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Rep. Brita Sailer, DFL-Park Rapids, tells regional teachers Saturday morning that very few people who rely on state funding will be happy this session as the Legislature struggles with a deep budget deficit. She and three other legislators spoke at an Education Minnesota Eggs and Issues breakfast in Bemidji. Staff photo by Brad Swenson

Lawmakers warn deepening recession could impact education

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With a deepening recession, don't expect the Minnesota Legislature to suddenly find money to protect any one budget area, local legislators told a group of teachers Saturday morning.

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"How do we get the message back to everybody?" Rep. Brita Sailer, DFL-Park Rapids, asked about 20 teachers from throughout the region who attended an Education Minnesota Eggs and Issues breakfast in Bemidji.

They expressed concern not only over more state funding for K-12 education -- to counter local operating levy referendums that don't often pass -- but also over ever-increasing health care insurance premiums, which they say is out of whack with other government workers.

"We hate to talk doom and gloom," Sailer said, "but we need to face up to reality. At the same time we lost 200,000 jobs in Minnesota, those are people not paying taxes and will need additional services we can't afford. It's a widespread avalanche."

Sailer was joined by Rep. John Persell, DFL-Bemidji, and Sens. Mary Olson, DFL-Bemidji, and Rod Skoe, DFL-Clearbrook. Teachers came from Bemidji, Cass Lake, Park Rapids, Bagley, Walker, Pequot Lakes, Deer River and Laporte.

The teachers want to see more money for classrooms, relief from skyrocketing insurance premiums and fair pay but not performance pay such as Gov. Tim Pawlenty's "Q-Comp" program.

"We need to partner with constituencies and start with honesty and transparency," Olson said. "Legislators can't continue to tell people what they want to hear. There will be no new revenues and we can't raise spending,"

Pawlenty hinted last week that his two-year state budget to be released Tuesday will include no new tax increases and very little in fee hikes.

"We're very anxious to see the governor's budget and how he's going to do that," Olson said. "We hope there will be some money in the federal stimulus package."

It will be hard to protect areas of the budget, since the deficit is so deep, Skoe said, adding that public schools education amounts to half the state budget spending.

Even if the state did raise revenues, say by extending the state's sales tax to clothing, that would only raise $700 million for the biennium, he said. "There still would be more than $4 billion in cuts to be made. That's an extraordinary challenge to find our way through this without significantly changing our quality of life as Minnesotans want it."

Skoe said Pawlenty "did a disservice" in his State of the State address by not outlining the budget challenges severely enough and by taking tax increases off the table.

For K-12 education, Skoe said, the governor proposed paying school districts for results by increasing funding up to 2 percent more for students meeting standards, and expanding Q-Comp statewide by providing a 5 percent increase for those schools that join.

Given the budget parameters the governor also laid down, "it's not a viable option."

Not all school districts are the same, with some having more students in poverty than others, which affects learning, said Kim Goodwin, a Bemidji High School physical education teacher.

"You can't put out the best product if you don't get to choose the raw materials," she said. "Using my paycheck is not the place to be. You cannot attach a paycheck to what my product looks like."

Olson agreed, saying the state Q-Comp program is like the federal No Child Left Behind Act in that they both operate with one-size-fits-all standards that can't be met uniformly.

"Teaching is not a business," she said. "It doesn't work by superimposing a business model over them."

"We're at a turning point here," said Persell, in his first term in the House. "The next 20 years won't look like the last 20 years. We're looking for outcomes from all these state agencies. We can be more efficient as state government."

Government must conduct its business differently, he said. "We can solve our problems, but not the way we've been doing it ... We'll make it happen, but no one will like all they will see."

Rising health care premiums also hits rural school districts hard, said Bruce Larson, who teaches in the Walker-Akeley-Hackensack School District.

Because of fewer teachers and the high cost of family insurance, only single teachers are taking school district-provided health insurance, and the day will come when the school district won't offer health insurance at all, Larson said.

The district's carrier as of this month boosted family coverage to $1,407 a month, he said, while single coverage is $400 a month.

"Think of taking $1,400 out of your paycheck per month," Larson said. "That money isn't going to our local economy -- it's going into insurers. ... We are the most hard hit for health insurance benefits."

Education Minnesota supported last session an effort to create a statewide health insurance pool for school districts, a bill that won House and Senate bipartisan approval only to be vetoed by Pawlenty.

The teachers' union will try again this year, but Olson said reform needs to be broader, and she intents to reintroduce her bill calling for a statewide health insurance pool that anyone could join.

A statewide pool that involves school districts would allow, over time, a leveling of premiums, she said. Plus, a self-insured pool would cut middleman costs.

But such a bill "will have the insurance/managed health care industry strenuously against it," Olson said. "They believe it pulls the system one step closer to universal health care and would remove them from the mix."

But 20 to 30 percent of health care costs come from the current administration of health care, and a pool would cut costs. "It will take a grass-roots movement by the people to change the system," she said.

Containing health care costs is important, Skoe said, while adjusting premiums just shifts costs around. He told of a recent budget trends study that shows state revenues projected to climb 3.9 percent in the next 10 years but expenses will go at a 5.2 percent clip.

"Of that, 8.5 percent is health care increases," Skoe said, saying the situation calls for structural reform.

"If the federal government really wanted to do economic stimulus, why don't they fix the health care problem," Skoe said.

"I'll be an advocate for health care reform," Persell said. "The key word is advocate. It will be a PR battle. Be prepared to be vocal about it."

If federal stimulus money comes to the state, it will need to be invested across the board, Sailer said. "Courts-schools-MnDOT -- all will be looking and it is their jobs that their departments function well. It is vital that we keep all of our services."

No matter how tight the budget, however, "kids still have to keep learning,' Sailer said. She plans to reintroduced her bill to help school districts with energy costs, allowing them to use money now spent on the classroom.

Olson said her first bill this session will try again Skoe's effort to put season-recreational properties back on local tax rolls. Currently, those properties aren't taxed for local operating referendums, a reason many issues get voted down.

Olson said her bill would replace those properties' taxes that now go to the state general fund with higher commercial/industrial taxes.

"In some areas, such as Pequot Lakes, 70 percent of the property is off the rolls" because they are summer cabins, Olson said. "That really affects our area as the rest have to pay full bore."

The increase to commercial properties would be small, she said, and "it is important to those businesses to have a well-educated workforce."

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