Minnesota schools will be paid an additional $636 million in IOUs at the end of the 2013 fiscal year.
Lawmakers temporarily shaved more than $2 billion in payments to schools in recent years to patch holes in state government’s budget. Much of it has been paid back already, but the outstanding bills still are in the $800 million range.
With the improving state economy, schools are first in line for any excess tax collections. A law passed last spring gave finance officials until Monday to determine how much money was left and therefore earmarked for repaying the schools after the last fiscal year closed on June 30.
Minnesota has now repaid nearly $2.6 billion of the $2.8 billion that was previously borrowed from schools, according to a statement released by the Office of Gov. Mark Dayton.
“Last spring, the DFL legislature and I passed the first responsible state budget in more than a decade,” said Dayton in a statement. “This additional repayment of the state’s debt to our schools marks another step toward a clean fiscal slate, from which we will build a better Minnesota.”
Crosby-Ironton School District superintendent Jamie Skjeveland made clear that there is no impact on revenue and there are no new resources available to provide extra opportunities to students with whatever payments are received.
“All that is presently happening is that the state is now making good on their IOU and providing the cash that the school district should have already had in its checking account months ago,” he said.
Skjeveland added, “We are currently awaiting calculations from the Minnesota Department of Education to determine the amount of cash that will be repaid under the state and property tax shifts.”
Brainerd School District superintendent Steve Razidlo said the district still hasn’t heard what effects the announcement will have on its funds, but officials are “thankful that law provides for repayment” and “thankful for decreased cost of borrowing.”
Pierz School District business manager Earl Athman said he isn’t sure yet how much will be paid back to the district, but that’s because it wasn’t “that big of an issue” for the district.
That’s because officials had enough fund balance and cash flow with which to work, Athman said.
Minnesota Education Commissioner Brenda Casselliuss said in a statement, “Paying back the school shift — in addition to funding for early childhood and all day K, investing in 3rd grade literacy, and raising standards and improving tests — is part of our overall commitment to creating a strong foundation so that all of Minnesota’s students and schools can thrive and succeed.”
The Associated Press contributed to this report.