Minnesota schools to receive $463 million due to DFL budget that accelerates plan to pay back schools

Minnesota schools to receive $463 million due to DFL budget that accelerates plan to pay back schools

Saint Paul, Minnesota – As a result of action by the Minnesota legislature, Minnesota schools learned today they will receive an estimated $463 million. The recently passed budget mandates an accelerated payback of the money that previous legislatures borrowed from our school kids. This good news came in an economic report released today by the Office of Minnesota Management and Budget that shows $463 million in unaccounted revenue collected during the past budget cycle. Rather than wait until the new state revenue forecast is issued in December, the budget passed by the DFL-led legislature will accelerate the repayment to make certain schools will receive dollars they are owed and deliver it sooner. The Office of Minnesota Management and Budget will certify the final amount schools will be paid back by September 30^th.

“Paying back the debt previous legislatures piled up on our schools was a top priority for House Democrats from day one. We mandated in our budget that repayment be accelerated and today that commitment paid off,” said Speaker Paul Thissen. “This is good news not only for Minnesota kids, but for a stable state budget and a stronger economic future in Minnesota.”

The state has borrowed from schools as an accounting gimmick to patch budget deficits in previous years. The GOP-led legislature passed a budget in 2011 that borrowed $2.4 billion from schools while leaving an additional deficit for the current legislature to address. Instead of adding to the “IOU” the DFL-led legislature passed a budget that resolved the deficit without borrowing and with a plan to pay back what our schools are owed sooner. As a result, about $2 billion of the debt owed to schools will have been repaid, putting the state in a good position to fully pay back schools by 2014.  

“We made a course correction this year because borrowing from our schools is no way to balance a state budget or provide a world-class education,” said House Majority Leader Erin Murphy. “The bill we owe our schools is past due and our budget puts first things first to ensure we do the right thing and pay them back.”

Accelerating the school payback is one of many highlights of a state budget that made a historic $485 million investment in education for all learners. Along with settling past bills, the budget passed by the DFL-led legislature and signed by Governor Dayton includes:  

• More Funding for Every School in Minnesota: The budget invests an additional $234 million in the school funding formula, providing schools with an increase in funding in each of the next two years.

• All Day Kindergarten for Every Child: The budget invests $134 million to help Minnesota school districts provide optional All-Day K to every student, free of charge. Currently, only 54% of Minnesota’s Kindergarten students have access to free all-day Kindergarten, with thousands of families having to pay out of pocket.
• Reform to the Special Education Formula. The budget invests $40 million in special education reform, providing needed funding reform and greater funding equity for schools.
• Early Learning Scholarships for 8,000 Kids. The budget invests $40 million in scholarships that will help thousands more children attend high quality child care and preschool to ensure that children are prepared for Kindergarten and beyond. Families will be eligible for up to $5,000 in scholarships.

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