Tuesday, May 23, 2017

This Is It.  The Legislature will be convening at 3 PM in a special session to take up a set of budget bills that were left hanging as the midnight deadline for adjournment of the regular session.  Included in the bills will be the tax bill, the transportation bill, the health and human services bill, the bonding bill the state departments bill, and--of course--the E-12 funding bill.  Agreement was reached on all of these measures late last night and rather than have a rapid fire free-for-all, legislative leadership decided to take a more measured approach and pass the bills in a special session today when members are more rested.  Obviously, there will still be a lot of fireworks and making the self-imposed deadline of 7 AM on Wednesday morning will be a challenge.

It is reported that the E-12 budget target is $477 million--$10 million more than what the Legislature had called for in its revised targets released last week--and folks are wondering how the money will be divided.  Clearly, the formula was a high priority in both the House and Senate bills with targets around $300 million, so it's probably a safe guess--but a guess nonetheless--that more money will go toward the formula.  A 2% increase in each year costs approximately $380 million, so that would leave $90 million to move around into other priorities unless, of course, the Legislature wants to take the formula increase above 2%.  

One complicating factor is how the TRA issue will be handled.  Rumors are flying around on this.  There is talk of increasing the formula amount beyond 2% to help accommodate the costs related to an increased employer contribution, but when revenue goes on the formula, it can go for anything.  The preferred method of dealing with the issue would be--as proposed by the Governor--to set aside revenue and distribute through the pension subtraction.  This is the cleanest way to approach the problem, but there are distributional differences between using the pension subtraction and putting the revenue on the formula and my guess is the data runs outlining those differences have been studied.  

The other item that will be interesting to see is how the early childhood issue will be handled.  The Governor continued to push his voluntary pre-kindergarten program throughout the negotiations and rumor has it that there will be $50 million distributed for early education in some form.  Hard to say what that is, but some are saying it's a more targeted form of school readiness.  There are so many rumors flying around that they are flying in formation.

It will also be interesting to see what is in the tax bill.  What I have gathered is that the Ag Bond Credit is in the bill, but that the increase in the debt service equalization did not survive the negotiations.  If debt service equalization is not part of the final bill I--and a lot of SEE members--will be disappointed, but we'll be back and hammering (and yammering) again if that is the case.  I have also heard that all of the private school tax credit/tax deduction/scholarship fell by the wayside and if that is the case, like our debt service and referendum equalization initiatives, proponents of those items will be back in force in 2018.

Here is the MinnPost article regarding the budget agreement and today's legislative process:  Dayton signs deal calling Legislature into special session. What happens now?

And so, as I finish this missive, let's sign off with the Kenny Loggins' song that inspired this headline.  I've taken the YouTube version from Loggins' episode on Live from Daryl's House.  For those of you music aficionados, Live from Daryl's House is an absolute hoot, as he brings in artists and works up new versions of their hits.  With no further ado, here's Kenny and Daryl:

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