Good morning and welcome to Thursday, the first day of September. 

As Minnesota students head back to school, education is returning as a big political issue.MPR’s Brian Bakst reports sagging test scores, debate over classroom curriculum and budget squeezes in many districts are all getting attention from candidates and voters. That’s true in races up and down the ballot – from governor to the Legislature and even state auditor. Approaches to education – whether money or policy – are vastly different among the candidates in the state’s top races. DFL Gov. Tim Walz launched a television ad this week reminding voters of his time as a teacher and his push to ramp up aid to schools – or in the ad’s language, he fought to “fully fund our schools.” The spot takes a swipe at Republican challenger Scott Jensen for questioning whether more money is needed, using a snippet from an interview where he compared education to a “black hole.” Jensen, a former state legislator and past school board member, pushed back on the characterization. “We just gave one of the biggest chunks of money to K through 12 in the history of Minnesota. And evidently we're not fully funded. What does that mean? Is there some threshold and until we get to that we're not fully funded? Or when we do get to that? Does that threshold change?” Jensen asked. “We've got to raise achievement and stop thinking that dollars are always going to get us where we have to go.”

A new audit finds the Department of Human Services didn’t adequately oversee tens of millions of dollars in grants designed to counter homelessness. The Star Tribune reports: The financial audit by the state's top government watchdog found significant weaknesses in the agency's internal controls, as well as violations of the state's legal requirements in the management of grants by two divisions within the agency. Over the past three years, the Department of Human Services (DHS) has doled out more than $130 million in grants to local governments and nonprofits to support people who are homeless, mentally ill, receiving public assistance, or who are runaway youth and possibly at risk of sexual exploitation. In a statement Wednesday, DHS Commissioner Jodi Harpstead said it was important to consider the report's findings in the context of the urgent pressures her agency faced during the pandemic to assist people in need.

House Republicans responded to the report: “Waste, fraud, and abuse have plagued DHS programs for years, and once again an audit has found that the Walz administration failed to protect taxpayer dollars,” said Rep. Anne Neu Brindley,R-North Branch, in a statement. “During the pandemic, DHS oversaw hundreds of millions of COVID relief dollars but they did not effectively manage grant distribution or comply with all legal requirements. Minnesotans expect DHS to be a better steward of their taxpayer dollars and once again the department fell short.”

Theo Keith at Fox 9 reports: key lawmakers in both political parties and Gov. Tim Walz say they support eliminating state income tax liability on federal student loan forgiveness. Unless lawmakers act, Minnesota will treat debt relief as taxable income because state law is out of step with federal tax changes. On $10,000 of loan forgiveness, state income tax would be at least $535, higher if the person would see reduced credits or deductions because of the increase in taxable income. 

Tom Hauser at KSTP reports:A coalition of 17 organizations representing cities, counties and school districts across the state sent a letter this month to Gov. Tim Walz and legislative leaders making a last-ditch plea for a special session. The state is sitting on billions of dollars in surplus money the organizations say is urgently needed to address a wide variety of needs. “We can provide many examples of pressing local needs,” the letter says. “Generally, they include labor shortages that hinder the provision of public safety services including police and fire staffing, rapidly escalating costs to provide local services, social services, and the education of Minnesota’s students.” The letter, signed by organizations ranging from the Association of Metropolitan School Districts to the Coalition of Greater Minnesota Cities and the North Metro Mayors Association, says those issues need immediate attention.

John Croman at KARE reports: the Minnesota Pollution Control Agency Wednesday pushed back against the notion that this state's drivers won't be able to buy new gasoline-powered cars 12 years from now.   Regulators say Minnesota's Clean Car Rules won't automatically force the state to adopt the ban recently enacted in California. "Minnesota’s clean car standards will remain in effect through model year 2025, which generally starts on Jan. 2, 2024, and ends when model year 2025 vehicles are no longer being sold as new vehicles," the MPCA statement read. "If we don’t conduct another rulemaking, then the federal standards will apply for new vehicles sold in Minnesota starting with model year 2026." The agency said the Clean Car Rules were adopted in anticipation that the California standards would rise until 2025 and remain on a plateau until 2034. But, because California adopted tougher standards last week, Minnesota's new rules will only be in effect for model year 2025. Scott Lambert, executive director of the Minnesota Auto Dealers Association, said he disagrees with MPCA's reading of how the California ban will impact Minnesota. "The governor and the state cannot pick pieces of the rule they want to enforce and pieces they don't," Lambert told KARE 11. 

In news elsewhere, Democrat Mary Peltola won the special election for Alaska’s only U.S. House seat on Wednesday, besting a field that included Republican Sarah Palin, who was seeking a political comeback in the state where she was once governor. The Associated Press reports Peltola, who is Yup’ik and turned 49 on Wednesday, will become the first Alaska Native to serve in the House and the first woman to hold the seat. She will serve the remaining months of the late Republican U.S. Rep. Don Young’s term. Young held the seat for 49 years before his death in March. Peltola will be the first Democrat to hold the seat since the late U.S. Rep. Nick Begich, who was seeking reelection in 1972 when his plane disappeared. Begich was later declared dead and Young in 1973 was elected to the seat. Peltola ran as a coalition builder while her two Republican opponents — Palin and Begich’s grandson, also named Nick Begich — at times went after each other. Palin also railed against the ranked voting system, which was instituted by Alaska voters. All three — Peltola, Palin and Begich — are candidates in the November general election, seeking a two-year term that would start in January.