'School Shift'

'School Shift' A risky budget game only banks can win. Background "School Shift" Consequences Lawmakers couldn't decide The new state budget allocates $14 billion for K-12 education. Schools are scrambling to cover the shortfall. Many will be forced to ask big corporate banks for whether to raise revenue or cut spending in the state budget, so they did neither. But only 60% of the money will be paid on time – politicians short-term loans. To fill a $700 million gap they used an accounting like this because it makes the Schools pay expensive fees and interest rates on these loans from banks like Wells Fargo state budget appear balanced. trick called the “school shift" in risky, unprecedented ways. The unpaid amount is "shifted" forward and added onto the and U.S. Bank. budget for future years. BANKS WIN. MINNESOTA LOSES IN THIS BUDGET GAME. St. Paul will get hit by $450,000 in financing costs on school borrowing. Minnesota's debt rating Minneapolis needs to find has been downgraded to “negative." $35 million of funding for schools. 40% $700 ??? MILLION Share of state funding that will NOT be paid to schools this year. Funding gap created by "shifting" 40% of school payments this year. How much schools will pay in fees and interest on loans from big corporate banks like Wells Fargo and U.S. Bank. 90% 1,100 Minnesotans $1.4 billion already owed from shifts Historically have told the share of 60% Wells Fargo & U.S. Bank school funding paid under commitment paid within the school year. $2.1 billion DON’T PROFIT the new from either big bank FROM SCHOOLS state budget total amount now owed to schools from all shifts References - htp:/startribune.com http://minnesota.publicradio.org bloesotabudgetbites.org http://mncounties.org facebook.com/FairMN @FairMN mnfaireconomy.org