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On-going budget problems impact education 
The 2010 legislative session officially began on Thursday, February 4th.  I reviewed the 2009 end-of-session results in the January update, reflecting on how education had fared.  Since then the Minnesota Management and Budget (MMB) office revealed that Minnesota will face a cash flow shortage in the spring.  Revenue collections do not match up with the timing of the bills that the state needs to pay.  Therefore, the MMB found a long forgotten 1986 law that requires  the state to reduce state payments to school districts that have sufficient fund reserves.  Essentially, the state is going to use school funds as their credit card.  And, unfortunately, it's the schools that will have to pay the finance fees when they borrow money to cover their bills.  The law does require the state to pay back these dollars by June 30.  However, the cash flow problems for the state are even more dire next year and many are concerned that the state will begin relying on school fund reserves to cover their cash flow problems as early as September. 

Aslo of concern to the education community is the $1.2 billion deficit that the legislature must erase this session.  State projected revenue is down significantly from the forecast that was used to shape the current two year budget.  The shortage is mostly due to lower than expected income tax revenue, attributed to lost jobs, lower wages and reduced hours. 

Governor Pawlenty continues to reject any revenue increases and most of the accounting gimmicks have been used up.  Thus, the general consensus at the legislature is that the $1.2 billion deficit will need to be balanced through cuts alone.  If spread evenly across all governmental entities, education would see a staggering $500 per pupil cut.  If K-12 is left untouched, other areas could see 20% cuts to their budgets.  No easy solution here.

What's next?
The governor will release his budget reduction recommendations next week.  Then the legislature will respond and begin to lay out their budget proposals.  I often hear that governors tend to get 90% of what they want.  I don't know if that is entirely accurate but the governor does hold a great deal of power.  Therefore, Pawlenty's budget proposal will set the stage for how education will be treated this session.  On Tuesday, the governor reiterated that he plans to protect schools from funding cuts.  Yet, the House, Senate and many Minnesotans may not be able to accept the deep and painful cuts that would be required to other important areas of public service if education is held-harmless. 

Education bills
On the first day of session, over 500 bills were introduced, most had to do with bonding projects.  Several of the bills were education related and of particular interest to SEE districts.  Check out Brad's blog for more detail.  

Representative Mindy Greiling (DFL-Roseville) has re-introduced the "New Minnesota Miracle" as HF 2431. Representative Pat Garofalo (R-Farmington) has introduced HF 2508, which would formalize the 73%/27% school payment shift and early property tax recognition shift enacted as part of the Governor's unallotment over the summer.  There are currently no Senate companions to these bills. 

HF 2645 (Greiling)/SF 2328 (Bonoff), a bill that would repeal MS 127A.46, the law that requires the state to withhold payments to school districts with sufficient fund balances as talked about above.

A chilling scenario on the budget deficit
The state is facing a $1.2 billion deficit this session.  However, the deficit for the next two years is projected to be $5.4 billion.  Many would like to believe that these deficits can be erased with cuts alone.  The Joint Religious Legislative Coalition (JRLC) pulled this information together on the current state deficit. 

If we...     

• Cut all kids from health care ($139 million) and
• Eliminate all cash welfare ($145 million) and
• Shut down 20% of nursing homes ($191 million) and
• Cut salaries 10% for all branches of government ($225 million) and
• Eliminate all Local Government Aid ($1 billion) and
• Close all the state parks ($52 million) and
• Eliminate House and Senate per diem ($4.2 million) and 
• Shut down 10 State College campuses ($146 million) and 
• Cut all state government operations by 50% ($1.75 billion)
   
  AND ADD IT ALL UP: It only reaches $3.6 billion of the $5.4 billion projected deficit!

Based on House Research Estimates of 2009 spending levels.

What You Can Do 

• Stay informed.   Take the time to read SEE Legislative Updates. I will work to keep you informed and will suggest ways that you can help.  Be prepared to act at critical times. This is going to be a rough session and the fate of education is unknown. Action can be as simple as sending an email or making a phone call.
  
  
• Pass these updates on and ask your friends to sign up to receive SEE's Legislative Updates so they too can be part of our network.  Now is the time to build education support networks so that when critical times occur during the legislative session we can respond.  In this political world, it is the voice of many that can make a difference.  

Working together, we can make a difference.  

If you have any questions or comments, please don't hesitate to contact me.
 
Deb Griffiths
Director of Communications and Community Outreach
Schools for Equity in Education
612-309-0089
Deb.Griffiths@schoolsforequity.org
www.schoolsforequity.org

Brad Lundell, Executive Director for SEE, writes a blog on almost a daily basis.  For up-to-date information about what is happening at the capitol visit Brad's Blog.