Dayton vetoes GOP-backed bill to reimburse public schools

/ 5 April 2012 / jennifer

Megan Boldt, Pioneer Press, April 5, 2012 –

As expected, Gov. Mark Dayton vetoed a Republican-backed plan to dip into reserves to start paying back the billions of dollars owed to Minnesota’s public schools, calling the plan a ploy and fiscally irresponsible.

“That tactic is superficially appealing. However, the same people must pay off either school debt or state debt: the people of Minnesota,” Dayton said Thursday, April 5.

The GOP-led Senate and House approved a bill Monday that would shift $430 million from state rainy-day funds to make a dent in the $2.4 billion owed schools. Republicans argued it’s important to continue whittling away the debt to schools.

House Speaker Kurt Zellers said it was disappointing to get Dayton’s veto letter, especially since the governor said how important it was to start paying schools back when state reserves got healthier.

“All of the sudden, we get a three-page letter that reads more like a fundraising letter for than a veto letter on something like paying back the school shift that we all agreed should be a first priority,” Zellers said. “It’s very disappointing to take political shots….I don’t think we should question motives.”

But Democratic-Farmer-Labor lawmakers argue those reserves aren’t healthy, and that the GOP is just playing politics to look good during the November election, even if it meant putting the state on an unstable financial footing.

DFLers reiterated that a better plan would be to close corporate tax loopholes to pay off what is owed, something they’ve been touting throughout the session.

“This is a simple choice. We can choose to make our kids the priority or continue to protect rich corporate interests,” said House Minority Leader Paul Thissen, DFL-Minneapolis.

Republican legislative leaders and Dayton struck a budget deal last session that included delaying an additional $770 million in state aid for schools to help close the state’s budget shortfall. That brought the total amount owed to $2.7 billion.

That amount is now about $2.4 billion after the latest budget forecast showed a $323 million surplus.

The Republican-backed plan would cut the state’s reserves from $657 million to about $227 million. There’s an additional $350 million in cash-flow accounts, which would leave the state with about $577 million on hand. Minnesota’s two-year budget is about $34 billion.

The reserve might seem like a lot of money, Dayton said. But the current rainy-day fund is still only half of the $1.3 billion that state budget officials recommend to protect Minnesota from financial volatility.

“Using the reserves to advance the shift payments would only make a bad situation worse,” Dayton said.

The House approved the shift payback 74-56, and the Senate on a 35-28 vote. Neither margin is enough to override Dayton’s veto.

Megan Boldt can be reached at 651-228-5495. Follow her at