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Rose Hermodson has a secret.

An open one, at least at the State Capitol, where the recently retired education lobbyist tried for two years to sell her plan, with color-coded maps, data and talking points.

The plan: countywide school districts. A single school system per county, a single superintendent - created by mergers, mergers, mergers.

To Hermodson, it's the sensible way to preserve school quality as Minnesota's smallest districts fade. And it would save money as the state faces a projected $4.6 billion deficit.

Jack Geller sees a different solution, one he hopes legislators will consider in 2003: a change in state funding formulas that would give school districts more money for the first 1,000 kids in a district.

Everyone would win, said Geller, president of the Center for Rural Policy and Development at Minnesota State University, Mankato.

And the cost? A pittance, he said, considering the state's $9 billion K-12 investment.

Cost savings, cost increase. School district consolidation, school district preservation. The choice could hardly be more stark, nor could the need for some form of action be any greater, what with withering school enrollments and a shrinking state treasury.

A Star Tribune analysis of state education data reveals that nearly one-fifth of Minnesota's 343 school districts are fighting combinations of deep enrollment declines, dwindling budget reserves and-or student flight. At least 40 districts could be targets for mergers, based on the state's checklist for consolidation.

But Minnesotans cling to their schools despite mounting budget troubles and sliding enrollments. And state officials are loath to close schools, no matter how compelling the numbers might be.

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Countywide case

Does it make sense for Otter Tail County to include all or part of 20 school districts? What about the existing St. Louis County School District, a sprawling territory ranging from Duluth to the Canadian border? It is split across the middle by six much smaller school districts.

Entire counties, 38 in all, have fewer students collectively than the 3,200 kids at Anoka High School.

"Maps are great on this," Hermodson said, referring to the common-sense appeal of envisioning multiple districts merged into one.

A countywide system, she argued, would allow students to tap into a wider variety of classes - calculus, for example, or French. Teachers who now are isolated would have more peers to interact with - and learn from.

A county that now has multiple superintendents would have just one. It also could have more specialized management, perhaps the curriculum and professional development support that most small districts can't afford.

Communities no longer would see superintendents forced to take on the complexities of special education management or the added roles of business manager or transportation director, according to Hermodson's talking points.

Districts would be better aligned with county social service agencies to share the support for low-income families.

Sure, the system would have just one countywide school board, she said, and that is a big stumbling block in a state that prizes closer local control. But greater power could be given to school sites, according to her documents. Parents, staff and community members could help make hiring and budget decisions.

On the most volatile issue - how to use existing schools - Hermodson states "the goal is not to close schools." Her emphasis always has been, she said, to increase administrative efficiency and provide more options for students.

An observer, however, may wonder why Otter Tail County, for example, needs eight separate high school programs.

Hermodson acknowledged in her documents that counties with many students would need something other than a countywide plan. But even metro counties, she said, could benefit from a redesigned administrative structure.

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Help for small schools

Greg Thorson, an associate professor of political science at the University of Minnesota, Morris, who along with a colleague wrote the Center for Rural Policy funding proposal pushed by Geller, says he has a better idea.

First off, he said, let's dispense with the countywide plan. It is a threat to small towns, a proposal that easily could be used in outstate areas "to rally the forces - that the folks in St. Paul want everyone to live in one community in their county."

In his view, any savings that might result from any school closings that accompany mergers eventually would be offset by declining property tax revenues when citizens leave and businesses close.

The state, instead, should invest more in its small schools, he said.

He has recommended changing state aid formulas to provide larger increases to the first 1,000 kids in a district.

The state's current aid formula, he said, provides about $5,000 per student. The plan would raise funding by 8 percent for each district's first 500 students, and then 4 percent for students 501 to 1,000. Students beyond 1,000 would stay at the basic level.

No district would lose under the plan, Thorson said, yet the smallest districts, about 80 of which have fewer than 500 students, would gain more help than they might otherwise.

The funding increase would cost about $77 million, or less than 2 percent of total state education revenues, he said.

The recommendation follows a statewide survey of superintendents conducted by Thorson and a fellow researcher. It proves, they say, that small schools are at a disadvantage among districts in the areas of building quality, course offerings and teacher recruitment.

The center issued the survey results under the title "Small Schools Under Siege." Thorson said it was not an overstatement.

"I obviously anticipated that there would be some disparities between large and small school districts," he said. "But I was surprised that the disparity could be found in virtually all categories - systematically, smaller schools were getting the short end of the stick."

For example, 47 percent of the smallest districts, defined as those with fewer than 415 students, offered calculus, he said. That compares with 98 percent of the largest school districts - those with more than 2,557 students.

While only 0.8 percent of school buildings in large districts needed replacement, 6.3 percent of buildings in small districts needed replacement. The figure jumped to 12 percent for small school districts with low property tax levies.

To those who would argue that schools ought to look at structural changes to address the problems caused by falling enrollments, Geller acknowledges that the center's proposal won't change the demographic realities outstate.

But they are our smallest, most fragile districts, he said, and they need special help. He doesn't buy the suggestion that sending more money to these big spenders might be throwing good money after bad.

"On a per-pupil basis, their costs are extremely high," he acknowledged. "But in terms of overall dollars, it's budget dust."

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A look at the math

For those attuned to the money side of the equation, the two ideas may come down to a choice between $77 million more for K-12 schools or a countywide system that delivers savings. But how much savings?

A Star Tribune analysis of school district spending indicates that a countywide system for the 76 counties outside the 11-county metro area could save millions a year in administrative and districtwide costs.

A total statewide number could not be calculated without knowing how the districts would combine. Still, here are some examples.

- The eight school districts that make up the majority of Otter Tail County have a combined enrollment of about 8,400 students. They also had combined 2001 administrative-district support expenditures of more than $5 million, busing costs of $3.8 million, operations and maintenance costs of $5.1 million and food service costs of $2.5 million.

How does that compare with a single 8,000-student district?

Look at Forest Lake. It spent $3.9 million on administration in 2001 - more than $1 million less than the Otter Tail districts. Its food service costs amounted to $2.8 million, operations and maintenance was $4.4 million, and its busing expenses totaled $3.6 million.

Granted, Forest Lake is not as rural as the Otter Tail districts, making transportation cost comparisons problematic.

Overall, however, a single 8,000-student district in Otter Tail County might spend $1.6 million less on administrative and other districtwide expenses than do the eight separate districts in the county.

- A similar comparison between the Polk County schools, with a combined 5,400 students, and the Bemidji district, with its 5,154 students, suggested that a single Polk County school district might spend $1.4 million less in the four spending categories than do the county's seven separate districts.

- Savings also could be produced by a merger of Stevens County districts. Its three school systems, with a combined 1,342 students, spent a total of $2.96 million in the four spending areas, compared with $2.47 million in Aitkin, a 1,341-student district, a potential $486,000 savings.

The Star Tribune analysis does not take into account any curriculum improvements that might be gained, particularly for students in tiny districts.

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Quality vs. community

The more fundamental, painful choice represented by the two options may boil down to: better schools or a town's identity?

To Morris Superintendent Keith Redfield, a countywide school system wins out. His district seems well-positioned to be the hub of a Stevens County system.

Morris already draws 18 percent of its student body from neighboring districts through open enrollment, the system that allows kids to cross boundary lines to attend schools elsewhere.

Morris is the county seat, and its voters approved a $27 million school building project last month, primarily a new elementary school, providing enough space to house, for example, all of neighboring Chokio-Alberta's kids.

Redfield said he would not describe Morris as an educational oasis. Open enrollment's lofty goal of having kids choose the best education for them often comes down to simple geographic convenience, he said.

But a countywide model is "so obvious," the superintendent said, "so obvious."

The sentiment is very different about 12 miles away.

Chokio-Alberta lost 54 of its kids to its bigger neighbor this year. In a state that bases funding on a per-pupil basis, that means a loss of about $280,000 in state funding - or $5,200 per kid in Chokio-Alberta. It's a huge loss for the home district, which is left with only about 225 students.

At the elementary school in Chokio, however, they still are holding on, investing in new computers and math and reading books, doing all they can for their students. In the fifth-grade classroom recently, multitasking teacher Deanne Marty put 15 kids through math exercises, then current-events quizzes, then aerobic workouts.

There she was, in the back row, stretching, kicking, thrusting, as a mixed-aerobics video played: "Up. Down. Step. Turn. Step. Back."

After her kids left for the day, the teacher said: "We used to have a phy-ed teacher. Boy, do we miss that."

The physical-education cut came three years ago, when the elementary school also lost its arts teacher. Two years ago, the librarian position was dropped. This school year marks the first in which the district's superintendent also serves as elementary and secondary school principal.

Chokio-Alberta has shrunk to such an extent that the district, already the product of a merger, must partner with another to field a football team.

Marty is well aware that Morris stands ready to embrace her shrinking district. She thinks back to 1970, when she first arrived. An Air Force brat who moved from school to school, she did not understand the tensions lingering from the 1968 merger of the former Chokio and Alberta districts.

"Now I get it," she said. "I understand it."

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Political winds

The Center for Rural Policy's plan to boost funding for small schools plays well in small towns. In Henning, voters asked this fall to approve a school-levy request received fliers promoting the plan, urging them to make calls.

"Legislators!" it read. "Small towns need their schools."

That message has been received in St. Paul.

About two years ago, the countywide schools plan was being mentioned as part of Gov. Jesse Ventura's "Big Plan." But before the plan was formally unveiled, the administration back-pedaled.

"We just feel that for every benefit there is a problem," education Commissioner Christine Jax said at the time.

Hermodson pressed on, however, hoping to persuade legislators this year to at least order a study of the idea. She eventually received 10 minutes at the end of a Senate committee meeting to make her case.

Legislators have rejected merger mandates before. In 1991, when former state education commissioner Gene Mammenga pushed a plan to consolidate or reorganize 248 school districts, he failed to convince a single legislator.

Hermodson said that legislators reminisced to her about a different merger proposal years ago and about the lesson they took from that one: School mergers mean death at the polls for anyone who signs on.

Sitting outside a Minneapolis coffee shop recently, she said citizens ought to just see the maps of all those outstate counties filled with districts. They should look at the enrollment figures, too, she said.

Think of all the superintendents in such an area, Hermodson said, compared with just one principal at Anoka High School, with its 3,200 students. (She acknowledged that Anoka may have a few assistant principals, too.)

As committed as ever, she would press the case again.

Now, if anyone were ready to listen . . . .

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- The writers are at alonetree@startribune.com and jwalsh@startribune.com.

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The case for bigger districts

Rose Hermodson argues that countywide school districts would make more sense in Minnesota than the system now in place, and says maps of current school district configurations within their respective counties support her view that the way it's done now is erratic and illogical. Here are three she has pointed to. Otter Tail County now contains all or part of 20 school districts. Stevens County has fewer districts, but has a county seat district - Morris - willing to take in its smaller neighbors. The sprawling St. Louis County School District is made up of two parts separated by smaller school districts.