Wednesday, February 16, 2011

Forgot about the Shift. In my earlier post on the Governor's budget recommendations, I neglected to mention that the document calls for the maintenance of the education shift at its current level of 70% current year/30% subsequent year. This saves the state approximately $1.3 billion and closes the projected $6.2 billion revenue shortfall by that amount. The Governor's budget proposal does call for a repayment of the shift beginning next biennium in two increments of ten percentage points apiece, bringing the funding schedule back to 90%/10% by the 2015 fiscal year.

Here is a link to MinnPost's Beth Hawkins' story on the shift (note the quote from our good friend Mary Cecconi over at Parents United):

I'm all for paying back the shift as soon as possible, but I'm also for protecting the base level of funding going to Minnesota school districts. I've always thought of the shift in the same way as the food spread at the Lundell family reunion. A lot of it looks horrible, but it tastes better than it looks. In other words, the shift is ugly policy, but it beats going hungry.

There is no question that increasing the shift has caused more districts to utilize short-term borrowing and that has had a very uneven effect district-to-district. District size and other factors contribute to a system where borrowing rates vary and, in some instances, the available interest rate for districts can be relatively high given perceived market interest rates.

I don't think there is any doubt that the 70%/30% payment schedule will be part of the budget solution as we move forward in the short-term. Even though the Governor's proposal to pay back the shift is something we can all support, I'm not certain the shift can be taken back to the 90%/10% level on a schedule as aggressive as the one the Governor proposes.

No comments: