Sunday, March 16, 2014

Weekend Wrap Up.  The end of last week proved to be particularly hectic with a number of bills of interest being heard and the House of Representatives releasing its budget targets.  After the House Education Finance Committee heard its "doughnut hole" bills on Wednesday, it was the Senate's turn to do the same on Thursday.  The bills were heard in reverse order than they were in the House, with the "universal" bills authored by Senator Bonoff (SF 2233) and Senator Jensen (SF 2370) heard before the bills authored by St. Cloud's Senator Pederson (SF 1938) and Senator Nelson (SFs 1982 and 2079).

Of these bills, the "richest" would be Senator Jensen's SF 2370.  This bill would provide all districts currently below the $424/PU in metropolitan area location equity revenue discretionary levy authority up to that amount.  In other words, the only districts that wouldn't enjoy a new advantage would be those school districts that currently are eligible for the metropolitan level of location equity revenue.  The largest possible increase would go to those non-metropolitan districts with an enrollments less than 2,000 pupil units that currently receive no location equity revenue.  It is important to remember that districts with a current referendum greater than $724/PU would not receive any new revenue from the proposed change, but may receive some property tax relief.  Non-metropolitan districts that currently receive $212/PU in location equity revenue would receive a bump up to $424/PU, but, again, this may not translate to an increase in revenue.  Another feature of SF 2370 is that districts that receive small schools revenue are eligible for the entire $424/PU in discretionary levy authority.

Senator Bonoff's SF 2233 is a scaled-back version of SF 2370, under which all non-metropolitan districts with enrollments between 960 and 2,000 pupil units being eligible for non-metropolitan location equity revenue of $212/PU.  This is the classic "doughnut hole" solution as it deals with those districts that currently receive neither location equity revenue or small schools revenue.  As in the case of SF 2370, this may not mean any new revenue for a number of districts.  One change that needs to be incorporated into this bill is an option for districts that receive small schools revenue the option of choosing either small schools revenue or location equity revenue.  As Medford superintendent Rich Dahman pointed out in his testimony, Medford receives very little small schools revenue and opting for location equity revenue would be a greater advantage for them.

Senator Pederson's and Senator Nelson's bills would provide a small set of districts (particularly Rochester and St. Cloud) the metropolitan level of $424/PU in location equity revenue.

The price tags for the bills vary widely.  SF 2370 would provide eligible districts with a total of $49.71 million in new revenue, with $27.18 million coming in levy and $22.52 million coming in aid.  SF 2233 would provide $7.04 million, with the split being $3.41 million in levy and $3.63 in aid.  The price tag for SF 2233 would go up slightly if districts that currently receive small schools revenue were given the option of receiving their current level of small schools revenue or participating in the location equity revenue program.

The testimony on SF 2370 featured a number of superintendents.  With the MASA conference in town, a small group of superintendents made their way to the committee to share their perspectives on the bill.  Featured superintendents included Windom Superintendent Wayne Wormstadt, Montevideo Superintendent Luther Heller, Holdingford Superintendent Eric McWilliams, Medford Superintendent Rich Dahman, and Milaca Superintendent Jerry Hansen.  I want to thank SEE superintendents Dahman and Hansen for sharing their thoughts for our organization.

It will be interesting to see where the discussion goes from here.  I anticipate that the "doughnut hole" issue will be addressed, but it is difficult to ascertain how much in terms of resources will be dedicated to this purpose and there is always competition for resources.  Stay tuned.

House Budget Targets Released.  The House of Representatives released its budget targets on Friday.  There are some significant departures from the Governor's budget recommendations.  Noteworthy is the House's education budget target of $92 million.  It is unclear if the House target includes higher education in that number(the Governor proposes spending an additional $22 million for the University of Minnesota and MnSCU), but the narrative accompanying the targets indicate that the House majority wants to do something in terms of providing resources for teacher evaluation, especially for those districts that currently do not participate in the alternative compensation program.  The budget target also appears to provide resources for expanding the early childhood scholarship program.  Another departure from the Governor comes in the area of tax cuts.  The Governor has targeted $616 million for tax cuts, while the House comes in at $550 million.

Here is a story from MPR outlining the House's budget targets.  The actual House document is included in the story.

MPR Link:

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