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Mendota Heights Legislators Respond to Budget Surplus

A decrease in spending will result in payments to offset school funding shifts.

Legislators received news last week that state economists expect a $323 million surplus from the 2012-2013 biennium.

That will be good news for schools, according to Sen. Jim Metzen (D-South St. Paul) and Rep. Rick Hansen (D-South St. Paul).

were quick to attribute the improved financial picture to conservative fiscal policies passed last year.

The report by the Minnesota Management and Budget attributes most of the state surplus to lower enrollment than anticipated for a Medical Assistance program through the federal Affordable Care Act. That has resulted in decreased spending by the Health and Human Services Department.

Metzen said anecdotally he has seen the economy pick up in the district, in particular among car dealerships. “Unemployment is going down, confidence is up, cars are selling,” said Metzen. “Hopefully it’s going in the right direction.”

State revenue doesn't quite reflect that growth yet, increasing in February by .3 percent, according to the report. A modest bump in projected economic growth for 2012 was forecasted, but the forecast for 2013's growth was tempered slightly.

All but $5 million of the surplus will go to pay off the enacted last year to help balance the state budget. The remaining $5 million will be put into the state’s reserves.

borrowed $14 million total after the shift, up from $12.7 million the year prior. The Legislature increased their per-pupil payments to cover the cost of borrowing due to the shift. 

Prior to 2011's shift, 30 percent of a school’s formula payment was deferred out a year, helping the state to balance the bottom line but forcing many districts to borrow money to cover the gap. As part of last year’s budget deal, that shift was increased to 40 percent.

With the surplus, that shift will shrink to about 36 percent.

Hansen called it a “down payment” on the $2.75 billion in school payments outstanding— “We’ve got a long way to go.”

 

Sen. Jim Metzen

A list of all legislation authored by Sen. Jim Metzen this biennium is available on the Minnesota Legislature's website.

Rep. Rick Hansen

A list of all legislation authored by Rep. Rick Hansen this biennium is available on the Minnesota Legislature's website.

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