Minnesota Government Shutdown Compromise Would Balance State Budget By Shorting Schools

07/18/2011 06:26 pm ET | Updated Sep 17, 2011

On Monday afternoon, highway cars and intense security surrounded Minnesota's capitol building, where only officials, legislators and their aides were allowed in.

"There's not army tanks, but there's a lot of security," said Charlie Kyte, executive director of the Minnesota Association of School Administrators.

Inside the state capitol sat Gov. Mark Dayton, education commissioner Brenda Cassellius and legislative leaders, hammering out the details over one of three remaining bills required to end a crippling government shutdown. While a massive deferral of payment to the state's schools seemed inevitable, different stakeholders still thought they might be able to salvage either some money or some reforms to education policy.

Minnesota's government shutdown necessitated an immediate compromise of sorts. A tentative budget deal announced Thursday largely delayed the handling of the state's financial woes to the next biennial budget.

In the case of education funding, legislators thought it best to use money owed to schools to balance Minnesota's beleaguered budget: school districts would only receive 60 percent of what's owed to them, with the remaining 40 percent scheduled to be paid in the next fiscal year. The deferment would plug about $2 billion of the state's $5 billion deficit. The state would give schools $128 million to cover some extra borrowing fees and increase per pupil funding by about $50.

The state has turned to its schools in the past for such budget stemming, but until now, it has never taken this much money.

"I abhor it. They wear pennies on their lapels, the Republicans in the state house," Mindy Greiling, the leading Democrat on the House education finance committee, told HuffPost. "They will not think of raising any revenue. With no end in sight, I question if the deferred money is ever going to be paid back."

As Dayton wrote in a letter, "continuing the state government shutdown would be even more destructive for too many Minnesotans." He agreed with the proposals, he wrote, to "spare our citizens and our state from further damage." He expects to convene a special session once the bills are finalized.

The funding shift means that school districts across the state will have to borrow at least 10 percent more than they initially expected. The difference in the new figures for interest on that borrowing could cost districts a few teachers, librarians or arts programs.

Spokespeople for Dayton and Cassellius said they were both too busy negotiating to comment. According to Kyte, they were hammering out the details over measures that might help with absorbing the costs of extra borrowing: a series of reforms that Republicans had pushed for to begin with -- including allowing teachers to be fired by merit instead of solely seniority, making tenure harder to obtain and limiting teachers' broad striking rights.

According to Greiling, Minnesota owes its schools $3.2 billion when taking into account property taxes and pro-rated special education programming. "We have an increasing flood of school districts going to four-day weeks -- not because it's good for students, but just because they need to save money," she said. Schools are increasing class sizes, dropping extracurricular activities and firing teachers.

She called the $128 million and the per pupil increase a "fig leaf" provided by Dayton, who had initially halted Republican plans to grade schools on a letter basis, school vouchers and institute an $82 million teacher evaluation system.

Mary Cathryn Ricker, president of the St. Paul Federation of Teachers, says she expects her district to pay $450,000 in interest. "Librarians will probably thin out," she said. "We're looking at reduced support staff. It's an accounting gimmick."

Minnesota's schools can't take much more stress, said Timothy Berndt, an engineering teacher at Edina High School. Over the last eight years, he said, he'd been pink-slipped two or three times because he wasn’t tenured. This year, he didn’t have a classroom budget. And of the 15 teachers he started with, by the end of the year, he was one of just three left with a job for next year.

"It's putting a band aid on a big issue," Berndt said of the budget compromise. "We didn’t deal with this two years ago. In a few years, we'll have the same problem again."

His district's superintendent, Ric Dressen, doesn’t know where Edina will end up. The deal would defer the payment of $20 million of his $80 million budget. To plug the hole, he plans on borrowing the money. "It's going to be a significant amount of money and we'll have to address that," he said. "We continue to be challenged, trying to do our programming and support with the funds we have available. We're trying to maintain class sizes."

Last year, the district had to borrow $8 million, and paid $150,000 in interest.

Katie Campbell, 27, grew up in Edina. But by the time she returned home, after a respite from Minnesota in college and for graduate school at Columbia University's teacher college, she found herself caught in the middle of the state's financial woes.

She returned in June, hoping to land a job teaching in Minneapolis. But when she called the state's education department on July 1, the line was dead -- because of the shutdown. Schools she has spoken with about potential work don’t know how many teachers they can hire because of the financial situation. Those who do still can't hire her at the moment: Campbell needs a state teaching license, but that process has been halted by the shutdown as well.

In the meantime, she's living in her parents' house, going through boxes in her basement, walking her dog and passing time designing a website for her stepfather, a cabinet builder. "It's really frustrating," she said. "I thought it would be way easier to get a job here coming from New York City, with all the hiring freezes. Getting back there and having this happen when I moved back, I thought, 'oh my gosh, I just can't catch a break.'"

The state constitution requires Minnesota to balance its budget -- and Greiling said she might introduce a constitutional amendment to prohibit saving the state's finances by cutting into school funds.

"The Republican leadership will have to beat up the Republican rank and file to vote for this because Democrats aren’t going to," Greiling said. "Otherwise the shutdown will continue."