Koering's amendment fails in Senate

Sen. Paul Koering, R-Fort Ripley, pointed to the influence of the state's teachers' union as he recounted Friday's defeat of his amendment to quash school boards' abilities to levy the cost of teacher retiree benefits onto local property taxes.

"I knew it was an uphill battle," he said Monday of his failed amendment to the Senate tax bill that passed Friday. "Education Minnesota has got so much power over a lot of legislators that it's bordering on the ridiculous."

The vote on Koering's failed amendment to repeal the 2008 legislation was 22 "yes" and 44 "no." Votes largely followed party lines with only one DFLer supporting the Koering amendment.

In certain districts, Koering said, legislators are fearful to oppose Education Minnesota.

"That's why this legislation, I believe, was snuck into the (2008) tax bill," he said.

The 2008 legislation was the impetus for this month's Brainerd School Board Finance Committee recommendation to call for the sale of $23 million in bonds to fund Other Post-Employment Benefits liabilities onto the local property tax levy for 13 years without voter approval. The Brainerd School Board is expected to vote on the finance panel's recommendation on May 11.

Koering said he is holding out hope that a House amendment that would allow school districts to only levy for retiree benefits with voter approval might survive the conference committee. Koering's amendment would have nullified any potential action by the Brainerd School Board to increase property taxes for Other Post-Employment Benefits.

Molly Kurtzman, chair of the Brainerd School Board Finance Committee, said placing the burden on property taxes is the best available alternative, even though the board doesn't like to add to the tax burden. Not taking this action, she said, would take money away from the classrooms as education revenue shrinks.

"It's not like a fun decision," she said. "It's a horrible decision to make, but look at the options."

Kurtzman said the benefits being discussed are previously agreed upon contractual agreements. She said a different approach is likely in future negotiations.

"Going forward we have to make some changes," she said. "Everybody understands we have to do a much better job in those areas."

Brainerd School District Superintendent Steve Razidlo said he understands Koering's stance against taxation but believes bonding for OPEB would provide the highest quality of education possible to the students in the senator's constituency and would bring more stability and security to school programs.

The finance committee's recommendation, Razidlo said, was not done easily and was not done without a lot of concern. The Brainerd School District has been in a cutting mode for five years, he said. It has made $5.5 million in cuts and is down 100 teachers.

"No one wants to raise taxes for taxes' sake," he said.

Razidlo said he wished Koering would engage in a meaningful discussion with the district about the difficulties public schools face and the state's role in providing equitable school funding.

"This district doesn't have a whole lot left to cut," he said.

Sen. Tom Bakk, the Senate Tax Committee chair, said Monday the choice is up to school boards but that Senate members seemed to think that it made more sense to spread the cost of benefits out over a period of time.

Koering and Sen. Mary Olson, DFL-Bemidji, voted against the Senate tax bill that passed 35-31 Friday.

"To me, at this time, with the economy the way it is, the notion of raising taxes on everybody is just bad economics," Koering said. "The party that's in charge - that's all they know. No, I don't think raising taxes is the solution to the problem. It just doesn't make sense to me. I'm just a farm boy from St. Mathias, but even I know that doesn't work." Bakk, a DFLer from Cook who is running for governor in 2010, said his bill raises taxes by $2.2 billion by rolling back to 1998 rates. Those rates, he said preceded income tax cuts that came in 1999 and 2000. He said the Senate bill relies roughly on one-third federal stimulus money, one-third spending cuts and one-third new revenue.

Bakk criticized Pawlenty's budget plan that would involve a school aid payment shift and using tobacco appropriation bonds to fix the immediate deficit. The tax chair said Pawlenty's plan cuts local government aid and doesn't fix the structural deficit that will come back to haunt lawmakers.

"I think that's just irresponsible to hand that off to the next governor," he said.

Bakk said the conference committee, made up of House and Senate lawmakers, should begin negotiations Tuesday.

MIKE O'ROURKE may be reached at mike.orourke@brainerddispatch.com or 855-5860.