Takeaways from the 2026-27 Minnesota Governor’s Biennial Budget

What’s changing

The Governor proposes to end the Alternative Teacher Professional Pay System (ATPPS)—commonly called Q Comp—starting in FY 2027.

• FY 2026: Program continues as-is
• FY 2027 onward: Program is eliminated

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Fiscal impact (big picture)

• State aid reduction
  • −$78.7M in FY 2026–27
  • −$173.1M in FY 2028–29
• Local levy reduction
  • −$39.5M per year starting FY 2027
• One-time reconciliation
  • $8.837M in FY 2027 to settle FY 2026 obligations due to 90/10 payment timing

This is a real funding cut, not a restructuring.

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What Q Comp is (and why it’s being eliminated)

• Created in 2005
• Voluntary program allowing districts and unions to bargain performance-based pay systems
• Provides up to:
  • $260 per pupil (state aid + levy)
  • Charter schools receive equivalent state aid
• Currently used by:
  • 184 school organizations
  • Serving ~55% of Minnesota teachers (~39,000 teachers)

Governor’s rationale:

• Since 2014–15, all districts are already required to operate Teacher Development & Evaluation (TDE) systems
• Q Comp and TDE now duplicate each other
• Many districts already meet TDE requirements without dedicated funding
• The state no longer wants to fund two parallel systems

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What replaces Q Comp

Nothing new.

• All districts must still operate Teacher Development & Evaluation (TDE) under existing law
• No replacement funding is provided for Q Comp incentives
• MDE’s Educator Workforce & Development Center will provide technical assistance only

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What happens to existing Q Comp money

• Any remaining Q Comp reserve balances:
  • Must still be used for teacher incentive pay
  • Cannot revert to district general funds
  • Can be spent until exhausted

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What this means for districts

• Loss of:
  • Performance-based compensation funding
  • Dedicated funding tied to professional development structures
• Districts must:
  • Maintain TDE systems with fewer dollars
  • Renegotiate collective bargaining agreements that referenced Q Comp
• Impact varies:
  • Districts heavily invested in Q Comp feel this most
  • Districts already operating TDE without Q Comp funding see less disruption

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Bottom line

This proposal:

• Eliminates a long-standing teacher compensation program
• Cuts more than $170M per biennium in education funding
• Leaves districts with mandatory evaluation systems but no dedicated funding
• Shifts professional development and incentive costs fully onto local budgets