Education Notebook

ARTICLE: Pawlenty proposes Race to the Top-focused bill for second heat of federal program

ST. PAUL — Gov. Tim Pawlenty again raised the banner of education reform Monday as he released a comprehensive bill that includes many of the initiatives he previously pressed the Legislature to support.

The bill is related to the second round of the federal Race to the Top application, an Obama administration program that seeks to award a total of $4.35 billion to a handful of states that are picked from a competitive application process.

The first round recently wrapped up, with Tennessee receiving $500 million and Delaware receiving $100 million. Minnesota was not named a finalist in that round and the state has until June 1 to apply for the second round of funding.

"The only question for Minnesota will be, 'Do you want to lead or do you want to be late to the game?'" Pawlenty said in a conference call.

What do YOU think? Is education funding a 'black hole?'

As talk about a possible levy referendum in Rochester ramps up, the opinions are starting to come in about education spending. Rochester resident Dale Stowers wrote a letter to the editor about this, explaining that he feels the looming levy question leaves him in a no-win situation.

I think he poses an interesting question, not only to Rochester residents but also to those living in other communities that are considering a referendum. How does my regular reader respond to this? Here's the letter from Mr. Stowers (which also appears in today's paper:

Regarding the commentary in the Post-Bulletin on Feb. 24 from Rochester art teacher Michael Carson:

I am advised to endorse this school district's current leadership. I am urged to stifle any and all negative opinions regarding such. I am asked to vote for the school levy in spite of my convictions and forego my freedom of speech to express my opinion. I am painted as an enemy of the students of Rochester if Ido not vote yes.

If I vote yes on the school levy, the school board and the overpaid superintendent and cabinet would assume they have my tacit approval of the way things have been run in the past few years. This is not the case, and I will not vote for a school levy to allow the administration to continue the status quo. This is the same old song and dance with a different singer.

Former Gov. Jesse Ventura said it best: "Education in Minnesota is like a black hole that will never ever have enough money."

-Dale Stowers, Rochester

What do YOU think?

If you don't like the specter of huge public education funding cuts, don't read this blog entry (news from St. Paul)

Minnesota's public education funding could receive a tremendous thump from one bill that has been brought forward in the State House.

The bill, HF3082, would cut back state education funding drastically, to the tune of $9.3 million in Rochester alone. It would slice funding from $6.683 billion to $6.193 billion, a change on average of $517 per pupil.

Now, rarely do bills this large emerge without any changes, and it's important to note that this has only been proposed in the House. (It's first reading was Monday.) But these types of bills are important to note if only for forecasting what could happen with Minnesota's education funding this legislative session.

I don't want to cause any uneeded panic like some types, but this bill is worth noting. Here is a .pdf of every state school district, organized by district number.

LINK: House file HF3082
LINK: Proposed reduction in school revenue (pdf)

(Hat tip to Minnesota School Boards Association)

Rochester looks for funding flexibility from state, average taxpayer could lose about $10 to $15

ST. PAUL — Rochester school officials asked the state Legislature for funding relief on Tuesday morning, specifically for flexibility in light of upcoming budget cuts.

Rochester Superintendent Romain Dallemand and finance director Larry Smith testified. The Senate Finance Committee reviewed the two bills, which were authored by state Sens. Anne Lynch, DFL-Rochester and David Senjem, R-Rochester.

With education officials estimating that the state will need to cut back education funding, many are pursing other avenues to seek some latitude from the state's rigid funding statutes. These bills, if enacted, could possibly allow Rochester schools to offset deep program cuts, Dallemand said.

The first bill allows Rochester to sell district property and then use those dollars in the general fund. That responds to the district's wishes to sell what has been described as roughly 10 acres of property on the northeast side of Century High School, and then use those funds to offset upcoming budget cuts. Currently, state statutes limit where those proceeds can be used, and the general fund is not one of them.

The other bill would allow the school district to transfer no more than $555,000 from the debt redemption fund to the general fund. When the school district creates its property tax levy each year, it has to levy 105 percent of any outstanding bond debt, in order to make sure that amount is covered. Typically, that 5 percent is eventually reduced from the property tax levy.

This move would transfer that money into the undesignated general fund, instead. According to Smith's estimates, the move could raise taxes by $10 to $15 for a taxpayer with a $250,000 home.

Article: Talk of a referendum in Rochester's future

(Here's an article that will appear in tomorrow's paper, about upcoming school funding. This is the one I teased earlier on Twitter. Also, there's a link at the bottom listing all the cuts made since the 1992-93 fiscal year - E.)

With cutbacks that continue to put teachers on the unemployment line, the talk of a levy referendum to buoy the district's finances has floated to the top of Rochester public schools.

School board members and district officials last year abandoned the idea before anything truly formalized, reasoning that voters would soundly sink such a measure. But now, school officials believe the only other solution would be to drown in budget reductions.

Minnesota government to schools: The check will be in the mail, eventually

In an unprecedented move, the Minnesota government has proposed delaying the payment of about $423 million in state aid to 231 school districts this spring in order to cover its own bills over the same period.

The state needs to increase its own cash flow during March, April and May and state statute requires the education payments to be held off so that the state avoids short-term borrowing. The statute requires the aid to be repaid by May 30.

Districts that have solid reserve fund balances are impacted by the measure. But the gap could still leave many seeking short-term loans to cover their own fund balances.

Rochester public schools are expected to float about $15.8 million to St. Paul, which measures fifth-largest in the state. Still, according to district officials, they should be able to avoid any short-term borrowing. "We will be able to whether the storm this spring and not have to go out and borrow," Rochester finance director Larry Smith said.

However, things don't seem as rosy in Pine Island, one of the many schools who will likely need to borrow money for at least a few weeks. Superintendent Chris Bates expects to take out short-term loans in covering some of the $1 million of state aid that will be delayed to his school system.

"Is this going to be a big deal? Yeah," Bates said. "The state's in a mess, let's face it. They are facing decisions and times they have not faced in a lifetime."

Minnesota has found itself with nearly empty coffers largely due to shortages within sales and income taxes, which experts say were brought on by the Great Recession. Still, the plan has been hit hard by some who say it passes the buck to school districts figuratively, but not literally.

While talking to the Rochester Area Chamber of Commerce on Tuesday morning, state Sen. Ann Lynch said this punishes school districts that have been fiscally responsible.  "The notion, proposal on the table, to steal the reserves from our schools across the state of Minnesota is not leadership," said Lynch, a democrat who lives in Rochester.

In asking for a response to Lynch, Governor Tim Pawlenty's press secretaries directed comment to the Minnesota Department of Education. Education Commissioner Alice Seagren released statement Tuesday afternoon that said districts who have solid reserve funds have been targeted for the loans.

"These payment delays are required by state law under these circumstances," Seagren said. "The state’s cash flow situation reflects lower than anticipated revenues due to the struggling economy."

The state will delay aid to the impacted schools on March 15, March 30 and April 15. They are expected to pay it back by May 30. Minnesota has never used this funding mechanism before, Minnesota School Boards Association Governmental Relations Director Grace Keliher said. It was created in 1986.

The possible amounts delayed changed over the past few days, too. Rochester's possible amount to be delayed hovered near $27 million at one point, which is roughly the same amount as the district's entire reserve.

If the state decided to take that much, Smith said the district would most definitely need to borrow funds.
Austin public schools shouldn't be impacted too greatly by the delay. Only 3 percent of their aid payments in March and April, or $118,000, will be delayed.

Rochester could be hit hard next year though, if the state needs to tap into this law again. If the amount of delayed funding increased — and with the next state biennium already estimated at a $5.4 billion deficit, it could — Rochester might find itself passing the hat.

In response to the delayed-aid law, state Sen. Terri Bonoff, DFL-Roseville and Rep. Mindy Greiling-Roseville proposed abolishing the measure on Tuesday.  It's unknown at this point if that idea will gain any traction.

Rochester ready to discuss state funding quagmire that could borrow dollars from schools

Rochester school officials will learn how a recent plan by Governor Tim Pawlenty could leave the district needing to secure loans in order to pay bills.

To simply what is going on: Pawlenty has floated the idea of having the state borrow money from school districts that have saved up reserve funds. Reserve funds are used to pay bills and keep the district afloat until state aid payments come in. The reserve funds also allow districts to keep a strong bond rating, which Rochester has done. Keeping a strong bond rating comes into play when districts have long-term loans like school construction and renovation.

**Editorial comment alert: Undesignated/unreserved funds are sometimes called "rainy day" funds, but I think that is mostly by people who are uninformed, for the reasons I outlined. Keeping a stable reserve keeps the district's bond rating high, which saves money in the long run on long-term loans. Saving money on those loans helps taxpayers, because they often pass referendums to fund those loans.**

ANYWAY, Rochester school officials will discuss what could happen with these plans, at 5 p.m. on Tuesday night. A story will follow.