Greetings,

2009 End of Session Report

MFT Lobbyists, Julie Sabo & Rose Hermodson

NO AGREEMENT TO FIX BUDGET
K-12 BILL SIGNED WITH NO LINE ITEM VETOES

In the final hour of the session after fruitless negotiations with Governor Pawlenty about how to solve Minnesota's $6.5 billion budget shortfall, the House and Senate passed a second tax bill to close the gap and balance the budget.  The bill also included additional cuts and the education payment shift proposed by the governor.  Pawlenty is expected to veto this bill as he did the first tax bill.

On May 14th, the Governor announced that he would use his unallotment authority and line item vetoes to balance the state budget rather than raise permanent revenue to solve the states $3 billion funding gap. Pawlenty also announced he would NOT call a special session to resolve his differences with the House and Senate.

Originally, the governor had proposed to balance the budget through a combination of cuts to all areas except K-12, shifting $1.2 billion of education aid payments and levies into the next biennium and borrowing from future budgets through a bonding process. This was his way of covering a $4.6 billion shortfall. 

The House and Senate refused to push so much of the shortfall into the next budget cycle and passed a tax bill that would have raised nearly $1billion of on-going revenue to help.  This was on top of meeting most of the cuts proposed by the governor for major areas such as Health & Human Services and Higher Education.  The Governor vetoed the tax bill but signed most of the spending bills after making some severe cuts in a few of them.   The House & Senate refused to agree to the shifts unless the Governor was willing to adopt some type of permanent revenue i.e. tax increase.  There was over a $3 billion gap to be filled and legislators wanted to at least fill a third of this gap with permanent revenue. 

The House was unsuccessful in overriding the Governor's line-item vetoes and his veto of the tax bill thus setting the stage for a chaotic budget scenario to develop through an unallotment process and leaving a gaping hole in the next 2012-20013 budget as well.

Unknown Impact on Education:
The impact of all the funding maneuvers on education is an unknown. HF 2, the Omnibus K-12 bill did not sustain any line-item vetoes and had no cuts and no new funding for education. However, one-time federal stimulus money was used to fill a $500,000,000 revenue hole in this bill. The House and Senate had divided this evenly between the two years of the budget. To keep education from being cut in this budget, the stimulus money was used to replace a half billion dollars of money the state does not have.

What is not known is what the Governor will do about delaying or unalloting aid payments to school districts during the next two years.  Also, if the Governor unallots K-12 funding, what is the status of the federal stimulus money?   The federal government requires any use of federal stimulus money must first be used to backfill any cuts to K-12 and higher education.  As we move forward into the next biennium, unless there is some type of permanent revenue, this half billion hole remains. The shifts, if they occur, are only a one time fix and can not happen again.  In addition, the state needs to repay this shift so any new money "if the economy begins to recover" will be used to fill the hole and unshift the aid payments.  This is a serious long term problem for the state but, more importantly, for education funding increases in the future.  That is why Local #59 and your lobbyists were urging you to call your legislators and the governor about supporting permanent, on-going revenue.

Self-Governed Schools:
One of the successes of the session was the work that Local #59 did in helping establish legislation to allow for the creation of site-governed schools within school districts.  This will allow teachers and parents to submit proposals to the board to create unique school options and have control over how the school is run including the leadership model, school organization, learning  model, curriculum and assessments, policies of the school, budgeting and staffing decisions. 

This is like chartering within the district so that all staff stay under the contract and remain school district employees.  The first informational meeting was held at Local 59 on Monday, May 18th.  More information on this program is available through Local #59 for those interested.

Anti-Bullying Policy:
School districts will be required to adopt a written policy by July 1, 2010 prohibiting bullying, intimidation, violence, and patterns of harassment including electronic forms and using the internet. 

HF 2-- K-12 Omnibus Bill Provisions:
--Reduces state appropriations for the general education revenue by $500 million and directs the commissioner to replace it with $500 million of federal stimulus dollars.  Creates a fiscal stabilization account in the state treasure to hold the federal stimulus money.
--No changes in alternative teacher compensation program funding (TAP & ATTPS).  It remains part of the general education formula.
--Extends district authority for two years to transfer up to $51 per pupil from the capital operating account to the general fund.
--Safe Schools levy set aside for licensed counselors, social workers, psychologists and school nurses remains with some modification in how calculated. Modifies language on peer review, mentoring and coaching for both probationary and tenured staff.
--Suspends for two years the requirement that a district set aside two percent of the general education amount for staff development. However, requires staff development plans to be consistent with teacher relicensure requirements. 
--Makes changes in the relicensure process for teachers to allow them to present to their local licensing committee evidence of reflective practices that 1) support student learning 2) use of best practices 3) collaborative work with colleagues and 4) continual professional development.  The specifics of this will be implemented by the Board of Teaching.
--Appropriates $750,000 for math and science teacher centers.
--Eliminates voters ability to petition to revoke an existing referendum.

Standards and Assessments:
--Ties course credits to state and local academic standards.
--Requires students to successfully pass (GRAD) state graduation exams impacting 9th grade students beginning in 2012-13.
--Provides an alternative for passing the GRAD effective for those in 8th grader through the 2009-10 school year.
--Establishes world language proficiency certificates and outlines requirements
--Provides a variety of definitions for education accountability and assessment practices for the MCAs including growth, value-added, value-added growth, adequate yearly progress, low growth, medium growth and high growth, and proficiency. This appears to set the stage for the Governor's "Pay for Progress" proposal that did not pass.
--Clarifies what "comprehensive, scientifically-based" reading instruction is.

Other Provisions:
--Makes changes to special education statutes to more closely align state laws with federal requirements.
--Requires districts to submit a budget to the MN Department of Education for use of integration revenue, sets established uses for the revenue and directs the commissioner to analyze the substance of districts' integration plans for a report to the legislature.  (It should be noted that integration revenue has come under intense scrutiny by legislators and the intention is to make significant changes in this area in future sessions.)
--Allows a child's parent or guardian to designate a "significant individual" to participate in a school conference and have data on the child with prior written consent.
--Establishes parameters for alternative learning programs.
--Makes substantive changes to charter school laws to strengthen accountability and oversight.
--Establishes a Minnesota Reading Corps program through Americorps.
--Sets project-based learning requirements and revises other requirements for on-line learning programs.

Early Education:
--Requires an assessment of reading instruction for Pre-K and elementary teacher licensure candidates. Does not impact currently licensed teachers.
--Establishes a voluntary standards-based quality rating and improvement system for early learning and care programs.
--Set requirements for school readiness programs including staff-child ratios and transitioning children into kindergarten.
--Provides grants for ECFE to assist American Indian families.

Pensions:
The omnibus pension bill was stripped of the provisions, Article 6 of the bill, that would have funded the deficit in Teacher Retirement Association Fund and also provide a pension benefit increase targeted for post-89 active teachers. This was done late Sunday night (early morning) in a meeting of the House Rules Committee. The governor had indicated he would veto the entire bill if this provision was in it.  As a result, legislative support for the TRA funding and benefit increase diminished and the decision was made to drop that article in the bill.  The Senate had already passed the bill but with barely enough support after attempts to modify or eliminate that part of the bill. 

The biggest issue was how to cover the cost of the $20 million contribution increases required of school districts at a time when there was no increase in funding for education and potential shifts or cuts coming due to the budget shortfall.  Although districts would have had a two-year delay before this was required, legislators were reluctant to obligate the state and districts at this time.  Facing a certain veto  and after spending most of the session making cuts in essential programs, legislators decided to drop this provision in the bill at this time.

Statewide School Employee Health Bill:
The statewide school employee health pool bill did not pass.  Although a conference committee resolved the differences between the House and Senate versions of the bill on the last day of the session, it was not brought to the floor for a vote before the midnight deadline.  As a result the conference committee report can be considered next session.