Wednesday, December 05, 2012

Budget Forecast Has Some Good News.  It's not a slam dunk of a budget forecast, but it's a far sight better than what has been experienced since the economic downturn of 2008.  The best news in the budget forecast is that the combination of improved economic performance and smaller than expected expenditures since the February forecast has put approximately $1.3 billion in additional revenue on the bottom line for this fiscal year.  This $1.3 billion will go to pay back school districts throughout the state by lessening the delay in state aid payments enacted as part of the 2011 budget balancing bill.  While this won't put any additional revenue into school district base budgets, it will give most districts more breathing room at the margins as it will reduce the need for short term borrowing and reducing fund balances to meet cash flow needs.

After the buyback of the shift, approximately $1.1 billion of the aids payment shift will remain, distributed almost evenly between the delay in state aid and the early recognition of property tax revenue.

There will be a lot of political bantering as a result of the forecast, but it is important to note that 80% of the improved budget situation for the remainder of this biennium is attributable to stronger economic performance, which the Legislature and Governor have little control over.  It is for the most part a cyclical improvement resulting from an improved economy and not a structural change in budget status arising from government decisions.  The Legislature and Governor can take some credit from the $262 million in savings resulting from lower-than-expected expenditures, but one would have to look more closely into the budget numbers to see if any of these savings are a result of more people working and, as a result, needing less government assistance.  A closer look at the numbers is necessary to more clearly delineate these dynamics.

The budget news remains largely the same for the next biennium.  The end-of-session budget forecast projected a $1.079 billion shortfall for the 2014-2015 biennium.  An anticipated dip in national (and by extension state) economic performance and the resulting imbalance in projected revenues and projected expenditures added another $16 million to the estimated shortfall, raising it to $1.095 billion.  Added to the expectation that economic growth will not be as strong in 2013 as it was in 2012 is the "fiscal cliff" discussion and the fear that the Congress and the Obama Administration will not reach an accord that will put in place a tax and budget package that will avoid the tax increases and spending decreases that may bring about another recession.

More to think about.

Here is the link to the page at the Department of Minnesota Management and Budget website that outlines the November forecast.  The forecast summary provides the most concise description of the situation, but the entire forecast supplies a more in-depth analysis, especially of the state appropriation part of the equation.


Tuesday, December 04, 2012

Senate Majority Releases Committee Assignments.  The Senate DFL majority has released its committee assignments for the upcoming biennium.  There's a lot of experience and balance and it will be interesting to see how this works dynamically.  The Senate Republicans have not released their assignments yet, but they will likely be forthcoming shortly.  The House, with twice the members and a few more standing committees, have a slightly more complicated task when it comes to doling out committee assignments and that process usually takes a little longer.

Here are the Senate DFL committee assignments for the education-related committees:

Senate E-12 Funding Division:

Chair Wiger, Charles W.
Vice Chair Johnson, Alice M.
Bonoff, Terri E.
Dahle, Kevin L.
Halvorson Wiklund, Melissa
Hoffman, John
Jensen, Vicki
Kent, Susan
Saxhaug, Tom
Stumpf, LeRoy A.
Torres Ray, Patricia

Senate Education Policy Committee

Chair Torres Ray, Patricia
Vice Chair Dahle, Kevin L.
Carlson, Jim
Clausen, Greg
Franzen, Melisa
Halvorson Wiklund, Melissa
Johnson, Alice M.
Kent, Susan
Wiger, Charles W.

At SEE, we also follow the Tax Committees closely and here are the rosters of the majority caucus members on those two committees:

Senate Tax Committee 

Chair Skoe, Rod 

Vice Chair Rest, Ann H.
Bakk, Thomas M.
Dziedzic, Kari
Eaton, Chris A.
Koenen, Lyle
Marty, John 
Reinert, Roger J.

Senate Tax Reform Committee

Chair Rest, Ann H.

Vice Chair Koenen, Lyle
Dziedzic, Kari
Eaton, Chris A.
Skoe, Rod 

I will post more committee assignments as they become available.

For those of you who have Facebook pages, you might want to "friend" the Minnesota Senate Information  page for the latest updates on legislative matters.