The Snow Got My Computer! I apologize for not blogging last week after the Legislature shut down starting on Wednesday morning and cancelling committee hearings and floor sessions for the rest of the week. The time off that was taken is really going to require things to be ramped up in terms of committee time between tomorrow (Monday, February 27) and the first policy committee deadline (Friday, March 10). Night meetings have been scheduled for this week by a number of committees, part of it to catch up on what was left hanging by the blizzard and part of it to deal with the massive number of bills that are just getting in line. I will keep you posted because things will be moving.
Equalization Bills Heard in the House Education Finance Committee. The House Education Finance Committee largely dedicated its Tuesday, February 21, hearing to four bills where there is an interface between the education funding system and Minnesota’s property tax framework. Two bills deal directly with the equalization issue and seek to dramatically increase equalizing factors. The first was Representative Hemmingsen-Jaeger’s HF 1396 that would lower the eligibility threshold for the debt service equalization program to 10% and increase the equalizing factor to 100% of the statewide average adjusted net tax capacity. Currently, about 30 districts qualify to receive debt service equalization and the total cost of the program is approximately $19 million in property tax relief. Under HF 1396, approximately 100 districts would qualify and the amount of property tax relief would rise to approximately $60 million. South Washington County Director of Finance and Operations Dan Pyan provided strong testimony in favor of the bill.
That was followed by Representative Youakim’s HF 1271 that would increase the first tier referendum equalizing factor from $567,000 of referendum market value per resident pupil unit to 150% of the statewide average referendum market value per resident pupil unit. The cost of the bill would be approximately $85 million for current referendum with an additional amount in the forecast for an expected increase in the number of districts with operating levies. The forecast amount is a very squishy number. Buffalo-Hanover-Montrose Superintendent Scott Thielman testified in favor of the bill and its importance to low property wealth school districts.
The committee then turned to HF 879, another bill authored by Representative Youakim. This bill would add an additional $116 per pupil unit to the current level of Local Option Revenue to bring it to $840 per pupil unit. The bill would also simplify the Local Option Revenue framework to a single tier equalized at a much higher rate to keep the total levy at the same level it is at currently. St. Michael-Albertville Superintendent Ann Marie Foucault provided testimony in favor of the bill.
The final bill where the education funding system and the property tax system come together was Representative Pursell’s HF 1457. This bill would expand eligibility for Long Term Facilities Maintenance to cooperative facilities throughout rural Minnesota. This bill has been discussed for the past few years and has actually passed both legislative bodies, but it has never survived the conference committee process to make it into law.
All four of these bills were re-referred to the House Property Tax Subcommittee where they will be discussed and a determination will be made as to whether they can fit into a broader property tax relief framework. The possibility also exists that they could be sent back to education and made part of the omnibus education funding bill, but with so much money likely being directed to the basic formula and the special education cross-subsidy, finding room in that target will be extremely difficult.
House (Monday, February 20)
Senate (Monday, February 20)
House (Tuesday, February 21)
Senate (Tuesday, February 21)