July 15, 2011

July 15, 2011

Once again we use kids to balance the state budget
So it looks like in order to get the state back up and running, we have a budget balancing deal. The GOP’s offer to balance the state budget by once again shifting payments to schools has been accepted by the governor with the proviso that there be no policy provisions. A dangerous 60/40 payment shift was offered rather than increasing taxes on the top 1%. (What does this mean? See below.)

“Dayton says the deal is a bad one for Minnesota, but better than accepting an indefinite government shutdown. He seemed relatively satisfied with the total amount of state spending the deal would allow, but objects to borrowing $1.4 billion instead of finding new revenue,” (MinnPost, July 14).

The per pupil formula will increase by $50 a student and according to news sources the reasoning is to help schools defray the cost of borrowing. The deadline for bills is Friday night at 10:00 p.m. This is when we will see the actual wording of any bill. A special session will be called as early as Monday and the deal will be put to the rank and file members. By all accounts if this passes it may be on a straight party line vote.

“But let’s be very clear about what this budget deal means for Minnesota: rather than asking the richest 0.3% of Minnesotans to pay their fair share, Republicans instead chose to solve the state’s budget crisis with a borrow-and-spend proposal that does nothing to solve the long-term financial challenges. I’m disappointed that Republican’s refusal to compromise resulted in such a fiscally irresponsible budget solution, but I respect Gov. Dayton for doing everything in his power to end this shutdown and get Minnesotans back to work.

“It would be premature to say whether or not any members of our caucus will support this budget agreement, considering that many specifics of the deal are still to be determined.” —Senator Tom Bakk (Minnesota Public Radio, July 14)

Speaker Zellers and Majority Leader Koch are sure they have the votes from their caucus to pass the bills.

How will this affect schools and what is their plan to pay it back?
For schools this means:

  • more borrowing and since our state’s bond rating has been lowered this borrowing will be more expensive;
     
  • more voter approved local levy attempts meaning higher local property taxes for those districts lucky enough to win; and
     
  • a continuation of the  tremendous funding insecurity for schools.

For those districts unable to borrow or pass levies it means fewer opportunities for kids, and charter schools will have a very difficult time since they may have less borrowing capacity. In a nutshell, this is bad for kids.

Now the REALLY BIG QUESTION: What is the plan to pay this shift back? None.
To date the only one who has floated even the idea of a tax specifically to pay schools back was Senator Bakk in 2010. The bill had a finite time frame and a definite use. The bill never made it out of committee.

Everyone may be relieved that this current crisis has been averted, but the question now is what will the legislature do to ASSURE that schools are solvent? Again remember: they have a constitutional mandate to do just that.

Early in the 2011 session a legislator stated that the budget could be balanced if the state simply did not pay schools the 30% promised. His logic was that schools were already working without it. So what happens if that same logic rules the day in the 2012 session? The only “plan” I keep hearing is that revenues will grow astronomically and the 40% will be there next year. Hmmm….  

The total school aid shift alone will increase the budget deficit
in the next budget cycle by $2.1 billion dollars.
So let’s not be surprised when that happens.

BTW…
This still leaves many critical areas of the state budget in crisis. Balancing the Health and Human Services budget without increased revenue will cause pain.

What does a 60/40 shift mean?
Statute has schools paid 90% of their state aid in the current year and 10% in the next year. This has always been used as a way to adjust for student population changes. Current legislation passed in 2010 changed those percentages to 70/30 as a way to keep money in the hands of the state into the next year and thereby “balance” the state budget. Now the proposal is 60/40.

Let’s look at what that would mean for you: If your boss said we need to keep the company solvent so we will pay you 60% of your paycheck this year and settle up with you next year. As the employee you still have the same obligations to your employer and the same bills to pay at home.

What Can I Do?
Each and every legislator who votes for this deal should have a plan to pay schools back
. Ask them that. Hold them accountable for this action.

Ask your legislators!
Question of the Week:
“What is your plan to pay schools back?”

Today @ the Website:
Budget agreement = school aid shift

Mary Cecconi, Executive Director (mary@parentsunited.org)
Parents United for Public Schools
1667 Snelling Avenue N., St. Paul, MN 55108
651-999-7391
www.parentsunited.org

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