Nine of every 10 Minnesota schools now depend on extra money on top of the state funding formula to pay the bills. The money comes from voter-approved tax increases.
But what happens when voters reject a tax increase and schools make deep budget cuts? That's what happened in Moorhead, and budget woes for schools are affecting the entire city.
Seven years ago, Moorhead voters approved a $64 million bonding package to build new schools.
New housing developments quickly followed. New homes are still going up this fall in Horizon Shores, a development surrounding Horizon Middle school.
It's a development aimed at young families, with lots of parks and walking trails.
Developer Jeff Shaumann says new schools and a reputation for high quality education are key selling points for young families buying these homes. Shaumann pays close attention to the financial future of Moorhead schools.
"In the short term we don't see a negative implication, but one can only tighten their belt so much before they can't breathe," Shaumann said.
Shaumann worries about potential home buyers seeing a steady drip of bad news about larger class sizes and teacher layoffs.
"If we see declining education quality -- and I don't think we have yet -- but if the quality of education begins to suffer, those people aren't even going to come here and look," said Shaumann. "They're not even going to drive by the schools. They're not going to see the other beautiful things beyond schools that we as a real estate developer can offer people."
And if those new homes aren't built, the city won't collect the property taxes to recoup the millions of dollars invested in streets and sewers to support the new developments.
Moorhead City Manager Michael Redlinger says in the Fargo-Moorhead metro area, there's lots of competition for families. And quality schools are a marketing tool for the city.
"The true economic engine for the city is that family that's going to move here with children, get their children in the school district, pay property taxes to the city and county and the school district," said Redlinger.
“If the quality of education begins to suffer, those people aren't even going to come here and look.”Developer Jeff Shaumann
One of those economic engines is the Bagne family. They moved to Moorhead from the Minneapolis area about four years ago.
Amanda Bagne says they chose Moorhead because they felt it was a better place to raise a family, and they were impressed with the quality of education. She says strong orchestra and theater programs were among the reasons they chose to live in Moorhead.
But when her daughter started kindergarten this fall, Amanda and her husband Shawn used the state's open enrollment program to enroll their daughter in nearby Dilworth-Glyndon-Felton schools. Bagne teaches in the D-G-F district, but says that wasn't the primary reason she chose to enroll her daughter there.
Bagne says she liked the smaller class sizes and she wanted all-day kindergarten, something Moorhead doesn't offer.
"I don't know if we'll stay here, because as the kids get into the higher grades the class sizes get even bigger," said Bagne. "I have friends who have kids in upper elementary, middle school, high school, and their class sizes are 30, 40 kids per class. And that's not a good learning environment, in my opinion."
Bagne says several of her friends are also wrestling with deciding whether to stay in Moorhead or move. Amanda Bagne says quality schools top her wish list.
"I would probably choose to move to an area that had better education, even if the housing were more expensive," said Bagne. "I would choose a smaller house to get to a place that had good quality schools."
There are a lot of choices for families like the Bagnes.
Other Minnesota school districts in the Moorhead area have extra money from voter-approved tax increases. And across the Red River, Fargo schools are flush with cash from state revenue generated by the western north Dakota oil boom.
Fargo residents will get a $19 million reduction in school property taxes this year. And the district just spent $1 million on the first phase of a technology upgrade.
Fargo schools are also adding new programs like Chinese language, while Moorhead has cut back to one language offering at the high school.
But Fargo Superintendent Rick Buresh says he's not interested in capitalizing on Moorhead's financial woes. He says the two school districts collaborate in many areas like community education, and the Trollwood Performing Arts School.
Buresh says just a few years ago, Fargo schools were struggling to keep up with Minnesota education funding.
"We've got to be careful not to get too smug about our relative good fortune. That can turn on a dime," said Buresh. "North Dakota has just really been blessed by the big energy boom. That isn't something that was there because we were wise. It's a function of luck and good fortune to be situated where we are."
Moorhead Superintendent Lynn Kovash is painfully aware of the competition in education. Moorhead cut $4.5 million last spring, and will need to cut another $1.3 million in the next few months. Computers are on a nine or 10-year replacement cycle. Some classroom curriculum materials won't be updated.
Kovash wonders what's essential for education in a competitive marketplace, and what will happen if the district cuts to a core of reading, science and math.
"If we don't have a football team in Moorhead, somebody that wants football, they're going to go to the next community," said Kovash. "If we don't have an orchestra, somebody that feels that's an important part of education will go to the next community to find that, because we're in a competitive market. And then it affects our student enrollment. If we lose student enrollment we have less state funding. It becomes a downward spiral."
Kovash says she has no hope of financial relief from the state, but she expects the district will come back to Moorhead voters again, asking for a property tax increase.
She says in the meantime, she hopes students and parents don't vote with their feet.