Special Session Looms After Session’s End
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Special Session Looms After Session’s End

Final Day of the Regular Session

Today is the last day of the regular session and lawmakers have acknowledged they will need a special session to complete most of the budget work for the state, including the education budget bill. Last Thursday legislative leaders announced the parameters of a budget agreement that should bring the session’s work to a close, but much drama remains as lawmakers work to hammer out the finite details. 

The leadership plan will keep E-12 funding at its forecasted levels for FY 26-27, but reduces E-12 spending by $420M in the “tails” budget, FY 28-29. The tails reduction will likely result from reductions in either or both the forecasted increases on the basic formula or in special education cross-subsidy aid. GOP leaders said there won’t be cuts to nonpublic school aids and DFL leaders said a plan to sunset UI benefits won’t be a part of the final bill. Yesterday, the House and Senate passed a bill to pump in $100M into the UI fund to help cover two more summer’s worth of UI costs. The funding for this bill came from dollars that were previously assigned to the Northern Lights Express rail route. This bill should be on its way to the Governor later this week. 

It’s unclear if Governor Walz will call an immediate special session, beginning tomorrow, with the hope of having it all wrapped up before Memorial Day weekend. Speculation is that if lawmakers go home this week it might stall momentum on the budget deal and we could drift all the way toward the June 30th fiscal year deadline.

Senate Tax bill Includes Seasonal Recreational Tax Base Replacement Aid

The Senate omnibus tax bill 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 Tax consideration this week if there’s a special session.

House Passes Education Finance Omnibus Bill, but Punted to Special Session

The omnibus education finance bill remains in limbo. The House was finally able to pass their education budget bill last week, but the Senate has declined to pass their bill.

Pensions Emerges in the Final Hours of the Weekend

TRA would see an improvement with a Pensions bill that emerged over the weekend. The Senate has passed it, but as of Sunday night the House had not brought it up for passage. The bill would bring the early retirement age down from 62 to 60 and reduce the penalty from 6% reduction to 5%. The state would pump in $20M each year to cover the cost of this improvement in benefits.

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

Call for Proposals Open for 2025 MREA Summit
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