House Unveils Omnibus K-12 Funding/Policy Bill. Well, it's not exactly a funding bill, but there are provisions--both in the short- and long-terms--that have implications on funding, so at least in a technical sense, HF 2431 is a funding bill. Even with the paucity of revenue, the House has managed to put together a 120-page bill. I don't want to sound trite, because there are a number of very important provisions in the bill that should prove helpful to school districts throughout the state during these challenging fiscal times.

Here are some of the highlights of the bill:

1. Sets the aid payment shift at 73%/27%--the same level as implemented by the Governor last July--in statute (Article 5, Section 9).
2. Sets the property tax recognition shift at 48.1% beginning for FY 2010, the same general vicinity as the level set by the Governor unilaterally after last session (Article 5, Section 8).
3. Pays back shifts and replenishes budget reserves in the same manner as current law (No change from current law, but there should be a change from current law).
4. Allows district renewing a capital projects levy at the same tax rate to put the "voting 'Yes' will raise your taxes" language on the ballot (Article 1, Section 4).
5. Raises equalizing factor for total operating capital levy from $10,700/PU to $10,915/PU for taxes payable in 2011 and to $11, 029/PU for taxes payable in 2012 and later (Article 1, Section 8).
6. Allows school boards to renew an expiring operating referendum by board approval (Article 1, Section 10). These last two provisions are tied together. By allowing boards to renew operating levies without approval of voters in the school district, the state estimates that levies will be slightly higher as a result of this action then they ordinarily would be. Because the House has a zero levy target, it was forced to buy down these levies somewhere and that was accomplished through an increase in the total operating capital equalizing factor. The amount of the adjustment is approximately $3.8 million.
7. School districts are encouraged to provide mental health instruction for students in grades 7 through 12 (Article 2, Section 5).
8. A number of provisions relating to the education and reporting on results of "at-risk and off-track" students in reaching state and locally determined learning benchmarks (Article 2, Sections 9, 10, and 28).
9. Allows Board of Teaching to develop a alternative teacher preparation program and limited-term teacher license (Article 2, Section 17).
10. Creates "efficiency plus" task forces to investigate how smaller school districts can cooperate with other school districts and local units of government to deliver services more efficiently (Article 2, Section 18).
11. Suspends requirement that revenue be reserved for staff development temporarily and allows districts to transfer any balance remaining in the fund on June 30, 2010, into the general fund permanently (Article 2, Section 25).
12. Creates fiber optic infrastructure grant program with two funds (one in the general fund and one in the bond proceeds fund) to strengthen state's commitment to fiber optic networks (Article 4, Section 3).
13. General authority for school districts to make fund transfers during the 2009-2010 and 2010-2011 school years is created (Article 5, Section 15).
14. Legislative Coordinating Commission is given authority to undertake activities that are necessary to advise the Legislature and monitor the executive branch on issues related to the Permanent School Fund (Article 6, Section 1).
15. Article 8 is devoted to the "New Minnesota Miracle" with the same language as last year's bill. Formula amounts are great! Referendum cap is too high. Equalization rates are too low.

In all, this is a really good bill seeing that there's no possible way new money could come into the system this session. A large amount of flexibility for school districts is created with the ability to transfer revenue between funds, including the ability to transfer the unexpended balance remaining in districts' staff development funds at the end of this fiscal year into their respective general funds. Further, the ability of districts to renew existing referendum levies (at the same amount only) by board resolution is a tonic for the times.

There will be a plentitude of scorn likely coming from the Governor's office regarding the bill, however. The bill does not contain much in terms of what the Governor believes to be necessary for Minnesota to seriously compete in Phase 2 of the Federal Race to the Top program. Whether or not that torpedoes the bill remains to be seen, as there are a number of provisions the Governor included in his 2010 education bill, particularly the formalization of the aid payment and property tax early recognition shits.

Stay tuned in for more discussion. The bill will be heard again on Wednesday, April 28, at 10:00 AM in Room 5 of the State Office Building. Could be a fairly long meeting with a lot of amendments and discussion, polite and otherwise.