House and Senate GOP agree on deal to start paying back K12 shift

A joint House/Senate Conference Committee has agreed to use $430 million from the state’s budget reserves to start paying back a payment delay to K12 schools. A spokesman for the House GOP Caucus said the conference committee wrapped up the report tonight after the House agreed to drop policy provisions in the bill.

“We want to make it as easy as possible for Governor Dayton to sign this bill,” Rep. Pat Garofalo, R-Farmington, said in a statement. “Removing the LIFO (Last In First Out) provisions from the House File and the policy from the Senate File will give him a clean bill to repay the shift that he can sign.”

Republicans have been eager to start paying back a school shift plan that was used in July to erase part of the state’s $5 billion budget deficit. The state will still owe roughly $2 billion to K12 schools if the plan is enacted into law.

Gov. Dayton and Management and Budget Commissioner Jim Schowalter have criticized the plan to tap the budget reserve to start paying back the school shift. Schowalter has said that tapping the budget reserve could lead to cash flow problems for the state in the coming months.

MMB released a cash flow report that showed the state could have difficulty paying its bills in September and October even if Gov. Dayton vetoes the Republican legislation to tap the budget reserves.

The House and Senate would have to each pass the conference committee report before it heads to Gov. Dayton.

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