Schools' tough math problem? Don't expect a solution Friday when Pawlenty and legislative leaders meet

If you like watching nicely dressed people smugly pointing fingers at each other, then you'll probably enjoy Friday's meeting between Gov. Tim Pawlenty and legislative leaders.

But substance for the state of Minnesota?

Forget it. Based on the public comments already made by some of the participating legislators, there appears to be almost no chance of anything significant happening at this meeting, which is supposed to deal with $1.8 billion in school funding "shifts" the governor ordered in his unilateral budget-balancing act last June.

The governor appears to want the Legislature to accept responsibility for the shift and, for the moment, legislative leaders are likely to say, "No thank you," to that offer.

Start with this: Why does it matter whether this is a Pawlenty shift or a legislative shift?

Worrisome issue for schools
Some schools worry that if this remains Pawlenty's unilateral shift, there will be no legal authority mandating that the schools ever receive the $1.8 billion. If it becomes a legislative shift, state law requires that the schools be second in line to be paid back, right after rainy-day funds are restocked. Payback might take 10 or 20 years, but eventually there would be a payback.

It's the difference between having the $1.8 billion "loaned" to the government, as opposed to being "stolen by" the government, according to Charlie Kyte, executive director of the Minnesota Association of School Administrators.

Though school funding shifts have become an almost routine part of the biennial state budget balancing act, the governor's unilateral action was unique. There is concern among some legislators, school superintendents and, perhaps, even the governor about no payback requirement tied to the governor's action. And some school officials fear that at the end of the biennium in 2011, the $1.8 billion will simply disappear into thin air.

"We're trying to convince the governor and the Legislature to do the statutory shift," said Kyte. "The Legislature would pass it, the governor would sign it. In the past, that's the way it's always been done."

The $1.8 billion, by the way, represents about 27 percent of the money schools expected to receive from the state.

Districts count on low-interest loans to tide them over
School districts have been able to survive such shifts because they could get low-interest loans for two reasons that give comfort to financial institutions. First, done traditionally, the shifts have come with the guarantees of a state payback. Second, districts have the power to raise taxes.

But even low-interest loans cost districts money. Beyond that, school administrators are keenly aware of the ever-increasing overall budget woes. Given that K-12 spending accounts for about 40 percent of the state budget, the time may come when cuts replace shifts.

"All of our superintendents are living on Tums," said Kyte. "If it gets worse, the Tums will turn to Valium."

Leaders of charter schools already are heavy into the Valium stage of these hard times. Unlike school districts, charters don't have access to loans because they don't have either a long history with financial institutions or taxing authority.

Given these realities, why won't our, ahem, leaders reach some agreements at Friday's meeting?

Rep. Mindy Greiling, DFL-Roseville, is head of the House Education Finance Committee and one of the most passionate supporters of public education in the state.

She believes the meeting will end up being only about "winning political points."

What Rep. Greiling expects to happen
Greiling is not afraid to call 'em as she sees 'em. And here's her take on the state's top political leaders:

--The governor "just wants to cut and shift into the future" so he can maintain his solid no-taxes footing with the conservative base of his party.

--While the governor plays to his base, Greiling believes her own party's leaders, House Speaker Margaret Anderson Kelliher and Senate Majority Leader Larry Pogemiller, "like the limelight and will try to score political points against Pawlenty."

Taken a step further, the script for the meeting will go something like this, according to Greiling:

Pawlenty will say that the Legislature should accept his unilateral shift because that maneuver even showed up in the balanced budget the Legislature came up with at the end of session, a budget package vetoed by the governor.

But that's a classic case of cherry-picking by the governor, according to Greiling. Yes, the legislative budget did include the shifts, but it also included tax increases that would have helped balance not only the current biennium budget, but future state budgets, which show the state's financial problems getting only worse.

From her view, the leadership, especially Pogemiller, won't make any deals with the governor until Pawlenty at least acknowledges that the $1.8 billion "shift" is actually an education spending "cut" in its current form.

Meanwhile, she expects the governor to continue bashing local levels of government — in this case, school boards — for continuing to give even minuscule pay increases to teachers. "They must not need the money if they have enough to give raises,'' Pawlenty is fond of saying.

Kyte points out, however, that some local teacher unions, such as the one in the massive Anoka-Hennepin County district, did accept a freeze in an effort to preserve jobs.

Though nothing substantive is expected to happen Friday, the shift problem likely will end up being solved by the legislative body as a whole.

Additionally, look for legislators of both parties to seek meaningful reforms that will help at least diminish the budget woes. It looks, though, as if the solutions may not come from the so-called leaders, who seem to be too busy trying to score political points to make a difference.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.