Budget-balancing payment delays worry school districts

When Gov. Tim Pawlenty delayed more than $1 billion in funding to Minnesota schools as a way to balance the state budget, many school districts had to borrow money as a short-term fix.

That’s added more pressure to districts already facing tough financial times, and some worry the delay might turn into a permanent cut.

Explains MPR:

It’s an accounting trick that shifts or delays a portion of state school payments until the next budget cycle to balance the current budget. It has been done before when times were tough and in fact, the House and Senate proposed a shift last session.

What makes this year different is that Pawlenty did it on his own without the Legislature’s approval. That action has set off a disagreement among education experts at the Capitol as to whether the money can be paid back without legislative action. Some say the money will be paid back at the beginning of the next fiscal year, but others say it will evaporate if the Legislature doesn’t take action.

In an argument floated first at the end of the legislative session, DFL Senate Majority Leader Larry Pogemiller said: “[The governor] does not have the authority once he’s no longer governor to pay the money back.”

Pogemiller insists that Pawlenty didn’t delay school funding — he cut it. He said only the Legislature, not the governor, has decision-making power over how to spend money. He said Pawlenty can’t promise the money will be paid back when he won’t be in office when the bill is set to come due.

“Rhetorically, he apparently is saying someday that money will get paid back,” Pogemiller said. “He’ll no longer be governor but someday it will be paid back. I think people need to think through that. If you already know you’re going to have a $4 to $7 billion deficit. Somebody promising that you’ll get paid back someday? I think you should not take that to the bank.”

But Pawlenty administration officials cite state law that says any deferred payments from unallotment will be paid back at the start of the next fiscal year. Still, one budget expert said it would be best if the Legislature passed a law setting up a mechanism for the funding to be paid back.

For his part, Pawlenty said he’s confident the money will be there for schools whether the Legislature takes action or not.

“We believe we can do it without it, but if they want to do an extra measure of comfort or assurance, the Legislature can do it twice by putting it into law that it’s going to get paid,” Pawlenty said.

Comments (1)

  1. Submitted by William Pappas on 10/24/2009 - 05:04 pm.

    This is Pawlenty’s favorite strategy. He defers payments to the following year, disallow’s any revenue enhancements and accomplishes a whole boatload of spending cuts. He would like nothing more than to legislate these bills to be paid back in the ensuing year and find the money through more shrinking of government. This man at one time was blustering about his accomplishments in reducing homelessness. At the rate he is saddling our state with unpaid obligations he can expect his legacy of government incompetence to live on for years to come.

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