June 15, 2009

/ 15 June 2009 / Parents United
June 15, 2009

Update for June 15, 2009 — From Mary Cecconi, Executive Director </p>

? Further Analysis of the 2009 Legislative Session ?

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What Happened at the Capitol during Session 2009 and how will it affect my school come September?

There are a fair number of provisions in this year’s Omnibus bill that will affect our schools in the next two years, so instead of simply listing them we decided to use updates throughout the summer months to share more information and analysis about their impact on our schools.

FYI: An official bill summary is available, but if you have questions about specific provisions that you have been tracking, please email me.

Article 1 – HF 2, Funding:
It is interesting that many who push for big reform in our schools are the first to say that money isn’t the answer. While funding alone may not bring about the increased student achievement we need for all of our kids to succeed, let’s be truthful, reform without funding is simply a smoke screen. So we begin where the bill begins, with funding. (Our next update will focus on Article 2, Education Excellence.)

One of the most disappointing aspects of this session was the fact that the Senate did not even introduce a companion bill to HF2, commonly called the New Minnesota Miracle. While the House championed the effort and even had the provision in its final omnibus offers, the Senate simply did not respond. Some said it was because there was no way to fund it. But the provision began the funding in 2014 and a safety net was provided if money were not to be available at that time. We expected at least a debate on how each body believed schools should be funded and to what extent. We will be looking forward to that debate next session.
 
The Governor signed HF 2 on May 16, and flat funding was provided for our schools. If you listen to the rhetoric, this flat funding will “hold schools harmless.” Let’s take a closer look at that contention. First, in order for the Governor to balance the state budget and provide the spending appropriation for the signed E-12 omnibus bill he will need to use accounting shifts AND, more than likely, $500 per pupil unit of federal stimulus money.

What should I know about funding schools with shifts?
Let’s remember why the state is using shifts to fund our schools: they do it to balance their budget for the current year. It is like paying the minimum on your credit card balance and, when declaring your liabilities, forgetting until the next year what your total balance due is. A percentage of the “bill” for school funding payment simply doesn’t show up until the next year’s budget.

A second issue to be aware of when the state uses shifts to fund our schools is that when the shift is “bought back” (and the last shift took five years to buy back) it is seen by legislators and the general population as “new money” instead of payment of an owed bill. All of a sudden schools have ALL OF THIS MONEY to spend! The last buy back was about $1 billion. Just try to pass a local levy when your community has heard that schools just received a billion dollars!

What shifts are:
Current law has 90% of the state’s payment to schools disbursed in the current year with 10% held back until the following year. This is called a 90/10 payment shift. What is rumored now is an 80/20 shift or a 73/67 shift. A school would receive 80% or 73% of its entitlement dollars in the current year and wait for the final payment the next year. Districts without fund balances more than likely will need to borrow to pay bills and by borrowing will incur interest charges. Flat funding especially in conjunction with deep school payment shifts DOES NOT hold schools harmless.

What should I know about using federal stimulus to fund schools?
There are two things we need to keep in mind about federal stimulus money:

  • federal stimulus money was to be used to supplement, not supplant, school budgets, AND
  • the money is only there for TWO YEARS.

If $500 per pupil unit is part of the un-alloting plan it will simply “backfill” a $500 per pupil cut with federal money that RUNS OUT IN TWO YEARS. Come Spring 2010—when school districts are trying to project for the coming years—they will need to deal with huge deficits. The federal money was never intended to fill this gap!

What does all this mean for us?
Many of us will watch our kids return to school in September and may not see program cuts, increased class sizes, or cuts to the busing schedule and we may wipe our brows and be happy that the worst has past us by. BUT HOLD ON.
 
By April 1, school boards must make staffing decisions for the next year (translation—how many teachers will they be able to afford). By law, boards must adopt their budgets by June 30. So this last year, school boards had to make funding decisions for September 2009 BEFORE they knew what the state was going to provide. Cuts made in the un-alloting process will show up in our schools in 2010 and beyond.

By the way, this disconnect between laws governing a board’s requirement to adopt their budget and when they learn what they will be receiving happens each biennium because of the legislative schedule. Parents United has often asked that the E-12 omnibus bill be finished and signed into law before April 1 each year, so that schools can make planful decisions. We have yet to have the legislature take this request seriously.

A comment on un-alloting:
First, the phrase “un-alloting” does not exist in law. The contingency exists in law where a governor is granted the authority to take what has been allotted and then remove the allotted appropriation when there is an “unanticipated” drop in revenue. The argument is that this year’s budget deficit was very well anticipated and the legislature spent the session trying to balance the budget. When the Governor signed into law the spending bills, yet vetoed the taxing bills, he was aware of the situation he was creating.

Needless to say this unprecedented move to unilaterally un-allot as a way to deal with a budget crisis is under a great deal of suspicion and holds significant implications for leadership in our state.

Does the legislative session simply become theatre? Do we simply wait until the end of session for future governors to sign spending bills they agree with, veto revenue generating bills they find distasteful and then “un-allot” what has yet to be alloted from areas of the budget they disagree with?

What Can I Do?
Stay tuned as we continue to analyze provisions of the 2009 E-12 Omnibus bill over the next several months!

Check out all the News and Hot Topics at our website!

“Childhood has no rewind: Our children cannot go back to grade school and get another education when times are better and we all have more to give. When the playground is empty and the children are gone, either we will have sacrificed for them, or we won’t.”
                                                                            —from a Parents United poster

Questions? Email Mary Cecconi
Parents United for Public Schools
1667 Snelling Avenue N., St. Paul, MN 55108
651-999-7391
www.parentsunited.org

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