At first blush, “paying back schools” would seem to be an indisputably good decision. After all, wouldn’t that mean districts have more money to educate Minnesota’s children?
But at an education roundtable Thursday at Gatewood Elementary, Minnetonka Rep. Yvonne Selcer (DFL-District 48A) was prompted to defend her bill against critics who said the money would’ve been better spent in other ways.
“Paying back schools” refers to a funding shift that Minnesota legislators used to balance the budget while the state was facing shortfalls.
Minnesota has historically paid schools 90 percent of their state money in one fiscal year and the remaining 10 percent in the next. State lawmakers and former Gov. Tim Pawlenty previously changed that to a 70-30 split to balance the state’s budget—effectively borrowing from schools. During the 2011 special session, Gov. Mark Dayton and Republican legislators dropped it further to a 60-40 split.
With the shifts, many school districts struggled with their cash flow and had to borrow money until the next payment came in—diverting money to interest payments that could have otherwise been spent in classrooms.
Selcer’s bill accelerated funding shift repayments so that schools should be back to normal by the end of 2014.
But the shifts didn’t cause problems for all districts. Some districts like Hopkins—of which Selcer was a School Board member from January 2004 through December 2011—had sufficient savings to avoid borrowing between payments.
As a result, Hopkins officials argued that they’d rather see the state spend its money increasing the total amount it pays schools instead of returning the split to the way it was.
David Schmid—a member of the district’s Legislative Action Coalition (LAC), which advocates on behalf of the district for education-related legislation—told Selcer that was the message the LAC had for the district’s representatives and senators.
“And yet when we met with out legislators this year, basically they said, all of them said, ‘We hear that from all our districts, but we campaigned on paying back the shift. So we have to do it even though we know it’s somewhat smoke and mirrors that we’re giving back money that never really went away,’” Schmid said.
Selcer—who reminded Schmid that she no was longer focused exclusively on getting everything she could for Hopkins schools—said she had to consider the districts that were hurt by the shift. The shift also hurt the state’s credit rating, which raised interest rates and took money out of taxpayers’ pockets, she said.
Watch Selcer’s complete explanation in the video above and then share your thoughts in the comments section below on whether you thought the Legislature made the right decision.