So Close . . . Yet So Far Away. I may as well start with the Hall & Oates’ song that sums up how many are feeling given the Legislature’s failure to come to agreement on a broad range of funding bills that spelled doom not only for spending in a variety of budget areas, but also dooming the tax bill whose passage was contingent on reaching agreement on the spending side of the equation. It was on May 16 that the Governor and legislative leadership agreed on a budget framework built around a $4 billion tax cut package (spread over three years), $4 billion in new spending spread over a variety of budget categories (again spread over three years), with $4 billion remaining on the bottom line for next biennium. It was initially thought that the tax bill would be the most difficult to reconcile, but work on that bill was successfully finished with more than a day left for the budget bills to be successfully negotiated between the House and Senate conferees. As a result, next to nothing addressed by the overarching budget agreement came to pass.
The education conference committee appeared to be coming close to agreement, but the vast differences in the bill that existed coming into the conference committee just couldn’t be overcome. It’s important to remember that the Senate came into conference with a single funding provision (Learning Essentials for Teachers of Reading and Spelling at $30 million) while the House bill spent $1.2 billion dedicated to a broad range of initiatives. That made it relatively easy for the Senate to expand their bill while the House had the challenge to pare their bill down. Reduction in the special education cross-subsidy would have ended up being the largest appropriation in the final agreement, but there was a considerable difference in the last offers coming from the House and Senate. The Senate had put almost all of the revenue space it “gained” in the budget agreement toward that end while the House dedicated dollars toward other purposes, notably measures to promote student mental health.
Another complicating factor was the House’s decision to bring the issue of unemployment compensation for school hourly workers into the conference committee for discussion. That has been a priority of the House majority all session and the provision had been part of their bill to address the unemployment insurance/hero pay issue. The House could not maintain that provision as that bill came out of conference. The House continued to push it and the attempt to insert it into the education conference committee may (let me stress “may”) have been the issue that put agreement out of reach.
It is clearly disappointing. School districts not only lost budget relief through special education cross-subsidy reduction aid (both now and in the future), low property wealth school districts would have seen progress in the tax bill through an increase in the equalizing factor for the Local Option Revenue category (more on that in a future blog entry). Where things go from here is anyone’s guess. This week will probably serve for everyone to decompress before trying to map next steps. As was the case with previous Governors, I doubt Governor Walz would call a special session until there are agreements on all the outstanding budget conference committees. It also has to be pointed out that the Governor can call a special session, but once called, the Legislature is not bound to any time line or set of procedures. Add to that it is an election year for every state office and candidates really aren’t keen on sitting around St. Paul when they would rather be campaigning.
Stay tuned, but in the meantime, tune in to the aforementioned Daryl Hall and John Oates: