Dayton vetoes school payback; calls bill irresponsible

Gov. Mark Dayton has vetoed a GOP effort to pay back some of the money the state has borrowed from schools in recent years.

Dayton called the measure irresponsible because it would have spent $430 million from the state's rainy day fund to pay a portion of the $2.4 billion owed to schools.

In recent years the governor and lawmakers have held back a portion of state funds owed to schools as a way to balance the state's budget. Schools still receive 100 percent of their state funding, but it comes in partial payments. Roughly 60 percent was paid out at the beginning of the fiscal year, with the remaining funds coming at the end of the year.

In the bill, Republicans maintained that reserve funds should be used to pay back about 20 percent of the money schools are owed from the state.

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The governor, however, did not believe it made financial sense to spend money from the reserve fund, especially as the state struggles with its budget.

Northfield Public Schools Superintendent Chris Richardson understands the GOP's motivation behind the payback, but said he also had concerns about the effort.

Richardson said he fears the reserve fund would be spent down to help ease the funding shift, leaving lawmakers looking for money in the future.

"We end up with the legislature having to come back and request to bring the shift back up to where it is now. We're basically hurt all over again," Richardson said.

Todd Cameron, superintendent of the New York Mills school district shares some of those concerns, but said schools would not necessarily turn their noses up at a partial payment from state funds of what they are owed.

"Any money is good money," Cameron said.

Cameron said the $430 million in funding payback would have only represented a small portion of the money owed to schools, and losing out on it because of the veto isn't likely to hurt his district. He is holding out for a permanent solution to the funding shift.

Superintendent Richardson hopes lawmakers come up with a plan soon to pay back Minnesota schools the entire $2.4 billion they are owed.

For Richardson that means a funding formula that gives schools some sense of the money they can expect each year.

"Without having that sustainable, predictable characteristic, we still are struggling," Richardson said.

Minnesota school administrators are pleased that at least the prospect of paying back the funding shift is on lawmakers' minds.

Also this session, Republicans floated an idea to pay back schools by using revenue from a racetrack casino. Democrats wanted to do the same by getting rid of tax advantages for foreign operating companies.

At this point, there is no definite plan at the legislature to fully pay back Minnesota school's the money the state owes them.