Heads spin as MNGOP wants to pay back school debt, DFL preaches fiscal responsibility

Rep. Garofalo: "Paying back the debt to schools is a top priority of Republicans in the legislature."
Rep. Garofalo: "Paying back the debt to schools is a top priority of Republicans in the legislature."

Here's a new one for you -- Republicans want to spend money on public schools. But Democrats, touting the need for fiscal responsibility, oppose the GOP plan.

Today, on a largely party-line 74-56 vote, the House approved a plan to take more than $430 million from budget reserves and use it to make a down payment on the state's debt to school districts. The Senate then approved the plan on another largely party-line 35-28 vote this afternoon.

Rep. Pat Garofalo, R-Farmington and chairman of the House Education Finance Committee, called opponents of the plan "deadbeat Democrats" and said, "when you have cash on hand, the first thing you do is, you pay your debts."

Since November, two more-positive-than-expected budget estimates have shown the state running a surplus of over $1 billion. Most of that money has gone to replenish budget reserves left depleted following The Great Recession.

The MNGOP wants to spend a little less than half that money to repay part of the $2.4 billion owed to Minnesota school districts, but DFLers argue Republicans are draining budget reserves at a time when the state's long-term financial outlook remains murky. They've instead championed a plan that would close corporate tax loopholes, thereby creating a new stream of revenue to pay back the schools without draining budget reserves.

Said House Minority Leader Paul Thissen, DFL-Minneapolis: "Let's not take shortcuts to cover the tracks of our bad decisions."

DFLers have expressed concern about the state having to resort to short-term, high-interest borrowing if budget reserves are again depleted, but Garofalo argues the remaining $600 million cushion should be enough to prevent any borrowing.

"Having money lay around is a lower priority than paying off debt," Garofalo told MinnPost. "Generally accepted accounting principles are that when you have cash, the first thing you do it pay off debt."

The bills approved today are "clean," meaning all policy provisions other than the school payback were removed. Garofalo said stripping the bills of controversial provisions should make it easy for Gov. Dayton to sign his approval.

But Dayton has said he is not in favor of again depleting the state's newly-replenished budget reserves.

"We certainly need to pay back the school shift. But I don't think we should risk the fiscal stability of the state to speed up those payments," Dayton said last month. "I think this is more about politics to make Republicans look good come November."

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