House GOP plans to tap budget reserve to reduce K12 shift

/ 7 March 2012 / jennifer

Tom Scheck, Minnesota Public Radio, March 7, 2012 –

Republicans in the Minnesota House are proposing to tap two thirds of the state’s budget reserve to pay back a portion of a K12 school shift they used to balance the budget in 2011.

Rep. Pat Garofalo, R-Farmington, says the measure is part of a K12 bill that will be heard in committee tomorrow. He said paying back schools with $430 million from the state’s budget reserve is a better use of the money.

“If you look at accounting principles, it’s better to reduce your debt and reduce your liabilities than to have that cash sitting around,” Garofalo said.

A nonpartisan budget analyst in the House said the proposal could force the state to enact short-term borrowing to meet cash flow needs. DFL House Minority Leader Paul Thissen says they’re open to the option but would prefer Republicans find a way to pay the entire $2.4 billion shift back.

“This is one way to do it and I think it deserves consideration,” Thissen said. “But I also think we ought to be putting a plan in place that is paying back the school shift over time and getting that into law.”

Thissen said they’re proposing to eliminate a tax break for corporations that operate overseas to pay back the schools over time. Governor Dayton and GOP legislative leaders relied on the accounting trick to erase part of a $5 billion budget deficit.

The K12 school shift is expected to be a major talking point during the 2012 campaign.