Legislators vote to repay schools with reserves

/ 2 April 2012 / jennifer

Jim Ragsdale, Star Tribune, April 2, 2012 –

Gov. Dayton has called the GOP plan “irresponsible.”

The Minnesota Legislature on Monday passed the Republican plan to use budget reserves to repay a portion of the state’s debt to schools.

The vote was 75-56 in the House and 35-28 in the Senate on the final version of the plan, which takes more than $430 million from reserves and uses it to make a down payment on the state’s debt to school districts.

DFL Gov. Mark Dayton has called the plan fiscally irresponsible, but has stopped short of indicating whether he would veto the bill.

The issue is politically volatile because both parties want to be on the side of paying back debts to schools as they head into legislative elections in November.

In order to balance its budget, the state has shifted and delayed payments to schools and now has a debt of $2.4 billion.

Rep. Pat Garofalo, R-Farmington, chair of the House Education Finance Committee, said, “When you have cash on hand, the first thing you do is, you pay your debts.” He called the plan’s opponents “deadbeat Democrats.”

DFL legislators said it was irresponsible to draw down the reserves at a time when the state faces deficits in the next budget cycle. They offered an alternative plan to close corporate tax loopholes and provide a new stream of long-term revenue to pay back the schools. Republicans rejected that plan.

“Let’s not fall into the same trap,” said House Minority Leader Paul Thissen, DFL-Minneapolis. “Let’s not take shortcuts to cover the tracks of our bad decisions.”

Jim Ragsdale • 651-925-222-1288