Senate Education Committee Passes School Aid Payback Bill

The Senate Education Committee today approved a bill to pay back 2011 borrowing from school aid payments—the remaining approximately $415 million that was part of the shift in the timing of payments to school districts in last year’s budget compromise.

The shift will leave more than $500 million in the state's budget reserve and cash-flow accounts. The state has not had that much cash on hand since 2008, said Education Committee member Sen. Al DeKruif (R-District 25), who supported the bill.

To end last year’s state shutdown, the Legislature agreed with Gov. Mark Dayton to borrow $700 million against the state school budget, adding to an existing $2 billion or 70-30 school aid shift. Since then, Minnesota’s budget has grown out of a $5 billion budget deficit to positive balance of $323 million, on top of an $876 million positive forecast last November, which was moved automatically into budget and cash flow accounts.

“This turnaround assures Minnesota taxpayers that the state now can pay all of the school shift created by the last budget compromise on an earlier schedule and fulfill our promise,” DeKruif said. “We recognize that this debt needs to be paid, and we can do that by letting the private economy continue to grow, without raising taxes and without making cuts.”

The bill passed on a 9-6 party line vote and goes next to the Senate Finance Committee.

Editor's note: Story provided by Minnesota Senate Media

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