Rumblings on Formalizing the Shift. There's been a lot of whispering going around the last few days that the Governor is proposing to formalize the state aid payment shift and early property tax recognition shift that he implemented as part of his $2.7 billion in budget corrections after his administration and the Legislature could not come to an agreement at the end of the 2009 Legislative Session. The recent rumblings are undoubtedly a reaction to the temporary restraining order issued by Ramsey County District Court Judge Kathleen Gearin last week. As I reported yesterday, Judge Gearin's order has certainly thrown an element of uncertainty into the budget-balancing efforts of the last year and will cast a shadow over the additional efforts needed to balance

The Governor will be meeting with legislative leadership later this week. While I doubt a final agreement on formalization of the payment and property tax recognition shifts will be reached this far in advance of the Legislative Session, here's hoping that some progress is made toward an agreement.

Increasing payment shifts are never an optimum policy. Basically, the state is using school districts as a credit card when it employs these policies. However, formalizing the shift would provide school districts throughout the state with a better idea of what their cash flow will look like in the coming year and will avoid falling off a funding "cliff" in the event the shift would revert to 90%/10% automatically and leave all state funding other than the general education program in a murky state of "funded. . . .or not?"

Even if the payment and property tax recognition shifts are formalized, education funding is likely to go under the microscope for possible cutting to help solve the $1.2 billion budget gap facing the state for the remainder of the biennium. I will keep you posted.