The Appetizers are Served.  Think of the Legislative Session as a dinner party.  The first few months are spent over apertifs with lots of conversation and then out come the hors d'oeuvres in the form of the omnibus bills.  The omnibus policy bills were released and discussed last week and today we saw the first of the omnibus funding and tax bills in the House.  The centerpiece of the House program this year will be their tax bill, in which they propose to cut Minnesota taxes by over $1.3 billion.  In order to achieve this goal, they are spending less than the Governor above the base in most program categories and less than the base in some budget categories.

HF 890, the House Education Funding and Policy Omnibus Bill (the omnibus policy provisions of HF 1376 have been folded into the same bill as the funding provisions) was released today and there are a few surprises in the $258 million spending put forward in the bill.  The basic formula is increased by 1.5% in each year of the biennium; $70/PU for the 2017-18 school year and $71/PU for the 2018-19 school year.  Then things start to get interesting.  First off, the compensatory formula is de-linked from increases in the basic formula and a new $24 million compensatory formula not based on concentration of poverty is implemented.  That trade washes out into $2 million of savings for the bottom line as de-linking saves more than the new program spends. Further, the entire voluntary pre-kindergarten program enacted last year is repealed.  More about that later.

The biggest changes in the bill come in the area of early childhood education.  Under the bill, administration of most early childhood programs would be folded into a new office to be housed at the Minnesota Department of Administration.  In place of the Governor's voluntary pre-kindergarten program, the House bill increases school readiness by $8.5 million and the early childhood scholarship program $24.6 million.  As we witnessed during the last biennium, the House is opposed to the voluntary pre-kindergarten program.  I just thought they would leave it alone, but the only thing that surprises me is that I am sometimes still surprised.  The other surprise is that the bill closes the Perpich Center for the Arts.

Here are the highlights of the bill, some of which were mentioned in the text above:

• 1.5% increase in the basic formula in each of the next two years $(274.6 million).
• Current compensatory revenue program de-linked from increases in the basic formula (Savings of $26.6 million).
• New targeted compensatory revenue formula created ($24.0 million).
• Voluntary Pre-kindergarten program repealed (Savings of $41.0 million).
• No money to help districts correct TRA deficit (Governor had $68.6 million).
• No increase in special education formula (Governor had $45.4 million increase).
• $4 million for teacher loan forgiveness.
• $2.6 million cut in ABE funding by reducing growth factor in formula.
• New new Office of Early Education and Development.
• Increases Early Childhood Scholarship Program ($24.6 million).
• Drops age of eligibility for scholarship down to birth.
• Eliminates Pathway 2 Scholarships.
• Increases School Readiness Formula ($8.5 million) and makes charter schools eligible for school readiness.
• De-links ECFE allowance from the basic formula. 

There will be a lot of discussion on these provisions and policy changes over the next two months.

Here are the links to the bill and bill summary on HF 890.

Bill:  HF 890 Language

Summary:  HF 890 Summary

Budget Tracking Sheet:  HF 890 Budget