Friday, May 9, 2008

Lawmakers wrap up budget bill but wait for global deal

The omnibus supplemental budget bill conference committee wrapped up its work this week, and conferees adopted the budget report. However, the committee co-chairs, Rep. Lyndon Carlson, DFL-Crystal, and Sen. Richard Cohen, DFL-St. Paul, said they would wait to sign the bill while negotiations continue between legislative leaders and the governor. Based on the February forecast, lawmakers were faced with resolving a $935 million budget shortfall. Since then, legislative action, such as the creation of a compensation fund for victims of the Interstate 35W bridge collapse that was signed by the governor this week, pushed that number to about $1 billion. Rep. Carlson said that future changes could be made to the budget bill if necessary.

Included in the bill is a cut for the Minnesota State Colleges and Universities system of $6.6 million, which is in line with the original House and Senate bills. The rider language states that $5 million of the cut is to come from technology and the remaining cut is to come from the Office of the Chancellor budget. With the cut at $6.6 million, the bill specifies that tuition increases will be 2 percent for colleges and 3 percent for universities. There is new money for four areas, which brings the actual cut to the system to $4.08 million. The bill appropriates $900,000 to the Board of Trustees for the Power of You program at Metropolitan State University, Saint Paul College and Minneapolis Community and Technical College. The new language does not include funding for the suburban and rural pilot programs as originally proposed. Also, $120,000 is appropriated for a Teachers of Diverse Backgrounds financial aid pilot program. The program is to be implemented at Winona State University in partnership with the Rochester school district and St. Cloud State University in partnership with the Robbinsdale school district. The pilot program is intended to increase the diversity of teachers in school districts with a significant concentration of minority students and attain the state’s interest in enhancing the academic achievement of diverse student populations.

In addition, $500,000 will fund the elimination of non-resident undergraduate tuition at Alexandria Technical College, Anoka Technical College, Hennepin Technical College and North Hennepin Community College, and $1 million is appropriated to any two-year college that experienced a reduction in reciprocity tuition revenue directly resulting from the elimination of non-resident tuition in the 2007 higher education bill.

In regard to the $11.3 million state grant surplus that had been recommended for multiple uses, such as reducing the student share, reducing the assigned family responsibility and increasing the four-year tuition maximum 3 percent, the decision was to use it toward the living and miscellaneous expense, or LME. That amount is increased $300 per student, from $5,900 to
$6,200 in fiscal year 2009. The bill does leave an unallocated amount of $1.9 million in the state
grant surplus to be used as a cushion or safety net.

Negotiations between legislative leaders and the governor on how to resolve the $935 million budget deficit continue. Gov. Tim Pawlenty has said he is considering his options, including a special session, if he and legislative leaders fail to reach a global agreement before legislators need to adjourn May 19. However, with more than a week remaining in the session, lawmakers continue to remain optimistic that a deal can be reached. Speaker of the House, Margaret Anderson Kelliher, DFL-Minneapolis, said that between $100 million and $150 million is what separates DFL leadership from the governor. Rep. Kelliher said if an agreement is not reached in the next 48 hours, the omnibus supplemental budget bill will need to be sent to the governor by Monday or Tuesday in order for the Legislature to have time to respond to the governor’s action on the bill.

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