Wednesday, April 06, 2016

More Great Testimony.  As I previewed yesterday, superintendents Mark Matuska and Tammy Berg-Beniak provided testimony on Senator Kevin Dahle's SF 2231 in the Senate Education Finance Committee.  SF 2231 would index the equalizing factors for both tiers of the debt service equalization program.  Both superintendents gave compelling stories about the challenges they have faced in their districts--both have extremely low levels of property wealth--in trying to get building projects passed.  The fact that both districts have a considerable amount of agricultural property also complicates matters.  While Senator Dahle's bill does not raise the equalizing factors, indexing the equalizing factors to reflect a percentage of the state average ANTC would prevent the erosion of the tax relief delivered through the program due to the static equalizing factor.  For those of you not following, because the equalizing factor is currently a constant, whenever a local school district's property wealth grows, it's levy percentage goes up and its aid percentage goes down.  Senator Dahle's bill would prevent the automatic erosion of the program's value to local school districts and would help districts give local taxpayers somewhat of a guarantee--but not a full guarantee--that the state will continue to pick up a certain portion of the district's debt service bill.  There is a bug in Senator Dahle's bill.  Because he is setting the equalizing factor as a percentage of the projected statewide average, some districts may actually see a bit of a decrease in aid as the bill is currently written.  Hopefully, the percentage will be raised enough to prevent any loss in aid as the bill moves forward.  Ideally, the Legislature and Governor would come up with enough revenue to enact the recommendations of the School Facilities Finance Working Group (10% threshold and 125% of the state average ANTC equalizing factor in Senator Dahle's SF 490 heard last session) or Senator Kent's SF 2712 (10% threshold and 100% of the state average ANTC equalizing factor).

Tom Melcher also provided some brief testimony on the debt service equalization program this morning and his presence is always compelling.  There is no question that the debt service program has to be upgraded and Tom's graphics always show that.  When initiated, the program picked up about 11% of the state's total debt service load.  Now, it hovers in the 3% range.  All in all, it was a valuable hearing and one in which I was able to stress how this would be the perfect year to deal with the union of the property tax and education funding systems in my testimony.  We'll just have to see how things turn out.

The bulk of the time in the Senate Education Finance was devoted to Senator Sieben's SF 3095, a bill that would implement a scaled-back version of the pre-kindergarten proposal proposed by Governor Dayton last year.  The usual proponents and opponents to school-based programs all testified and it will be interesting to see how the issue unfolds over the remainder of the 2016 legislative session.  My hunch at this point is that the price tag will be too high for some members of the Senate and that there is still strong opposition in the majority caucus in the House.  In a year when nothing has to happen, this is probably too big a chunk to bite off.

Here is a link to the amended version of SF 3095:

SF 3095

I also got to testify in the House in support of Representative Roz Peterson's HF 3387.  Representative Peterson's bill adds a couple of allowable uses to compensatory revenue and gives the school board the authority to direct compensatory revenue district-wide instead of requiring it to remain in the building in which it is generated.  Under current law, districts can transfer up to 50% of the revenue attributable to a building to other sites district-wide, but a strong argument can be made that school boards should be able to have even greater discretion over where the compensatory revenue is expended.  This is especially true for a number of SEE districts that do not generate much in the way of compensatory revenue.  Instead of having a couple of very small piles of revenue, districts should be able to combine this money in a way that targets the lowest achieving environments in the district.  It is difficult to know how this issue will be received as the session winds on.  Testimony from the Minnesota Department of Education stated the Commissioner's objection to taking compensatory revenue out of the buildings in which it is earned, likely making it a tough sell.  At any rate, I want to thank Representative Peterson for introducing the bill and giving this important issue an airing at the committee level.

SF 3387

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