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Published May 17, 2010, 05:40 PM

How Budget Plan Will Affect MN Cities and Schools

Minnesota cities will have to deal with a decrease in state aid this year, and schools will have some of their payments delayed.

Minnesota cities will have to deal with a decrease in state aid this year, and schools will have some of their payments delayed. Those were both included in a bill Minnesota legislators approved this morning.

After dozens of hours of debating and a short special session, Minnesota legislators adjourned for the year. This morning they approved a bill to balance the state budget and erase a three billion dollar deficit.

Gov. Tim Pawlenty says, "I am pleased to announce that we have reached a bipartisan agreement with the DFL leadership to bring the legislative session to a productive and good conclusion for the people of Minnesota."

The plan to cut three billion dollars delays nearly two billion dollars in payments to Minnesota schools. That's on top of the money that's already been delayed.

East Grand Forks School Superintendent David Pace says, "This year we had to borrow 1.9 million dollars, so we're probably going to be looking at borrowing two million dollars over the fiscal year because of the delay in payments."

Pace says there is some good news though: the money will be paid back.

Pace says, "So we don't have to worry at the end of the fiscal year that the dollars that were shifted we would lose. That would have been a potential 1.8 million dollar reduction in funding."

Minnesota towns won't be quite as lucky. The state approved spending cuts that won't be paid back, including cuts already made by Governor Pawlenty that the court struck down. Lawmakers also agreed to the supplemental bill that will cut even more aid to Minnesota towns this year…around 200 thousand dollars to East Grand Forks.

East Grand Forks City Administrator Scott Huizenga: "In total since unallottments began the City of East Grand Forks has been affected to the tune of just over a million dollars."

Huizenga also points out that lawmakers will have to look at making more cuts in the future to balance the budget.

"They'll have anywhere from they're saying five, possibly as high as an 8 billion dollar deficit again, so it's a safe assumption that we'll be back in the same boat next year,” says Huizenga.

Many of the lawmakers who voted against the budget plan say it does little to solve structural problems that will lead to even bigger state deficits in future years. House members passed the bill on a bipartisan vote of 97 to 32 with a few Democrats and Republicans voting no. The Senate passed it 52 to 14.

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