Special Education Ruling Handed Down. Judge Kathleen Gearin ruled today that special education funds will flow in addition to general education revenue. Last Friday, the Minnesota School Boards Association and the intermediate school districts appeared before Special Master the Honorable Kathleen Blatz, petitioning her to allow special education revenue to continue to be paid out to school districts. During the 2005 shutdown, these funds did not flow, although it made no difference to school districts due to the abbreviated nature of that shutdown.

I am not an attorney, but I was not surprised by this ruling as it appears to be in line with the framework outlined by Judge Gearin when she described how she would define a service as "essential." It was difficult to discern from news reports whether both school districts and intermediate districts would receive their special education revenue, but Judge Gearin's ruling is clear that all special education revenue--both state and federal--will flow to both district and intermediate district providers.

Link to Gearin ruling (Point #1 on Page 2): http://www.mncourts.gov/Documents/2/Public/Civil/Order_Regarding_Petitions_of_Minnesota_Department_of_Human_Services_licensing,ARC_MN,MN_School_BOard_and_INter.pdf

"Third Way" Commission Releases its Report. The group of former elected officials, business community members, and state finance experts that convened to assemble a package of budget cuts and revenue enhancements in an effort to break that deadlock at the State Capitol announced its recommendations today. Among the recommendations are:

• A temporary income tax surcharge on all Minnesota tax filers.
• An increase in tobacco and alcohol taxes.
• $3.6 billion in unspecified budget cuts.
• No increase in education payments or other accounting measures.

As expected, reception for the plan was cool and not just from the "no new tax" types. Governor Dayton objected to the income tax surcharge being levied against all Minnesotans, as his proposal calls for a tax increase on only the wealthiest Minnesota residents.

Here are a bevy of stories on the plan and its reception.

StarTribune: http://www.startribune.com/politics/blogs/125168168.html

MinnPost: http://www.minnpost.com/stories/2011/07/07/29826/all-star_budget_groups_plan_suggests_a_4_surtax_on_all_and_tax_increases_on_alcohol_and_cigarettes

MPR: http://minnesota.publicradio.org/collections/special/columns/polinaut/archive/2011/07/mondalecarlson.shtml

They're Fighting in Washington Too? Say it ain't so! Besides the debt ceiling debate, Congressman John Kline, Chairman of the House Education and the Workforce Committee, has been sparring with Secretary of Education Arne Duncan regarding the administration's authority to waive state requirements to No Child Left Behind. The debate began on late last month, when Kline sent a letter to Duncan asking him to explain the department's proposal to grant conditional waivers to a number of states and school districts. While acknowledging the need for greater flexibility for school districts, Kline questioned both the legality of the waivers and the wisdom of providing relief through waivers issued by the department, as providing flexibility in this way would cloud transparency and may cause confusion between school districts.

In his response, Secretary Duncan contended that he has the legal authority to grant waives and that he plans to proceed.

This is another example of how the nature of the debate in this country is not just about differing visions of tax and budget policy, but also regarding the powers of Executive and Legislative branches in both states and at the federal level. It should be interesting to see how this particular issue plays out, as the budget discussions at the federal level have impeded a number of committees' ability to tackle policy issues. All indications have been that Congressman Kline has every desire to be a very active chair of his committee and incorporate a number of changes into the re-authorization of the Elementary and Secondary Education Act.

Here are two sources on the exchange:

House Education and Workforce Committee: http://edworkforce.house.gov/News/DocumentSingle.aspx?DocumentID=248594

Huffington Post Article on Duncan Response: http://www.huffingtonpost.com/2011/07/05/no-child-left-behind-proposal-questioned_n_890795.html