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June 25, 2009

Commissioner Hanson
Mn Management & Budget
658 Cedar Street
St Paul, MN 55155

Dear Commissioner Hanson,

Several issues of critical importance to Minnesota were raised by legislators at last week’s meeting of the Legislative Advisory Commission (LAC). In addition to the follow-up requests for information you received in writing since then from Representative Sertich (reiterating questions raised at the June 18 meeting), and Senator Berglin and Representative Huntley (following up on specific health and human services questions), we are requesting information on the education-related concerns raised at the meeting and other issues related to the Governor’s use of unallotment. Please provide the following information in writing:

Education Requests

• What is your legal authority to require school districts to recognize an additional $.6 billion of property tax receipts in FY 2011?
• Doesn’t Minn. Stat. sec. 123B.75, subd. 5, mandate when property tax receipts will be recognized?
• Will you limit recognition of the operating referendum levy to 31 percent?
• What precedent can you cite for a recognition change of this magnitude to be made without specific legislative authorization? 
• What precedent can you cite for a recognition change of this magnitude to be made without specific legislative authorization after a bill to make the change was vetoed by the governor?
• Minn. Stat. sec. 16A.055, subd. 1(a)(3), requires you to keep the State’s general account books according to generally accepted government accounting principles.  What do those principles say about making this kind of change without legislative authorization?
• Is your authority to make this change limited to when Minn. Stat. sec. 16A.152, subd. 4, applies? 
• If not, what are the limits on when you may make this kind of change?
• How would the change be implemented?
• Would the change in recognition be permanent, i.e., would it be repeated for all future years?
  a.  If not permanent, for what fiscal years would it continue in effect?
  b.  If not permanent, where will the money come from to increase payments to school districts in the year when the change in recognition ends?
  c.  If permanent, what is your legal authority to make it permanent?
• What is your legal authority to delay payment of $1.17 billion in school aids?
  a.   Minn. Stat. § 16A.152, subd. 4?
  b.   Minn. Stat. § 16A.152, subd. 7?
  c.    Other?
• Which appropriations will be delayed to reach the $1.17 billion total?
• Will the $1.17 billion of school aids that are not paid by June 30, 2011, be paid at a later date? 
  a.     If so, when?
  b.     If so, where will the money come from to make the payments?
  c.     If so, under what legal authority?
  d.     If not, what legal authority are you relying on to not make the payments?
• For appropriations other than general education aid, i.e., those not covered by Minn. Stat. § 126C.20, what is your legal authority to make payments under those appropriations after June 30, 2011?
• If you lack legal authority to make payments after June 30, 2011, how will districts be able to borrow money in anticipation of their receipt?
• What is your legal authority to treat districts that are in statutory operating debt differently from others when unallotting?
• According to media reports, charter schools have requested special consideration.  Are you contemplating treating them differently?  And under what authority could you do this?

Other Requests

• An estimate of the number of seniors and people with disabilities affected by the renters’ credit unallotment.
• As part of your response to Representative Sertich’s June 24 letter related to the FY 12-13 projections, provide an estimate (in writing) of the deficit using the Governor’s assumptions as well an estimate (if different) using legislative fiscal staff assumptions (i.e., both education shifts bought back and the GAMC program continued as provided in current law).
• An estimate of lost federal funds as a result of the unallotment, including lost enhanced Medical Assistance payments.
• An assessment of the impact on taxpayers’ access to public services, including licensing, permits, resource and referral assistance, etc. that will be affected by reductions in state and local employees.

The unprecedented size of the unallotment planned by the Governor and the lack of information provided so far regarding the details and impact of the proposed unallotments make it difficult to advise within the short time frame under which the LAC operates. We therefore look forward to receiving this information as soon as possible, preferably by end of business June 29, so members can review it prior to the June 30 meeting.

Sincerely.

Larry Pogemiller
Senate Majority Leader

Margaret Anderson Kelliher
Speaker of the House

c.c.  Governor Pawlenty

 Read the original letter with attachments