in this hearing; the measure will await further action.