Wednesday, March 15, 2017

Things Flying All Over the Place.  With the policy deadlines pretty much in the past, the funding divisions for the various categories of state funding have been running through a lot of bills.  Most of these bills probably won't find their way into the omnibus funding bills, but a number of interesting perspectives are being presented.

Here are some of the highlights from the bills that have been heard and the committees in which they were heard.  

  • One bill getting quite a bit of attention is HF 1963/SF 1362 dealing with the use of proceeds from bond sales emanating from voter-approved bond referenda.  Under the bill, a district could not increase instructional space within five years after closing a building without a positive vote from the community.  The discussion of this bill emanates from decisions to close buildings made in the Stillwater district and the subsequent passage of a bond issue by the Stillwater voters just last month.  This has caused some consternation in neighborhoods where the buildings were closed, but there's no question a bill like this applied statewide could cause quite a few problems.  The bill has been heard in both the House and Senate and is on the list for possible inclusion in the omnibus education funding bill in each house.  Stay tuned.
  • Senate Education E-12 Funding Chair's SF 1556 was heard on Monday in the Senate E-12 Committee.  The bill calls for a 2% increase in the general education basic formula in each of the next two years.  It mirrors the Governor's budget recommendation and has a House companion in HF 1716, authored by House Education Finance Chair Jenifer Loon.  There is growing sentiment that this is where the formula increase will end up, but I'm also hearing rumblings that it may be a long road to get there.  Everyone will know more when the budget targets are set and it wouldn't be a surprise if the spending contained in those legislative targets will be well below the amount needed--$379 million--to fund a 2%/2% set of increases.  This is another one to watch unfold.
  • The House Education Finance Committee heard the bill that would abolish the Perpich Center for Arts Education (HF 1825) today.  The push to close the center springs from the report performed by the Office of the Legislative Auditor that was critical of the internal controls and operations at the center.  While the report didn't expressly call for the center to be closed (and a new board of directors has been appointed), the future of the center is being discussed.  The fate of the Crosswinds School for Arts and Sciences (a charter school) is also intertwined with discussion of the Perpich School.
  • Senator Mary Kiffmeyer has introduced SF 1332, a bill that would create a new revenue stream that would be based on a flat per pupil amount that is not linked to any of the categorical funding programs and was heard on Wednesday in the Senate E-12 Finance Committee.  A surefire way to start a verbal conflagration at the Legislature is to suggest that categoricals like compensatory and sparsity should be de-linked from the basic formula.  Rather than go that route, Senator Kiffmeyer has suggested that a new revenue stream not connected in any way to the categoricals could deliver revenue in a way that would help those districts that generate below average amounts of categorical revenue.  It will be interesting to see if this gets any traction because it is a concept that does need to be discussed.
  • Senator Roger Chamberlain's SF 1252 was heard on Monday in the Senate E-12 Finance Committee.  This bill would raise the equalizing factor on the first $300 per pupil unit of referendum levy (either board-approved or voter-approved) from $880,000 of referendum market value to $950,000 of referendum market value.  The total cost of the bill is approximately $10 million, which would be spread as property tax relief to all but a handful of districts in the state.  This approach provides relief to a broader base of school districts that Senator Dave Senjem's SF 1206, which is targeted to lower property wealth school districts in the second and third tiers of the referendum levy (and spends four times the amount of SF 1252).  There is no question that a strong case can be made for either of these approaches and hopefully that discussion will take place this session.  The equalization issue has yet to receive a lot of attention in the House, but there is still time to have a hearing on this issue.  What needs to be stressed is this is not a subject for the education committees where the tax relief contained in the equalization bills would be pitted against the basic formula and other programs.  This discussion needs to take place in the tax committee.
  • The private school scholarship bills carried by Senator Chamberlain in the Senate and Representative Ron Kresha in the House are on their way to their respective tax committees and will likely be part of the omnibus tax bills that will ultimately be passed by the Legislature (and will then likely be vetoed by the Governor).
It is going to be a busy two weeks as the funding bills are constructed.  I will try to keep up and get you the latest on some of the more high profile bills (but they are all high profile to someone) being heard.

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