State ought to pay back the local schools

/ 6 April 2012 / jennifer

Albert Lea Tribune Editorial, Friday, April 6, 2012 –

It’s too bad a bill that prompts the state to start repaying the $2.4 billion it owes school districts likely will not see its way into law.

The DFL Party is on the wrong side of the issue when it comes to repaying the school districts.

The sticking point is that the measure calls for the state to delve into its reserves to the tune of about $430 million. And the bill calls for ending the union-secured practice of laying off teachers based on seniority rather than performance.

Republicans argue the state has a surplus and could go into rainy-day funds safely to pay back its schools. DFL members say the state, if it wanted to be fiscally prudent, could pay its debts swiftly if it would close special corporate tax loopholes.

The DFL Party is right about the loopholes, but paying back the school districts sooner rather than later is the greater issue. What’s good for the functionality of school districts is good for local economies across the state.

Every time the state balances its budget on the backs of the school districts by increasing the biennium shift, it forces the districts to take loans or to go into their reserves. And reserves are important to maintain bond ratings, to maintain cash flow (especially payroll obligations) and for unexpected hazards.

So it is a matter who gets their ox gored, the reserves of the local schools or the reserves of the state. We say the school already had their turn at bat. It’s time for the state to step up to the plate.

The Minnesota House passed the bill on March 15, and it’s unknown how it will fare in the Senate.