Minnesota Senate noncommittal on school-debt plan
Megan Boldt, Pioneer Press, March 14, 2012 –
Senate Republicans are still mum about whether they support a House plan to start paying back the $2.4 billion owed to Minnesota public schools.
The legislation would shift $430 million from state rainy-day funds to repay schools.
“We’ll give that one a long, hard look,” Senate Majority Leader Dave Senjem said Wednesday, March 14, on Minnesota Public Radio.
Republican legislative leaders and Democratic Gov. Mark 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 state officials agreed to apply the $323 million surplus shown in the latest state budget forecast to the debt.
The plan, which could be on the House floor as early as Thursday, March 15, to pay back schools would cut the state’s reserves from $657 million to about $227 million. There’s an additional $350 million in cash-flow accounts, leaving the state with about $577 million on hand.
Democrats echoed their criticism of the plan Wednesday, arguing that depleting the state’s budget reserves is fiscally irresponsible. They’ve been pushing their own plan to close corporate tax loopholes to pay off what is owed.
The DFL proposal would get rid of the tax preference that allows corporations to shelter earnings offshore. They contend it would bring in about $450 million a year and that schools could be paid back in about six years.
Megan Boldt can be reached at 651-228-5495.