The problem: It will cost $1.7 billion over six years in a time when the state faces a budget deficit next year of $500 million to $1.5 billion, without inflation figured into it.

It would mean raising taxes, DFLers said.

“I’m always pragmatic and you always want to know where the money comes from,” state Rep. Denise Dittrich, DFL-Champlin, vice chairwoman of the House E-12 Education Committee, said Tuesday.

A bipartisan legislative panel worked up a bill late last session and is taking it around the state for public input. Formal public hearings were held Monday night in Thief River Falls and Tuesday night at Nashwauk.

They had lunch noon Tuesday at Bemidji High School, and took the opportunity to exchange thoughts on the bill with about 40 local educators, education administrators, local government officials and citizens in an informal setting.

The bill would equalize funding throughout the state by setting a uniform per pupil rate of $7,50o and in having the state buyout operating levies up to $500 per student. And it would treat all students —regardless of grade level — as 1.0 in any funding allocation formula.

The levy buyout alone would take $600 million from property taxes, shifting that to the state, said Rep. Mindy Greiling, DFL-Roseville, chairwoman of the House K-12 Finance Division.

Dittrich noted that the 2008 Legislature faced a $1 billion budget deficit yet still found a way to pass a $6.6 billion transportation package — over Gov. Tim Pawlenty’s veto — and found an additional $51 per student in education funding, property tax relief and the beginnings of health care reform.

“Those four things did not happen with all of us rising up and saying, ‘It can’t be done because there isn’t enough funding because we have a deficit, so we’ll just go home and bury our heads,’” she said. “You still have to vision. You still have to talk about the needs.”

In the Legislature, Dittrich said, “priorities do rise to the top, but it comes through a lot of discussion and a very, very, very long process,”

Bemidji School Board member John Pugleasa, who also heads the Beltrami Service Collaborative, warned however of the danger of taking money from one of his partners to fund another, for instance taking health care funds to add to education funding.

“If it comes from something else that directly impacts the students that come to our school, directly impacts our partners, that makes it harder,” he said. “It makes my life easier (as a School Board member) but it doesn’t necessarily make life easier for the people who interact with us along many points of the continuum.”

Greiling agreed, saying a way must be found to increase the state’s investment in education funding but not at the expense of health care to children.

“I would never want to cut the health care system,” Greiling said, adding to that the Children’s Mental Health Initiative which was raised earlier. “I don’t think we in good conscious want to talk about cutting those things.”

When it gets down to brass tacks in the Legislature, she said, “everyone is for education, everyone is for fixing the formula, everyone is for adequacy and equity, and some want to take it from other things and some don’t. That is the discussion the Legislature will need the courage to have.”

By having the state buy up levies up to $500, and perhaps putting a cap on the wealthier districts to prevent them from levying more, Greiling said all the state’s school districts can rise or fall together, offering a unified front to lawmakers for more state money.

That will also mean raising state taxes, Greiling said in an interview, when told that protecting education and human services from cuts puts about 80 percent of the state budget off limits.

In the last 20 years, the price of government — the cost of all government versus personal income — has gone from 17 percent to 15 percent, she said. “So we’re not investing as much of a proportion of our state wealth as we did 20 years ago, and that’s what we have to address.”

Paying for education and health care means increasing the state budget, Greiling said. “We have to stop pretending schools can be funded on the cheap. If we going to keep de-vesting in our state, then we are going to end up like Alabama and Georgia.”

Minnesota has always done the best, she said., under both Republican and Democratic governors. Incomes doubled after World War II when investments were made in education.

She knows that Pawlenty will seek accountability, and Greiling says it is a part of the bill, H.F. 4178. A unique provision provides innovation revenue, requiring school districts to use at least 1.5 percent of basic revenue for innovative programs including peer-reviewed, research-based measures to improve academic performance.

In opposition to federal No Child Left Behind provisions which still must be followed, the state provision would create new tests to measure a student’s individual progress and not how a group or grade rates, she said.

The Minnesota Chamber of Commerce supports that provision as providing education funding accountability, she said.

Former Gov. Jesse Ventura characterized per pupil money as throwing money down a black hole, something which Greiling deeply disputes.

“We obviously did not study economics,.” Greiling said, “or he would know that the educated workforce is what moves our economy in Minnesota. What he did … was put in benefits for people like himself. He took off license tab fees for luxury cars like he owns, and he lowered the top tier income tax to the point where wealthy people like himself — people who earn half a million dollars or more per year — pay less than the middle class.

“That’s not Christian,” Greiling said.

Should the education finance reform bill become law, Bemidji School District’s current baseline general education monies, without a referendum, at $36.4 million, would rise 25.2 percent to $45.57 million.

Highlights of the bill include:

-- Sets basic per pupil formula high enough to cover districts’ basic instructional needs while having other component formulas match specific additional needs. It would increase that formula from $5,124 to $7,500 per student.

-- Indexes basic formula allowance to the rate of inflation as measured by the GDP implicit price deflator for state and local services, about 3 percent today.

-- Fully funds state’s share of special education costs.

-- Restores equalization in school property tax system.

-- All students counted as 1.0 in pupil weighting.

-- Provides additional funding to schools that serve students from low socio-economic backgrounds, expands student eligibility for free and reduced price lunches, an indicator of poverty.

-- Offsets $500 per pupil of each district’s referendum revenue and adds $500 per pupil to each district’s general education revenue.