Minn. Deal Would End Shutdown by Delaying School Aid

By Sean Cavanagh — July 15, 2011 2 min read
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A tenuous peace is in the air in Minnesota, as Gov. Mark Dayton and Republican lawmakers say they have reached a deal that would end the state’s two-week-long government shutdown.

The agreement would resolve the state’s budget impasse in part by delaying some state aid payments to schools. District administrators have derided that move as a gimmick that will simply put off the state’s financial obligations.

The shutdown had forced the closure of the state’s 400-person department of education, which halted its work processing thousands of teacher licenses, judging schools’ progress meeting federal academic standards, providing technical assistance to districts, and other duties.

The impasse came when Dayton, a Democrat elected last fall, and the state’s Republican-controlled legislature were unable to reach an accord on the budget for the state, which faced a projected $5 billion deficit.

Dayton had pressed for a plan that would bring in additional revenue by adding a tax on the state’s richest residents. But Republicans blocked any tax increases, instead calling for cuts in government programs and services.

How did they bridge the divide? A crucial part of the agreement is to raise $1.4 billion by a delaying state aid for schools, and borrowing $700 million against future tobacco revenues.

The accord would still have to be approved by the state legislature.

In a letter to GOP leaders, Dayton described conditions of the solution as stopgap measures, which would not provide the state with a permanent budgetary fix.

“However, despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote. “Therefore, I am willing to agree to something I do not agree with—your proposal—in order to spare our citizens and our state from further damage.”

UPDATE: Charlene Briner, a spokeswoman for the Minnesota Department of Education, says the budget deal would use a “60/40" delay in state aid payments for schools over the next two years. That could mean that some districts will be forced to dig into their savings to make up the difference.

“Essentially, it means that schools will get 60 percent of their funding this year and 40 percent will be paid next year,” she explained in an e-mail. “In order to maintain cash flow, some districts may have to utilize reserves or short-term borrowing. The budget agreement does include Governor Dayton’s proposal for an increase in the per pupil formula allowance by $50 per student, which may help offset some of those challenges.”

A version of this news article first appeared in the State EdWatch blog.