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GOP, Dayton Differ Over Plan To Repay Schools

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ST. PAUL, Minn. (AP) — Minnesota legislative Republicans and Democratic Gov. Mark Dayton differed Thursday over a plan to dip into state rainy-day funds to more swiftly pay schools for IOUs from past budget fixes.

The disagreement highlights a part of last summer’s deficit solution that is certain to resurface in the fall campaign. More than once in recent years, the state temporarily held back a portion of aid payments to schools to reduce its deficit. It now owes more than $2 billion to schools.

Now that the state’s finances are improving, Republicans say they feel comfortable tapping into a reserve fund so schools don’t have to wait as long for catch-up payments.

Under existing law, schools are due to see more than $300 million in debt repaid soon because state finance officials are projecting a budget surplus. The GOP bill, which cleared a House committee Thursday, would pare the state’s debt to schools by an additional $430 million.

“A prudent course of action when you have cash on hand is to pay off your debt,” said Rep. Pat Garofalo, R-Farmington.

Dayton and his budget commissioner warned that it would put the state’s finances at risk if the economic recovery falters.

The bill would leave about $577 million in the state’s checking and savings accounts. Dayton said he’s not comfortable drawing the balances down that far because it would be harder to react to a sudden downturn late in the budget cycle.

“Everybody wants to repay the schoolchildren,” Dayton said. “We shouldn’t have borrowed from them in the first place — wouldn’t have under my proposal. Now they’re trying to bail the legislators out before the election on the back of fiscal responsibility for all the citizens of Minnesota.”

The repayment plan is part of a broader bill that would also change teacher job security rules, which is controversial in its own right. The bill could get a House vote in coming weeks.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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