Monday, March 24, 2008

We're Back! The spring break is over and the Legislature re-kicks it starting tomorrow. The big activity tomorrow will be the House K-12 Funding Division's work on their version of the K-12 funding bill. I described that bill a bit last week, but as a refresher, the two main provisions are: (1) $51 per pupil unit in one-time money and (2) the ability to transfer $51 per pupil unit from the total operating capital fund to the general fund for the coming school year only. Little, if any, of the Governor's proposal is part of the bill.

During tomorrow's mark-up, I imagine there will be efforts to insert some of the Governor's recommendations into the bill and it is my guess that none of them will make it. One thing to remember is that the Governor paid for his new initiatives with a change in the payment schedule for districts in statutory operating debt.

As many of you know, most school districts receive 90% of their state funding in the same fiscal year with the remaining 10% coming in the subsequent fiscal year. For districts with statutory operating debt, the percentages are 97% and 3% respectively. The Governor recommended that districts in statutory operating debt be treated like all other districts and have their payment schedule conform to the 90%/10% framework. This would save the state approximately $6.1 million, but would force the cash-strapped districts in statutory operating debt to borrow more heavily to meet their budget needs. In other words, it would be a sort of "Robin Hood in reverse," ala Dennis Moore (pictured at the right with the incomparable John Cleese portraying the knot-headed highwayman) at the end of the old Monty Python sketch. That shouldn't be allowed to happen.

I'm hoping that things don't drag out for too long, but one never knows in this business.

How Does It End? As we move into the high-stakes portion of the session, the question asked most often is: "How is this going to end?" There are a number of possible endings, but two are most likely.

The first was outlined by Lori Sturdevant from the Minneapolis StarTribune a couple of weeks ago in the Sunday Opinion section. In her article, Sturdevant talks about the Governor taking things into his own hands. I doubt very much that he would do that unless he was left without a choice, as the political consequences can be very extreme--and generally not in a good way.


The other most likely scenario is that of an agreement between the Governor and the Legislature that would resemble some of what the Governor proposed (without the sales tax cut, but with the foreign operating corporation loophole closure), but would rely more on the current budget and cash flow reserves to close the budget gap. The trick in reaching an accord such as this one will depend on whether either side sees it in their best interest (politically, of course) to settle.

Other possibilities exist. The Legislature could pass the Governor's budget (or most of it) and try to "hang" him with it. A small possibility exists that greater tax increases could be enacted, but that is unlikely in the midst of a recession. Or they simply could use all of the budget reserves and some of the individual program budget reserves that exist throughout state government to cash-flow the state until the next budget cycle.

Whatever direction they choose, I can assure you that there's going to be a much fun (but then again, I consider root canal surgery fun) before the Legislature adjourns, most likely in early May. May 19 is the constitutional end-date and because it is the last day of the biennium, no legislation can be passed on that day due to a constitutional prohibition to that end. I'll try to keep you in the loop as things take shape.

Another Interesting Publication. The College of Education and Human Development at the University of Minnesota publishes "connect!" a magazine featuring discussion on education issues facing Minnesota and the nation. The latest issue features Stan Mack, Robbinsdale superintendent, on the cover and has an issue about the bitter referendum campaign in that community last November.

The latest issue of "connect!" can be found at this link:

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