House and Senate pass controversial bill to pay back part of school debt
April 2, 2012 — 2:42pm
The Minnesota House and Senate Monday passed the Republican plan to use budget reserves to pay back a portion of the state's debt to schools.
The vote was 75-56 in the House and 35-28 in the Senate on the final version of the plan, which takes more than $430 million from the budget reserve and uses the money to make a down payment on the state's debt to school districts.
DFL Gov. Mark Dayton has criticized the plan, saying it is fiscally irresponsible.
Rep. Pat Garofalo, R-Farmington, chairman of the House Education Finance Committee, said, "When you have cash on hand, the first thing you do is, you pay your debts." He called opponents of the plan "deadbeat Democrats."
DFL legislators said it was irresponsible to draw down the reserves at a time when the state faces deficits in the next budget cycle. They offered an alternative plan to close corporate tax loopholes and provide a new stream of revenue to pay back the schools. Republicans rejected that plan.
“Let's not fall into the same trap," said House Minority Leader Paul Thissen, DFL-Minneapolis. "Let’s not take shortcuts to cover the tracks of our bad decisions.”
To balance state budget, the state has shifted and delayed payments to schools, and now owes $2.4 billion to schools.
Even if Dayton blocks the bill with a veto, this issue will likely reappear during Legislative elections in the fall.
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During an MPR interview in front a live audience, Dayton reiterated his support for middle class tax cuts, a big boost in transportation funding and universal prekindergarten during next year's legislative session, all priorities he was unable to achieve in the 2015 session.
State Auditor Rebecca Otto, reeling from a new law allowing counties to hire private audit firms to review their finances, said in a statement she has hired outside counsel "to help me assess the implications of this law and its impact on the core function of auditing."