Student Opportunity Gaps

Monday Night Football at the Capitol

By May 17, 2012 No Comments

It appears the Vikings’ stadium debate will come to a vote sometime today in the House and possibly the Senate. The House will take up the bill first and if it passes, the Senate will have a chance to vote on it. Passage of the bill is uncertain at this time as GOP leaders are upset with Governor Dayton’s veto of their tax bill. They are threatening to not put up enough votes to pass the bill. It’s been said that each caucus is to put up half of the votes for the stadium, at least in the House.

The Governor noted in his veto letter ( that the bill would have added a $145 million budget hole in the next biennium, which is already projected to see a $1.1 billion deficit. Dayton noted that he’s willing to continue negotiations on some of the GOP’s tax provisions, but that he wants them paid for with a combination of sales tax expansion to internet sales and closing foreign operating corporation “loopholes.”

GOP leaders want to get something in return for the Vikings’ stadium, a top priority for Governor Dayton. Business tax cuts are their last option since Dayton vetoed LIFO (HF 1870) last week. With a heated campaign season on their doorstep, GOP members are also looking for political cover if they are the ones in charge when the Vikings’ stadium passes. Many have felt the wrath from tea party purists during their endorsing conventions. DFL legislators are still frustrated at the lack of a bonding bill. Others argue that we should take care of the public’s capitol building before we pay for a share of a privately owned stadium.

Will there be a last minute deal on taxes and bonding to secure the Viking’s stadium vote? The House goes into session at 10am, but will probably recess for several hours. The Senate is in at 1pm and will process a few remaining policy bills and then recess until the House takes their vote. Monday is day number 116, leaving them with three more session days to pass bills if they need more time. It will be very interesting to see how this pans out, as the outcome is far from certain.

Dayton Vetoes Legislative Approval of Academic Standards
Amidst the flurry of stadium negotiations, tax and LIFO vetoes, another education issue met a Dayton veto last week. Chapter 281 (SF 1656) would have required legislative approval of academic standards before they take effect. You can read the Governor’s reasoning in his veto letter.

Third Grade Literacy Proficiency and Fourth Grade Literacy Growth Incentive Aid
Last July’s E-12 bill created 3rd and 4th grade literacy incentive aid. The aid was originally set up to fund $80/pupil in an elementary setting. This had the potential to pay equally successful districts with smaller elementary settings less than their larger counterparts. The purpose of the aid is to incent schools to focus on 3rd and 4th grade benchmarks, so they changed the program to pay $530/pupil for students in those two grades only.

Pension Bill Includes TRA Change 
An omnibus pension bill (SF 1808) passed the House 104-24 last week. It awaits action in the Senate. The bill makes a temporary change to TRA actuarial assumptions. TRA currently assumes an 8.5% return on investment, but the new pension bill would reduce that to 8% for the next five years. Proponents of the measure had wanted it to drop to 8% permanently, but TRA negotiated the temporary drop. Proponents of the drop point to an average ROI of 5.9% over the last decade. The problem is the change would exacerbate the unfunded liabilities of TRA. Recent legislation increased district and employee pension contributions with no corresponding benefits increase to reduce the unfunded liabilities.

In addition to increased contributions, the state currently imposes a complicated pension subtraction from districts. The subtraction was put in place back in the 1990s when the state reduced employer pension obligations. The state wanted to capture some of the savings from the reduced contributions. Current law sunsets the subtraction in 2020, but legislation was introduced (HF 2468) this year to repeal it by 2014 in light of more recent changes to increase contributions. The bill would cost about $40 million, but would cover over half of the estimated $70 million increase in contributions caused by the recent change.

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