Senate Passes E-12 Bill Easily.  The Senate passed the E-12 conference committee report on a vote of 52-14.  20 Republicans joined 32 DFLers in supporting the bill.  The 14 "no" votes were split evenly between Republicans and DFLers with 7 of each caucus voting to not support the conference committee report.

So, where do we go from here?  The Governor has reiterated his intent to veto the bill several times, so it is my guess that is what will happen.  The questions are when would the special session be called and where will it be held?  It's moving day around the Capitol today as staff whose bills have passed are cleaning out their Capitol offices in order to move to different accommodations for the next year.

The Governor intends to hit the road tomorrow and make a case for his stance on the overall education budget and the importance of his early childhood initiative.  It will be interesting to see how that turns out and whether it affects his popularity.  There will likely be so much spinning in the next few days that those that follow the process will get dizzy from the charges and counter-charges that will be flying about.

So stay tuned.  At the very least, it's important that we thank legislators for their hard work this session.  I would have liked to seen another $100 million added to the target, but in a year when negotiations and initial legislative targets were not promising, coming out at $400 million should be welcomed.  I'm also pleased that we got one of the two biggest equity "holes" filled with the passage of the facilities issue.  I was kidding MREA lobbyist Sam Walseth the other day that when issues where we are in league, we should merge the organizations with the new acronym MRSEE (Minnesota Rural Schools for Equity in Education), pronounced "mercy" of which we would show none.  I can remember back to 1991 when I was first lobbying and held a joint contract between MREA and SEE where both organizations worked to establish referendum and debt service equalization.  When we work together, there are equity gains and I want to thank MREA Executive Director Fred Nolan, MREA Legislative Director Sam Walseth, and MREA lobbyist Joe Gould for all of the work we shared.  Both MREA and SEE were doggedly determined to move the ball forward on the facilities issue and we got it done.

One of the big disappointments was not seeing the Alternative Compensation cap eliminated.  The $9.5 million appropriated for Alternative Compensation will take care of those districts that currently have approved plans, but no one else.  With the teacher evaluation mandate, districts need revenue to perform the duties associated with that effort.  Districts with Alternative Compensation plans in place have resources at their disposal that districts not participating in Alternative Compensation do not.  This simply has to change.

So hang tight for the next 24 hours.  We'll know more in a day or two about what is going to happen and when it is going to happen.  Until then, it's important to read the conference committee report and the linked data because if the bill is re-opened during a special session, I don't foresee a lot of changes.

Link to bill:  HF 844 Conference Committee Report

Appropriations Tracker:  Biennial Appropriations by Program

District-by-District Run:  FY 2016 (2015-2016 School Year)

District-by-District Run:  FY 2017 (2016-2017 Fiscal Year)

The End is Nigh . . . I Think.  The House passed the omnibus education bill on a party-line vote of 71-59 at approximately 3:15 AM Sunday night/Monday morning.  The debate and vote took up about an hour's time.  Criticism from the DFL minority was centered on the early childhood issue and the absence of the Governor's universal pre-kindergarten initiative.  The Governor is standing by his veto threat and the Senate will be taking up the bill this morning.  There are (paraphrasing the Biblical passage) "maneuvers and rumors of maneuvers" to get things done on time with the Governor's pre-kindergarten package included somewhere in the mix to avoid a special session.  The Senate could always vote to reject the conference committee report and force a re-opening of the conference committee where the Governor's initiative (and more money to pay for it) could be inserted into the E-12 bill.  Lots to think about.

The Latest.  Events are moving slowly this afternoon, but there is plenty of intrigue.  The House passed the omnibus higher education bill a bit ago and is now working on the public safety omnibus bill.  The Senate just finished work on the "body cam" bill and will be taking up the omnibus higher education bill shortly.

Rumors about the E-12 bill continue to abound.  Governor Dayton had another press conference a couple of hours ago at which he repeated his pledge to veto the bill if it does not contain $150 million more.  It is assumed he wants all of that increase dedicated to his universal pre-kindergarten program.  Governor Dayton said Senator Bakk has agreed to put the requested revenue into the bill if the conference committee is re-opened, but it appears that the House is reluctant to do that and would rather send the bill to the Governor to see if his veto pledge is indeed valid.  There are bills in both bodies that could be used as last minute vehicles onto which a new agreement could be attached and sent to the other body, but given the differing visions of the majorities, that process is probably too messy to be practical.

So stay tuned.

New Information:  The E-12 conference committee report is at the revisor, meaning the conference committee will not be re-opened.

Sunday Morning Coming Down.  There are a lot of song titles that could be used to describe what went on yesterday and will be going on today and tomorrow.  I'm just hoping the song title "Most of Us are Sad" (a deep cut from the Eagles' first album) isn't going to be one of them.

As I reported yesterday, the Legislature has put together its bill--a $400 million package that is heavily tilted toward the basic formula--and it is expected that the Governor will veto the bill per his comments yesterday.  The Governor wants a $550 million education package that contains at least $173 million dedicated toward universal pre-kindergarten.  The math doesn't really add up, but the math is the smallest problem in the process right now.  There is a huge rift between the Legislature and the Governor, which to some extent is understandable in the sense that the House of Representatives is controlled by a different party than the Governor's, but the disconnect between the Senate and the Governor is hard to fathom at this point.

The formula "broom" really swept a lot of provisions from both the House and Senate bills to the side.  The Senate bill had a greater number of small--but important--provisions than did the House and almost all of them were went into the shredder.

The highlight for SEE (outside of the formula increase of 1.5%/2.0%) is the inclusion of the Senate's facilities provision that will expand over the next three years districts' ability to fund deferred maintenance.  SEE also was very supportive of eliminating the cap on the Alternative Compensation program, but the bill does not go that far.  Instead, the agreement adds $9.5 million to the program, which will accommodate a number of districts that are poised for having their Alternative Compensation program approved by the Minnesota Department of Education.  That will still leave a lot of districts on the outside looking in when it comes to funding the teacher development and evaluation mandate.

I just watched an interview with Lieutenant Governor Tina Smith as I am writing this entry and she reiterated that it is the Governor's intention to veto the bill that has been agreed to by the Legislature.  That means the next 37 hours are going to be hectic.

I will provide more details on the content of the bill and the machinations of the process throughout the day, so stay tuned.

We Have a Bill. I don't know who would be reading this at 1:45 AM on Sunday, May 17, 2015, but it appears that the conference committee has come to an agreement on a $400 million package.

The highlights of the package appear to be:

• 1.5% on the formula for 2015-2016/2.0% on the formula for 2016-2017
• Senate Facilities Package (Task Force Recommendation #1)
• $9.5 million increase in QComp appropriation (Cap remains)
• $30 million increase in School Readiness Program
• $30 million increase in Early Childhood Scholarship Program
• $4 million for Concurrent Enrollment
• $2.5 million for Extended Time

Those are the major details of the agreement.  There is more there and I will pass those details along as they are revealed.

Watching Paint. 

 I would say this afternoon has been like watching paint dry, but drying connotes some level of action and there is no action (or at least action that we are allowed to see) for the E-12 conference committee right now.  A battle may be brewing between the Legislature and the Governor.  The Governor believes the $400 million target is simply to low to meet the needs of Minnesota students (and by extension school districts) and a target at that level would come nowhere near accommodating what the Governor would like to see happen in terms of pre-kindergarten education.

So here we sit.  The fireworks probably won't start until the sun goes down (which is only appropriate), but they will likely be continuing after the sun comes up tomorrow morning.

Good Way to Spend a Saturday.  Hey!  It was supposed to rain today, but here I am at the Capitol and my lawn escapes its weekly trimming.  But anyway, the Legislature set its target for the E-12 bill last night at $400 million, which is still pretty low in comparison with the Governor's wishes.  The Governor just concluded his press conference a few minutes with a pretty firm request--I think it will probably be framed as a demand--for a target of $550 million, which would include a 1.5% increase in the basic formula in each year of the biennium and $173 million for half-day pre-kindergarten programs.  Could be a collision coming (understatement alert).

Meanwhile, the E-12 conference committee reconvened last night after legislative leadership set the budget committee targets and adopted a plethora of provisions deemed to be either the same or sufficiently similar to adopt without debate.  The conference committee came in again this morning and tackled a few other provisions that weren't in both bills that were likewise deemed uncontroversial and adopted.

Things will be getting serious pretty quickly as the conference committee starts to cut up the $400 million pie into various slices.  At $400 million, the slices aren't likely to be too big and as always the case, someone will leave the process unhappy.

I'll be providing updates throughout the day and sending out alerts by Twitter.  So stay tuned.  We're about 59 hours away from the constitutionally-mandated adjournment of the regular session and there's a lot of ground to cover.  Legislative leadership has already decided to forego assembling omnibus tax and transportation bills and there are rumblings (probably not serious ones) that they could skip the education bill as well.  Who is up for a little drama?

Glacial Pace Continues.  All sides are still hanging out at the Governor's abode trying to strike a budget deal.  Doug Grow put a nice piece together for MinnPost which outlines what the final budget deal may look like and his logic is solid (although I think the chances of the basic formula hitting the 2% per year favored by the Governor and Senate has a better chance than he postulates).  I think the other thing that might happen is that an education bill may simply materialize without any further conference committee proceedings, similar to what happened in 2011 during the shutdown.  I think all sides know the priorities of each of the major players and sitting around in conference committees haggling over language doesn't accomplish much other than the appearance of transparency.  Here's hoping for a solid target with a strong commitment to the basic formula (and facilities and QComp) with everything wrapped up prior to next Monday.

Anyway, here's link to Doug Grow's MinnPost article:  What a Budget Deal Might Look Like

Still No Progress.  An APB has been put out for the elusive targets that the Legislature and the Governor cannot seem to locate.  Legislative leadership and the Governor are all holed up at the Governor's mansion with negotiations going great guns to try to find common ground (and then agreement) on the targets for the tax bill and the budget bills.  Republicans are charging the DFLers with trying to run down the clock to force the Republicans to make a deal that would be lighter on tax cuts than what they would prefer, which could possibly be the case or things may just be going slowly.  I have thought all along this session that the budget bills may be light on policy and if the target-setting process goes on much longer, a lot of policy initiatives will likely fall by the wayside as there won't be enough time to negotiate agreements.  It could be a year when it's pretty much all about money.  I will let you know how things shake out once they start shaking.

In Search of Targets.  There were no education conference committee proceedings today.  Senator Wiger had the gavel today and could have called a meeting, but it was decided that in the absence of a budget target, a meeting would not have accomplished much.  The primary differences in the House and Senate bills have been discussed as well as the difference in overall investment between the House, Senate, and the Governor so there isn't much need for further explanation.  The priorities of each body and the administration have been well defined so there shouldn't be a lot of difficulty in putting together a bill rather quickly once the overall budget target is set.  The complication in setting targets may have more to do with wrangling over the tax bill and the health and human services bill as opposed to the education bill and seeing you can only spend a dollar once and a dollar spent on tax cuts is equal to a dollar spent on education in terms of setting the overall budget and even with a budget forecast surplus of nearly $2 billion.

One factor that may play a large role in determining the final budget and tax targets is the number of states with significant budget gaps cropping up.  A number of the states that are experiencing budget shortfalls did not (or have not yet) raised state taxes or fees, which Minnesota did in a big way in 2013, so it is difficult to tell whether the states with budget gaps are having cyclical problems based on revenue fluctuations  resulting from changes in economic performance or structural problems where expenditures (often based on entitlements and on-going formulas) are simply out-stripping resources beyond economic projections.  Here is an Associated Press article from the Sunday Minneapolis StarTribune describing the problem:  States' Budget Gaps Sound Fiscal Alarms

Portent of Things to Come.  A state that has been having budget problems is Kansas and one of the ways that Governor Sam Brownback and the Legislature are trying to solve the problem is changing the way that schools are funded in the state.  Kansas recently passed a block grant system first proposed by Governor Brownback in March.  While I don't know how the magnitude of each district's block grant is calculated, the logic of the approach from the proponent's side is that it gets rid of categorical funding and gives total flexibility to school districts in meeting their own individual needs.  The problem is that this reminds me a bit of the approach taken by the Reagan Administration back in the early-1980s when they collapsed a bunch of Federal programs into block grants and then shipped them to the states where the money could be used more flexibly than under Federal law.  That did two things:  (1) it did give states flexibility, but state goals are often for better or worse different (sometimes radically) than the vision that went into the development of the programs that composed the block grants, and (2) the block grant amount usually--but not in every state--was smaller than the sum of the individual program appropriations.  The old "you need less money if you have complete flexibility" argument has been around for decades and it usually means school districts (or whatever recipient of the grant) ends up not having enough money to get what they need done.

Here are some articles on the Kansas situation, including a blog entry from Dr. Bruce Baker's Education Finance 101.  For those of you not familiar with Dr. Baker, his blog is a pretty good repository on education finance and education policy.

March story from the Wichita Eagle announcing block grant proposal:  Republicans Unveil Block Grant Plan

Late March story on plan approval:  Brownback Signs School Block Grant Funding Bill

Recent story on school district reactions:  Many Kansas Schools Bemoan Block Grants

The plight of the Silver Lake school district:  Kansas School District Running Out of Options to Meet Cuts under Block Grant Formula

The possibility of litigation:  School Funding Lawsuit Seeks to Find Out Constitutionality of Block Grants

Dr. Bruce Baker's perspective:  Education Finance 101

It is important to remember that Kansas had a monumental school finance lawsuit--Montoy v. State--that found Kansas' education funding system to be unconstitutional.  The Legislature brought the funding system up to a level that was considered constitutional, but then, of course, the recession came trotting along and all the best laid plans fell apart.  So it's been an interesting couple of decades in Kansas as it relates to school funding and we have now embarked on a new chapter.  One of my worries is that if the block grants are found to be constitutional, it will be an approach that will be suggested in a number of states, especially those in which there are budget issues.

Conference Committee Day 3.  It's a short report today.  The conference committee began today's hearing at about 2:30 PM and met for around two hours, covering two subjects.  The first subject was extended time revenue.  Both bills change the label extended time revenue to extended time support revenue in both bills, with the House adding just under $2.5 million to the program.  Both bills also allow area learning centers, alternative programs, and contract alternative programs to utilize extended time support revenue for academic purposes during the school day.

The discussion then turned to the Early Childhood Scholarship Program and a number of interests spoke in favor of that program.  The House bill increases the Early Childhood Scholarship Program by $30 million and the Senate increases the program by $5 million.  The Senate's early childhood education program centers around a significant increase in the Learning Readiness Program instead of a significant expansion in the scholarship program.  Neither bill embraces the Governor's universal pre-kindergarten program either in scope or magnitude.  This issue area is the one area that will require considerable negotiating to put the bill to bed next week.  It's kind of like a game of Rock-Paper-Scissors in that the House has made a strong statement against the Governor's plan and has instead stressed the Early Childhood Scholarship Program.  The Governor has gone in the opposite direction and the Senate appears to be finding Baby Bear's "just right" position on the issue by putting some money in scholarships and investing heavily (and implementing a number of new requirements) in the Learning Readiness Program and putting a bit more into Early Childhood Scholarships.

The conference committee will not be meeting again until next Monday.  There is a rumor going around the the E-12 budget targets will be delivered on Monday, but I find that a bit difficult to believe unless the tax target is announced at the same time.  I don't think anything happens in any budget area until the tax target is determined.  If that all breaks on Monday, it is likely that the budget bills could be put together in a week and a special session avoided.  Needless to say, it is going to be ten days of pandemonium.  I will keep you posted.

Conference Committee Day 2.  The E-12 conference committee held its second hearing today featuring public testimony on three items, two of which were Senate initiatives.  After finishing review of the side-by-side comparison and the budget sheets that outline the differences between the two bills, attention turned to the facilities issue.  As I've reported before, the Senate bill contains a provision from the School Facilities Finance Task Force that would provide school districts throughout the state with expanded access to deferred maintenance revenue.  Currently, 25 school districts qualify for the Alternative Facilities program that allows them to either bond or levy on an on-going basis for facility repairs.  This is a huge advantage for those districts and the Senate bill seeks to redress this inequity by providing the districts currently not eligible for the Alternative Facilities program with increased equalized levy authority and phasing in increases in that authority over the next three years.  I was happy to testify in favor of this provision and I was very happy to be joined at the witness table by Forest Lake superintendent Linda Madsen and Forest Lake business manager Larry Martini.  Forest Lake is on the cusp of qualifying for the Alternative Facilities program, but has been continually turned away in their efforts to be allowed to join the program.  Passing the Senate bill would put Forest Lake and districts in similar situations with a necessary tool to plug a hole in their general fund that is currently dedicated to funding deferred maintenance projects.  What is often forgotten in this whole discussion is that districts don't go out looking to spend money on needless things.  Districts have on-going deferred maintenance needs and to fund those needs, they have to dip into their general funds--often to a considerable degree--to complete needed repairs.  If they haven't got room in their general funds to take on these projects, the projects get delayed and school physical plant--and often times students--suffer as a result.  Other groups testifying included MREA and MSBA.

The discussion then turned to the Senate's provision to eliminate the cap on the Alternative Compensation (QComp) program and allow those districts (over half the districts that contain slightly less than half the state's students) not participating in the program the opportunity to do so after having their plan approved by the Commissioner of Education.  Over the years, the pool of available revenue for districts seeking to employ the program has grown slowly and often erratically.  This has left a number of districts that are ready to put an Alternative Compensation plan in place waiting for enough money to be put into the program so that they can implement the plan.  The revenue gap between districts participating in QComp and those that don't is up to $260 per pupil unit.  With all districts now mandated to perform the duties related to the Teacher Development and Evaluation program, districts that are participating in QComp have a distinct advantage (and revenue stream) in addressing the costs related to that program.  While it's not a perfect fit in many districts, districts without any on-going revenue for teacher development and evaluation--like districts that don't have access to revenue in the Alternative Facilities program--have to dip into their general funds to pay for the cost of teacher evaluation.  A delegation from Stillwater school district testified about the importance of the Senate provision to their school district.  Stillwater has developed a QComp plan that has been approved, but unless their is additional revenue put into the program, they will not be able to participate.

Revenue for facilities and teacher evaluation are currently the two sore thumbs in the education funding system and the Senate chose to close these funding gaps with their bill.  It is disappointing that the Senate did not put more revenue into the general education basic formula, but with a target only slightly more than half of that of the Governor, the money didn't go very far.  Hopefully, the target for the E-12 budget will improve once a global agreement is reached on the overall funding framework and a bill that balances money for all school districts while addressing some obvious inequities can be constructed.

The last issue that was dealt with today was the testing issue.  Both bills address the testing issue and try to eliminate the testing burden on school districts and students.  The problem is that the Federal Government whistles the tune on this issue, which constricts how much Minnesota can do as it moves to make the testing program less cumbersome and more useful to school districts.  Commissioner Cassellius testified on the confines of the issue as it relates to their work and also shed light on the technical problems that shut down testing for several days last week.

The conference committee will be meeting again tomorrow and will take testimony on the early childhood scholarship program.

Conference Committee Begins Meeting.  The education funding and policy conference committee began its proceedings this afternoon.  There isn't a whole lot to report.  The bulk of the committee time was devoted to going through the side-by-side comparison of the bills.  They didn't get all the way through that task, leaving a bit of staff description of the various provisions in each bill for tomorrow.  Senator Wiger has the gavel tomorrow and announced that he is planning to convene the meeting at approximately 2:00 PM, floor session willing.  Senator Wiger wants to take testimony on several Senate initiatives that are not in the House bill, particularly school facilities funding and the elimination of the cap on the QComp appropriation (which would allow the remaining districts in the state who are not participating in the alternative compensation program the opportunity to do so).

We are 13 days away from the constitutional adjournment date for the regular session and a lot is going to have to get done in a hurry if a special session is going to be avoided.  That's not to say it can't be done.  Once the targets are set, things could fall together rather quickly.  There isn't a ton of policy in the education bills, so money questions will dominate the discussion in that conference committee to an even heavier degree than they usually do.  We'll have to see and I'll fill you in as it happens.

Tremendous Press Conference.  A press conference featuring parents, teachers, school board members, and school administrators was held yesterday and it was a rousing success.  The room was packed and the press coverage was solid (and positive).  The message delivered at the press conference is that the budget targets for education in the House and Senate are far too low to truly meet the needs of school districts throughout the state.  The presenters composed a broad range of education concerns (students, parents, school board members, teachers, and school administrators) all did an excellent job describing how at the proposed legislative budget targets, significant cuts will have to be made to programs throughout the state.  While the Governor's target is double that of the highest legislative target ($694 million to the Senate's $350 million), he dedicates half of his budget to a new program--universal pre-kindergarten programming--which won't protect current programs to a great extent.  Here's hoping the press conference has the desired effect and legislative leadership comes forward with a budget target that more closely mirrors what is needed for school districts throughout the state to meet their needs.

A lot of people helped plan the event and execute those plans flawlessly, but I think a big shout out should go to Chris Williams, the press secretary for Education Minnesota.  Chris is a former reporter with the Associated Press and his expertise was vital to the event's success.  It goes without saying that our friends at Parents United for Public Schools--most notably Mary Cecconi and Ann Hobbie--also did a fantastic job of mobilizing parents, which filled the room with concerned citizens, many holding signs with messages of clear concern.  To make this session a success for public education, more revenue is going to be needed in the budget targets and yesterday's press conference provided a clear message to legislator outlining that concern.

Conference Committee Begins Today.  The education funding and policy conference committee begins its work this afternoon.  With final budget targets yet to be determined, the initial meetings of the conference committee will likely be dedicated to the adoption of language items that are the same or similar in each bill and discussing provisions that are in one body's bill and not the other's.  In other words, slow going until the larger money decisions are made by leadership.  I will keep you up-to-date on the proceedings.

Here are the conferees:

Senate

Senator Chuck Wiger (Chair):  Bio

Senator LeRoy Stumpf:  Bio

Senator Kevin Dahle:  Bio

Senator Alice Johnson:  Bio

Senator Eric Pratt:  Bio

House

Representative Jenifer Loon (Chair):  Bio

Representative Sondra Erickson:  Bio

Representative Ron Kresha:  Bio

Representative Bob Dettmer:  Bio

Representative Roz Peterson:  Bio