Sunday, March 26, 2017

Two Days of Parades.  There were parades in the House Education Finance Committee last Thursday and Friday.  Thursday's parade featured a long line of lobbyists (no floats or marching bands) providing their impressions of the House omnibus education funding bill.  Most of the positive comments came from those who support the House's move on early childhood education, which repeal the voluntary pre-kindergarten program established last session, increase funding for early childhood scholarships by $25 million, and create a new office in the Minnesota Department of Administration that would have control over almost all of the early childhood education programs currently in place in Minnesota.

Most of the negative comments about the bill were measured.  Most everyone realizes that given the committee's budget target of $258 million, it would be unlikely that there would be major increases in any program and that reaching a 2% increase in the basic formula for each of the next two years would be impossible.  As it is, the House managed to put 1.5% on the formula in each year, which puts $274 million into that element of education funding.  In order to put more money onto the formula than is actually in the House budget target, the committee cut the voluntary pre-kindergarten program, saving over $41 million in budget projections.  After increasing the early childhood scholarship program by $25 million, there was $16 million left to move toward the formula.  In other early childhood proposals, Pathway 2 scholarships, a program used by many school districts, would be eliminated and that also produced a number of concerns from witnesses.

One area of considerable concern is the House's recommendation to de-link the compensatory formula from the basic formula.  As currently implemented, the compensatory formula is automatically inflated by increases in the basic formula.  If the formula increases by 1%, the compensatory revenue base is also inflated by 1% in addition to any changes that may take place due to higher numbers (or lower numbers) of students on free- or reduced-price lunch and building concentration levels.  The House proposes to cease the automatic increase and in its place institute a new targeted compensatory program that would distribute approximately $50 per free- or reduced-price lunch pupil unit that would be reduced proportionately for districts not reaching 95% participation on the MCA tests.  In other words, a district reaching 80% of the 95% target would have their per pupil allotment reduced by 20%.  While not as stark as moves to contain the growth of compensatory revenue and to redistribute the dollars, it would still likely move revenue away from districts with the greatest challenges in terms of closing the achievement gap.  Stay tuned for the developments here.  While the Commissioner of Education and most of the district-based education lobbying organizations expressed either opposition or skepticism to the move, developments in this area will be something to watch.  It is expected the Governor would strongly oppose this change, we are a long way from when funding bills and a tax bill will hit the Governor's desk.

In my testimony (and thankfully it came near the end so there was a time limit), I hit many of the same points as others with one exception--that was also mentioned by AMSD and MREA--and that was the failure of the committee to hear Representative Joe McDonald's HF 1351, the referendum and debt service equalization bill that would have delivered needed tax relief to low property wealth school districts throughout the state.  None of the organizations that supported this bill expected the revenue needed for the program to come from the education committee's target and instead wanted it to be considered as part of the tax bill, which is already carrying considerable education tax relief in the form of the Ag Bond Credit for debt service levies and expanded education tax credits, tax deductions, and scholarship contributions for private school tuition.  But to get to the Tax Committee for possible consideration in that committee's target, it would have to be heard by the Education Finance Committee.  Without that hearing, it stalled completely and it is disappointing that in a year when the House is suggesting a $1.3 billion tax cut bill, that some money for equalization could not have been carved out for that purpose.

On Friday, it was a paper parade as sixteen amendments to the omnibus education funding bill were considered.  Most of the amendments that passed were technical in nature and nearly all of the amendments offered by DFLers failed.  The theme for the DFLers centered around the changes to the compensatory formula and the proposed shuttering of the Perpich Center for Arts Education that is contained in the bill.  Revenue for the programs proposed to be funded by the DFLers--full service community schools, after-school programs, student teaching stipends for teaching candidates in shortage areas, and school-linked mental health grants--came from the proposed increase in the early childhood scholarship program.  The exchanges in committee became contentious at several junctures and a charge was leveled by the DFLers that the bill is out-of-balance because it assumes revenue that is yet to be collected in the form of the sale of the building formerly used for the Crosswinds School for the Arts and Sciences.  The state bonded for that school several years back, but the school is slated for closure and the building will be sold.  That will generate revenue, but it is difficult to peg an amount or develop a timeline by which the revenue could be used.

It's deja vu all over again.

The result of Thursday and Friday made my recall that words of that famous educational philosopher Yogi Berra, who once said "It's like deja vu all over again."  The Governor's education target sits at just over $700 million, very close to where he was two years ago.  Further, the Governor doubled down on his voluntary pre-kindergarten program with his supplemental budget.  While the House education budget target of $258 million is slightly more than $100 million more than its target two years ago, it still is far below that of the Governor's.  The Senate target of $300 million is a bit below the $350 million target of the DFL Senate majority two years ago, it is not that much lower as to change the overall situation.  The Legislature is low and the Governor is high.  We will know more about the Senate bill when it is released tomorrow, but like the House, I don't expect it to be too much different than the House's bill.

The Governor reacted to the House bill with this very short statement:

“It looks like the House Republicans intend to use pre-kindergarten funding as a bargaining chip in the upcoming budget negotiations. It is appalling that the best interests of Minnesota four year-olds are being used as a political bargaining chip by House Republicans.”

Fasten your seatbelts, it's going to be a bumpy night.

Seeing that quote, I could only think of the words of another famous educational philosopher Bette Davis in her immortal words from the winner of the 1951 Oscar for Best Picture All About Eve.  Switch the word "session" for "night," and I think it about sums it all up.  One advantage this year is that while things will get exciting, it appears the Legislature may get its bills to the Governor in a time frame that will allow a good couple of weeks for negotiations between legislative leadership and the administration.  That may or may not matter, but I think everyone's cards will be on the table before the last weekend of the session.

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