Saturday, March 28, 2015

Minnesota E-12 Budget in Trouble--Part I


I'm beginning a series of posts on the K-12 Budget for the coming biennium, because I believe that Public Education is facing an impending crisis, but that the education community has not yet woken up to that fact.   Last year, the Governor and DFL controlled legislature provided desperately needed relief to K-12 education, after years of really tough times. Partly, those difficulties resulted from the great recession which began in 2007.  But it also resulted from (a) tough budgets during years of divided or Republican budgets which failed to address major education funding (b) a pro-labor bargaining structure which forced school districts to provide compensation increases above the funding increases provided by the legislature, (c) a legislative appropriation system that completely ignores cost, and instead focuses almost entirely on political arbitrage amongst power blocs at the legislature, and (d) a bankrupt special education structure that intentionally underfunds special education and "cross subsidizes" the deficit by transferring money out of regular education.  

Let's being by stealing some information from the Senate's introduction to Minnesota budget basics:  This year, the Republicans are focused on cleaning out the surplus, a strategy that has in the past reaped short term political gains for the party, and Democrats are focused on creating excitement by diverting most of any K-12 increases into early childhood education.   Under cover of providing huge increases to early childhood education, the Democrats evidently feel that they can skate by unnoticed if they hold down K-12 increases to levels typically seen only in years of fiscal crisis.   And so, I've resolved to write a bit about education finance in Minnesota, and begin today with the start of a series of primers on K-12 budgeting.

A biennial budget is a two-year spending plan[1]. The focus of the biennial budget for the State of Minnesota is to determine desired levels of appropriations to state agencies. On the fourth Tuesday in January in odd-numbered years, the Governor issues what he or she believes should be the budget for the following biennium[2].  The most important fund is the General Fund, both because it is the largest fund and because its use is more flexible than other funds.  A biennium is a two-year period. In Minnesota, an operating budget is made for a fiscal biennium, which is made up of two fiscal years . Fiscal bienniums for the State of Minnesota begin on July 1 of odd-numbered years and end on June 30 of odd-numbered years. Fiscal bienniums are referred to by their fiscal year names. For example, July 1, 2003, is the beginning of the 2004-2005 biennium.

The budget base is the common starting point in the construction of the next biennial budget. Minnesota statute mandates base budgets be set from current appropriation levels.  Minn. Stat. sec. 16A.11 subd. 3[3].  In the second post, we'll take a look at the proposals by House, Senate and Governor and discuss what they each mean potentially for K-12 education.


[1] http://www.senate.mn/departments/fiscalpol/reports/2005/budgetbasics.pdf
[2] https://www.revisor.mn.gov/statutes/?id=16A.11
[3] https://www.revisor.mn.gov/statutes/?id=16A.11 Tables listing expenditures for the next biennium must show the appropriation base for each year. The appropriation base is the amount appropriated for the second year of the current biennium. The tables must separately show any adjustments to the base required by current law or policies of the commissioner of management and budget. For forecasted programs, the tables must also show the amount of the forecast adjustments, based on the most recent forecast prepared by the commissioner of management and budget under section 16A.103. For all programs, the tables must show the amount of appropriation changes recommended by the governor, after adjustments to the base and forecast adjustments, and the total recommendation of the governor for that year. 

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