Session’s End Looms: Negotiations Intensify
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Session’s End Looms: Negotiations Intensify

Final Week of the Regular Session

We are down to the final week of the session. Legislators can vote on bills until midnight on Monday, May 19. Legislative leaders resumed closed door negotiations last night after breaking for the fishing opener and Mother’s Day. Staff in the Revisor’s office and key House and Senate bill drafters have indicated that a deal needs to be in place early this week for them to have enough time to draft final omnibus legislative packages for the legislature to vote on before the deadline. It’s very possible they’ll need a short special session in the days following adjournment and the skeptics think this process will drag all the way into June before leaders are able to put a deal together that can pass through a tied state House, the Senate DFL and that Governor Walz will sign into law.

Senate Tax bill Includes Seasonal Recreational Tax Base Replacement Aid

The Senate unveiled their omnibus tax bill last week and it includes our Seasonal Recreational Tax Base Replacement Aid proposal! To reduce the immediate cost to the state the bill sets a 15% threshold of SR property before a school district qualifies for property tax relief. Voters would still be required to approve an operating levy in order for new funding to flow in. 

The House Tax bill doesn’t include this proposal, but we’ll be advocating for this as the Tax conference committee begins work later this week.

House Education Finance Omnibus Bill in Limbo

The omnibus education finance bill remains in limbo as the House DFL members are refusing to put up votes due to a proposed sunset of unemployment insurance benefits for non-certified staff on September 8, 2028. 

In 2023, when the UI mandate was put in place, the legislature created a fund with $135 million to pay for the costs of summer UI benefits. To date, $102 million of the original $135 million was distributed for UI costs during the 2023 and 2024 summer terms. Estimates for this summer are closer to $63 million and the current House bill would pump in another $30 million to augment the fund so schools aren’t required to bear the cost locally. However, without a long term funding solution, eventually school districts would be responsible for the costs. 

SEIU and Education Minnesota and their legislative supporters argue that UI benefits are necessary to retain staff, ensuring continuity of services for students. An amendment to continue unemployment insurance for hourly school staff failed along party lines. School governance and administrative groups have argued that without a state funding source the program should be terminated. Some have argued that non-certified staff compensation should be determined fully through the local collective bargaining process without the external pressure and obligations that the UI system requires. School districts self-insure for unemployment whereas the construction industry, which is often used as the example for why school staff should have UI benefits, pays into the UI system.

Senate Waits for the House

The Senate Education Finance omnibus bill has cleared all committee hurdles and sits ready to be taken up for a floor debate. Both bodies originally planned to take up their respective bills last Friday, but with the stalemate in the House, Senate leaders decided to hold off on the Education floor debate. We hope to see some action on it this week, and anticipate lengthy discussions and many amendments to be offered.

Snapshot of the House Education Finance Bill, HF 2433

  • Renaming Local Options Revenue (LOR) to Basic Supplemental Revenue (BSR), and creating a new first tier of $40/pupil, which is  all state aid.
  • $30M one-time infusion into the Unemployment Insurance fund for school hourly workers
  • The UI mandate is sunset on September 9, 2028. 
  • School Library Aid is repealed, and some of the revenue growth in Student Support Personnel Aid is captured, to pay for the new first tier of BSR and the one-time infusion of UI funding.
  • Special Education Transportation reimbursements are reduced from 100% of eligible costs to 95%, but transportation of homeless and highly mobile students remains at 100 percent of eligible costs. 
  • LTFM expanded to allow districts to levy “above the $100,000” line for roof replacement and repair.
  • $40M for the READ Act
  • Modest flexibility in the Nutrition Account 
  • No changes to Compensatory

Snapshot of the Senate E-12 Bill, SF 2255

  • Blinks off the formula inflator for the “tails” period or FY 28-29: a loss of $600M in planning money for schools
  • Repeals nonpublic school aids, including nonpublic transportation aid
  • Increases the EL cross subsidy aid from 25-33%
  • Increases the Special Education cross subsidy aid from 50-53%
  • Modifies Literacy Incentive Aid
  • $39M for a one-time Compensatory Aid hold harmless effort
  • LTFM Roof “above the line” levy expansion
  • Expanded nutrition account flexibility and allowable uses
  • $80k minimum for Student Support Personnel Aid for all districts
  • New distribution formula for the cooperative student support personnel aid
  • School Board authority to renew a previous capital levy previously approved by referendum
  • Consolidation transition aid increase 

Education Committees & Schedules

Deadline Looms with Two Weeks to Finalize Budget
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