Lawmakers agree on stripped-down bill to repay borrowed school funds

/ 29 March 2012 / jennifer

James Nord, MinnPost, March 29, 2012 –

Rep. Pat Garofalo

MinnPost photo by James Nord

Rep. Pat Garofalo passes a bill through conference committee that would begin paying back Minnesota’s $2.4 billion debt to schools.

House and Senate lawmakers on Wednesday agreed on a bill that would begin paying back the $2.4 billion leaders borrowed from Minnesota’s schools through delayed funding payments.

Rep. Pat Garofalo, chairman of the House Education Finance Committee,  announced at the roughly two-minute conference committee meeting that all policy provisions had been removed from the bill.

“All policy — LIFO, controversial or noncontroversial policy, agnostic — all policy has been removed from the bill, and this puts the bill in a form that’s going to be easy to support,” Garofalo said. “It’s a clean bill. No other policy, no other distractions. It just pays back the debt that’s owed to our schools, and it’s something I’m strongly supportive of.”

Now the measure goes back to both chambers for final passage.

What remains is roughly $430 million payback , which It more than refunds the borrowed school funds that were used as part of the deal that Gov. Mark Dayton and Republican lawmakers agreed to in order to end Minnesota’s last summer’s government shutdown.

It’s also a political winner for Republicans in an election year.

By removing all policy — especially the “last in, first out” language that would weaken teacher tenure during layoffs — it makes it tougher for Dayton to veto the measure. The governor would be forced to explain why he doesn’t support funding for Minnesota’s schoolchildren.

LIFO is also moving ahead as a separate bill, which wasn’t noted in a news release Republicans sent out shortly after the committee adjourned.

“We’re making it easy for the governor to sign the bill. No excuses, no exceptions,” Garofalo said when asked if it was politics that motivated the last-second switch. “Paying back the debt to schools is a top priority for Republicans in the Legislature, and we want to remove any barrier or obstacle” to the governor signing the bill.

The first line of the GOP press release read: “Kids first, no excuses, no exceptions.”

The executive branch worries that early repayment – which would be funded by surpluses in the state’s cash-flow and reserve accounts – could put the government at risk for short-term borrowing if the economy plummets again.

DFL lawmakers in the House offered a proposal that would have closed tax loopholes to foreign companies that operate in Minnesota and used those funds to fully pay back the shift over time, but Republicans voted it down in mid-March.

As it stands, Garofalo said, the remaining $600 million cushion should be enough to prevent any borrowing.

“Having money lay around is a lower priority than paying off debt,” he said. “Generally accepted accounting principles are that when you have cash, the first thing you do is pay off debt.”

The Dayton administration didn’t respond to multiple requests for comment.

http://www.minnpost.com/political-agenda/2012/03/lawmakers-agree-stripped-down-bill-repay-borrowed-school-funds