Hoard cash or pay off debt?
Rep. Pat Garofalo, MinnPost, April 6, 2012 –
I am disappointed that Gov. Mark Dayton chose to veto a bill that would reduce the state’s K-12 education payment shift to its lowest point since the Legislature adopted a 30 percent shift in 2010. The bill, which was rejected by the governor on Thursday, would repay the extended shift increase passed as part of the budget agreement with Gov. Dayton last year, as well as make the first repayment toward the $2 billion education shift left over from previous Legislatures.
This measure was a matter of economic responsibility and proper prioritization. After learning that the state has a $1.2 billion total budget surplus for the current biennium, the response from many members of the Legislature was to use that money to pay back the school shift. After all, if a family pays all of their bills and finds they still have money leftover, shouldn’t they use some of that money to pay down any outstanding debts?
Prudent financial management says when you have cash on hand, the first thing you do is pay off debt. Debt reduction saves money in interest costs, and leaves more money for hiring teachers, upgrading classroom equipment and other educational services.
After Gov. Dayton and the Legislature settled on moving to a 40 percent shift in July, he publicly spoke out against it even though he signed it into law. Now he has vetoed a bill with a smaller education shift than he has ever proposed in his time in office. Despite his statements seeming to oppose the education shift; Gov. Dayton in the last two years has both proposed the largest school shift plan and rejected the smallest.
Despite my disappointment with the governor’s choice to veto this bill, I am hopeful that we can come to some compromise to begin to make payments on our obligations to the schools and students of this state. I believe that our government must follow suit by responsibly managing our budget without raising taxes or ignoring our debts.
My hope is that this bill does not die here. I will continue to work to try to convince the governor that this is the right thing to do and reach a compromise, not just for our state’s budget, but for the schools and children of Minnesota.
Rep. Pat Garafolo, R-Farmington, chairs the House Education Finance Committee.
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