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Plan to End MN Shutdown Borrows $70M from Schools

Deal has state keeping $700 million more of dollars due to school districts.

surprised many, but education officials saw something in it they found very familiar: the state government borrowing millions of dollars from money that's due to Minnesota school districts.

Dayton said he'd agree to a June 30 GOP offer that balances the state budget and would end the with a so-called "shift" of $70 million from school funding—on top of $1.4 billion school shift already in place.

"It’s a tool that the legislature has used over the years but we’ve never gone this far," said Scott Croonquist, executive director of the Association of Metropolitan School Districts.

"We have a lot of frustration with the shutdown and its effect on schools," Croonquist said. Some students felt those effects even during summer, with cancellation of state tests.

Borrowing money from school districts to pay for state government is "poor public policy," Charlie Kyte, outgoing executive director of the Minnesota Association of School Administrators, said on Minnesota Public Radio Thursday.

It costs schools interest money they either pay on loans from banks or forego earning on their reserves, Kyte said.

Local View
One of the districts that has incurred interest payments from borrowing to make up for state funding shifts is Spring Lake Park (District 16), which draws students from an area including a northern section of Fridley.

"Long term this is a negative impact on all schools as it pushes the structural budget problem at the State to the next biennium," Dr. Jeff Ronneberg, District 16 superintendent said in an email Thursday afternoon.

"In addition," Ronneberg added, "it provides a greater structural gap in funding with the shift that will need to be made up in the future."

Will districts ever see the shifted money? Kyte on MPR said the state has in the past always paid it back, over time.

Ronneberg is cautiously confident the state will return the funds. "I can't imagine that they will become cuts at some point, but that's always possible."

Julie McMonigal July 14, 2011 at 08:56 PM
I think its is horrible to take from our schools which is esstentially taking from our children! I pay enough in taxes to make sure my children get a great education! I am so saddened by this shut down and how it is effecting Minnesotans including our children! We as parents have enough to worry about, with keeping our children safe, fed and clothed, we shouldn't have to worry about them getting a proper education because some baboons can't figure out how to cut their "OWN" paychecks. I am actually thinking of moving me and my family to a more financially stable state. But what for? Now we have to deal with the federal government shutdown next. Makes me ill.
John Anderson July 15, 2011 at 01:27 AM
New Hampshire passed a budget that was smaller than the previous biannium, had no borrowing and did not raise taxes...it is tempting.

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