School officials turn down lawmakers’ repayment offer

/ 27 February 2013 / eunice

Tim Post, Minnesota Public Radio, February 27, 2013 – Lawmakers at the Capitol are offering to pay back the money they borrowed from schools, but education officials are politely declining.

As a way to balance the state budget, lawmakers in recent years delayed funding to schools. At one point, schools received about 60 percent of their funding at the beginning of the school year and the final 40 percent came at the end of the year. It’s called the “school shift,” and it has left Minnesota schools with a $1.1 billion IOU from the state.

But school leaders say they have reasons why they don’t want the money paid back right away.

Northfield Public Schools Superintendent Chris Richardson said the money is scheduled to be paid back within a few years anyway.

So for now, he and other school leaders would rather the state use its money to provide new funding for schools, money that would likely continue into the future.

“If all the money is taken to pay back the shift in one lump sum, there will be no dollars left over to fund any increases in state aid,” Richardson said.

When lawmakers delayed state funding to fix the budget, some schools had to borrow money to make ends meet. That has not been much of a problem, Richardson said, since the rate for schools to borrow operating funds is less than half a percent.

As much as delaying repayment may make perfect sense to schools, it is not something that has registered with those behind bi-partisan efforts at the Legislature to pay back the money.

Rep. Paul Marquart, DFL-Dillworth, who chairs the House Education Finance Committee, touts a DFL effort to pay back about half of what schools are owed and increase their per-pupil funding.

“I think we can both pay back the shift and also invest in children and schools,” Marquart said.

Rep. Kelby Woodard, R-Belle Plaine, proposes legislation to pay the schools the entire $1.1 billion owed, but leaves out the increase in funding.

Woodard believes paying back schools should be done before the state offers schools any increase in funding.

“My take is we need to take care of our current obligations, then we can talk about what those future promises are,” Woodard said.

The desire to repay schools sooner rather than later may be a byproduct of last fall’s election when both parties decried the budget-balancing tactics that led to the debt and promised to be more fiscally responsible.

To that end, Woodard is also pushing legislation that would make it more difficult for lawmakers to shift school payments in the future.

Gov. Mark Dayton’s budget proposal this session offers $344 million in new funding to schools. His plan pays the money owed to schools by 2017.

But the amount actually owed by the state could change, depending on a new state budget forecast that comes out Thursday. If any extra revenue comes into state coffers, by law it goes directly to schools.