In the wake of Wednesday morning’s Minnesota Supreme Court ruling that Gov. Tim Pawlenty acted illegally when he unilaterally axed $2.7 billion from the state budget, it was striking to see how many House DFLers were expressing confidence — privately as well as publicly — that a budget fix could be reached by the end of session on May 17.
One reason: The K-12 omnibus bill that’s expected to reach the House floor late this week already contains a provision ratifying Pawlenty’s “mimic” of a K-12 education payment shift. That would solve $1.2 billion of the problem for bookkeeping purposes. (The $600 million in property tax recognition shifts in the Pawlenty shift was not really an unallotment, but rather an administrative rule change by the Department of Education; it doesn’t need legislative action.)
House K-12 finance chair Mindy Greiling tells PIM that even though the prospects for starting to repay the shift anytime soon are dim, passing the shift into law is still a boon for Minnesota schools, because creating a mechanism for eventual repayment puts districts in a “better credit position.”
“Since the governor delayed payments last year,” says Greiling, “it has created short-term borrowing costs of $25 million for Minnesota schools.” A legislatively codified shift should enable districts forced into borrowing to obtain better credit terms.