(Capitol Commentary) Fiscal responsibility: let’s pay back the schools

By Bob Barrett, Rep. Dist. 17B 

The economic news in St. Paul is increasingly optimistic. Earlier this week we unveiled a forward-looking and fiscally responsible plan that would pay off last year’s school shift and begin to pay back the $2 billion school shift that we inherited from the former DFL majority.

As you may recall, the last two state budget forecasts (Feb. 2012 and Nov. 2011) revealed substantial surpluses – as opposed to consecutive deficits for the past five years – thanks to a new legislature holding the line on taxes and spending. With the funds resulting from private sector growth and public sector savings, we have completely refilled our budget reserve and cash flow account and made a substantial payment towards last year’s school shift.

House File 2083 would allow us to use reserves in order to pay back the remaining $400 million of last year’s school shift and to start on the $2 billion that the DFL borrowed from schools in 2010.

What is not generally known about the “school shift” is that the money kept by the state, both in 2010 and last year, has been received by schools in the form of “Aid Anticipation Certificates” from lending institutions. Schools receive their same allotments, just from a bank (rather than the state) at a very, very minor one half of a percent (.05%) interest rate. When adding in fees, the cost to schools has been less than 1 percent of the amount borrowed.

That being said, the rhetoric some people hear regarding the 2011 shift is over-the-top, especially in light of the fact that it will be paid back, in full, if Governor Dayton signs the bill into law. Once this happens we will begin to pay back the education shift from the 2010 DFL-controlled legislature.

It’s also important to know that last year we increased per pupil funding by $50 per student (after many years of stagnant funding) and repealed the state mandate that forced school districts to use 2 percent of their budget on staff development instead of retaining teachers. In the North Branch School District alone, more than $500,000 can now be used to retain 8-10 teachers that would otherwise have been laid off if this money wasn’t freed up.

Unfortunately, Governor Dayton would only sign a temporary repeal of this “staff development” mandate. What this means is that, in two years, the $500,000 that is currently used to retain teachers in local school districts will be used for staff development, causing staff layoffs, unless we are able to convince the governor to change his mind and work with us to continue, or make permanent, this repeal.

To further assist in paying back what is owed to public schools, I am co-author of House File 2068. The bill allows for ‘Racino’ at Running Aces and Canterbury Park, and the proceeds would go to help pay back the education shift. In addition, the bill directs part of the proceeds to reduce property taxes. I will also be the author on a bill that reduces government budgets by 1 percent with the proceeds used to pay back the shift.

Our Local Schools

As I have mentioned in previous e-mail updates, I have introduced a bill that is the first of its kind.

House File 2540 would create a new source of state aid for school districts with per pupil education revenue – like Chisago Lakes, North Branch, and Rush City – that is much below the state average.

This legislation is extremely important to our local schools as it begins to shrink the gap between the well-funded districts, like Minneapolis and St. Paul that receive $13,000 to $14,000 per child, and districts like those in our county which receive about 40 percent less per student.

This funding inequity has been created through many, many years of past legislators favoring metro schools to the detriment of all others. The bill will not, by itself, completely solve the problems of inequitable school funding, but it will help, with other related bills we are working on, move us in the right direction. The sooner the better.

Please contact me at any time with your questions or concerns: 651-296-5377 or [email protected], or via U.S. Mail at 413 State Office Building, St. Paul, MN 55155.

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