First Post-Agreement Offer Presented. The E-12 conference committee met this morning and heard testimony on a variety of programs aimed at closing the achievement and opportunity gaps that exist in Minnesota schools. After those presentations, the discussion turned to the budget agreement announced this morning by the Governor and legislative leadership that calls for $4 billion in tax cuts, $ 4 billion in new spending, and $4 billion being rolled into the next biennium as a cushion in the event there is an economic downturn. These spending and tax cuts figures are spread over three years and the budget target for the E-12 conference committee is $1 billion, which entails $320 million for the coming fiscal year (the 2022-2023 school year) and $680 million for the next biennium. There was some verbal wrangling over who was going to present offers first (the Senate had sent an offer late last week, but that was before the global budget agreement and the House did not respond). The House indicated they had sent an offer to the Senate late Sunday evening and were hoping that the Senate would have likewise have something to present this morning. That was not the case and the House did not make its offer public until this afternoon.
It is important to note the the HF 4300 as it passed the House floor contained $1.3 billion for the coming school year and an additional $2.2 billion in the next biennium. Given the new target as outlined in the budget agreement, that means the House will have to reduce their proposed spending by approximately 75%. By contrast, the Senate, which had $30 million in its version of the omnibus bill will get to increase spending on their priorities by 967%. The reductions in their initial proposal that the House has put forward in their offer are highlighted in yellow. As one can see, one of the top priorities of the education community–reduction in the special education cross-subsidy–has been reduced dramatically as have a number of other programs featured in the final House bill.
It is unclear when the Senate will present a counter offer. No firm time has been announced for a Tuesday meeting, but seeing that the Senate will probably not want to waste the opportunity to hold the gavel, I would expect there will be a meeting at some point tomorrow.
Tax Conference Committee Begins Its Work. With the presence of the increased equalization of the local option revenue in the House bill, I am also following the tax conference committee very closely. The committee met this evening and went through a comparison of the two competing versions of the tax bill and the spead sheets that provide the financial description of the provisions in each bill. It is difficult to tell at this juncture what the fate of the increased equalization provision will be, given the high priority placed on reducing the tax on Social Security and the simplification and expansion of the renters’ credit, but push we must. At the very least, our efforts have put equalization on the map in the tax committee and hopefully this will make equalization policy a staple in future property tax relief and reform discussions. Thanks to all who have contacted their legislators and the conferees regarding this issue.