The Free Press, Mankato, MN

State budget: a closer look

July 20, 2011

Education bears much of burden in budget deal

In the hours after Gov. Mark Dayton signed the higher education and K-12 education funding bills into law, area education leaders expressed relief the budget saga was finally over.

“We’re ready to move forward,” St. Peter Supt. Jeff Olson said. “It’s refreshing to look ahead.”

A look ahead, however, shows that schools and universities alike will be sharing much of the burden for balancing the state’s $5 billion deficit.

Aid delays for K-12

In the $14.5 billion K-12 funding bill, public schools are facing the largest state aid shift in history. After the Legislature set a record in the last biennium by delaying 30 percent of state aid to schools, lawmakers topped that mark by switching to a 60-40 percentage.

For schools, that means receiving only 60 percent of anticipated state funding in the first year of a biennium with the remaining 40 percent to be paid in later years. The shift will help the state save $780 million.

And though there is no clear timeline for when, or how, that money will be paid back, area superintendents were unanimous that the delay was preferable to a reduction.

“K-12 came out pretty well comparatively,” Lake Crystal Wellcome Memorial Supt. Les Norman said.

The final K-12 bill did include a $50-per-pupil increase in state aid — the first such increase in about a decade. That increase is designed to off-set the interest costs districts accrue when they secure short-term loans to cover cash flow while the aid delay is in effect.

Norman said, however, that the increase would not cover the interest costs for his district’s most recent loan — a $1.1 million loan approved by the School Board on Monday.

“It helps, but it falls short,” he said.

The K-12 bill also included a number of policy changes, including: new evaluation systems for teachers and principals and a repeal of the Jan. 15 deadline for districts to finalize teacher contracts.

 The bill further included a number of measures that return some funding control to local districts — such as, allowing districts to transfer staff development funds to the general fund to help cover deficits and eliminating some so-called “maintenance of effort requirements” that keep districts from reducing costs in certain areas.

“Any time the state gives us more flexibility, that is welcomed,” Mankato Area Public Schools Supt. Sheri Allen said.

Higher ed reductions

Lawmakers approved a nearly $2.57 billion higher education bill, which represents a slight increase (relatively speaking) of $60 million over the bill passed (and vetoed) at the end of the regular legislative session in May.

Wednesday’s final version, however, still amounted to a reduction of slightly more than 10 percent for both the University of Minnesota and the Minnesota State Colleges and Universities system.

Both Minnesota State University and South Central College approved their 2011-12 tuition rates in June and neither expects to revise those rates. MSU’s tuition will increase 5 percent, from $6,048 to $6,350; SCC’s will increase 4 percent, from $4,472 to $4,650 (tuition values do not reflect fees, books or room and board).

“We don’t anticipate needing to make any changes,” said Steve Smith of MSU’s finance and administration department.

The Legislature also approved $132 million in bonding projects for MnSCU — but did not include planning money for MSU’s new health building. The bill also did not include $12 million for upgrades to SCC’s Faribault campus, a decision that SCC spokeswoman Ann Anderson called “disappointing.”

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State budget: a closer look