Monday, May 18, 2009

We Are Coming to the End. No deal has been struck yet and there doesn't appear to be one if the offing. In other words, this is the end of the legislative session but not the end of the effects of the legislative session. Things have reached loggerheads as the intellecutal--on principles and/or schools of thought and not mental candle power--gap on the approaches to raise revenue as part of the final solution are simply too far apart to be bridged at this juncture. It has boiled down to the Governor's bonding-for-cash versus the Legislature's tax increase package and a reluctance on both sides to reach across that divide.

Both sides have their ammo at the ready, so it's time to play Marvin Gaye's "Let's Get it On" and see where the chips fall with the public. In the absence of an agreement, this is going to be played out in dribs and drabs with the occasional activity spike throughout the summer.

The effects for the E-12 system are pretty clear and although not as dire as a cut to the education funding base, the almost certain action by the Governor to delay payments and employ the early recognition of property taxes will take $1.8 billion, if not totally out of the system, out of school districts' cash flow and force both fund balance reductions and short-term borrowing. I came into the session expecting a shift, but I thought that 80%/20% was probably the limit. The likely effects of the Governor's delaying of payments will go beyond that. But, it is too early to tell. At any rate, it is going to be a harrowing summer for school business managers throughout the state as discerning cash-on-hand issues will be a moving target.

Teacher Health Insurance Pool Conference Committee is Through. The conference committee on SF 915--the annual mandatory teacher health insurance pool legislation--is finished and the contents are as were reported yesterday. School districts who are currently self-insured (or will be self-insured by July 1, 2009) can opt out the pool by agreement between the local employees' bargaining units and the school board. Everyone else is in the pool. The conference committee report will be hitting the floor of the Senate later this afternoon.

Changes in Pension Bill. The portion of the pension bill--SF 191--that both remedied the deficit in the Teachers Retirement Fund and provided enhanced benefits for teachers was struck from the bill by the House Rules Committee last night (or this morning depending on if you believe morning starts at midnight or when the sun comes up). This is a good news/bad news situation (depending on who you are, of course) as deficiencies in the fund will be left uncorrected, but school district contributions will not go up in the short term, which would have been difficult given the tight budgets that exist throughout the state.

Negotiations Continue. Senator Pogemiller announced just prior to the Senate recess that legislative leadership and the Governor are continuing to meet in hopes of striking a deal. We are less than 13 hours away from adjournment, but I've seen more done in less time around here. That being said, I believe both sides are willing to bear the risks of unallotment.

I'll be back later with more to report.

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