Legislative update from Rep. Denny McNamara

Representative Denny McNamara (R) District 57B

Representative Denny McNamara (R) District 57B

By Rep. Denny McNamara, 3/15/2012

Hello from the State Capitol,

This week, the House majority unveiled a plan that will interest Republicans and Democrats alike, as it will repay in full the amount of the additional school shift that was signed into law last summer in order to help balance the budget.

When we talk about the 60/40 school shift, this means schools receive 60 percent of their expected revenue during the current biennium, and 40 percent the next biennium. Historically, the shift has been 90/10, but two years ago the previous legislative leadership made the choice to enact a 70/30 split as a way to eliminate a deficit.

Along with the school shift, the Legislature also reduced spending and enacted dozens of reforms that some have said could save us billions of dollars in future budgets. Some of that projection has already come to fruition. With an $876 million budget surplus in November, and another $323 million at the end of February, Minnesota’s budget has gone from a $5.1 billion deficit to a $1.2 billion surplus in less than a year.

While most of the surplus was used to refill rainy day accounts and budget reserves, $318 million of the most recent windfall was used to pay back the school shift, creating what is now a 64.3/35.7 split.

Because we now have $1 billion on hand thanks to this budget surplus, it’s time to continue paying back what we owe without destroying our budget reserves.

This new plan would take $430 million from cash reserves and allow us to pay back the remaining $400 million borrowed from last session, while beginning to pay back some of the borrowing from the previous biennium.

I have heard from several folks who said they were disappointed we borrowed money from the schools last session. This would more than pay back the entire amount borrowed last year.

This school payback legislation is scheduled to be voted on the House Floor as early as today. I truly expect overwhelming bipartisan support, as both parties have made the school shift a significant talking point over the past few months.

Keep in touch,

Representative Denny McNamara
Dist. 57B
Chair of the Committee on Environment, Energy
and Natural Resources Policy and Finance
375 State Office Building
100 Rev.Dr. Martin Luther King Jr. Blvd.
St. Paul, Mn. 55155-1298
Phone (651) 296-3135

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