Tax Revenue

Minnesota raked in $100 million more in tax collections in February and March than State forecasters had predicted. The Minnesota Management and Budget Department said the additional revenue topped projections by 4.6 percent. Minnesota brought in nearly $2.3 billion in various taxes and fees in those two months. Every major tax area except sales taxes exceeded projections.

The quarterly update won’t change legislative budget discussions because lawmakers are working off a February, 2015 comprehensive forecast showing a $1.9 billion anticipated surplus. The report released this week looks only at State revenues and not expenses.

MMB economists highlighted a consumer boost from low oil prices as one reason for the increased revenues. Minnesotans could spend $2 billion less on gas in 2015 than in 2014, an average savings of $900 per household.

Transportation

The House Transportation Committee approved a $7 billion transportation funding bill on Monday. The bill shifts existing taxes to a new transportation fund and borrows billions more over the coming years to pay for road and bridge projects. Committee Chair Rep. Tim Kelly (R-Red Wing) said the House strategy avoids raising taxes on gasoline, as Gov. Mark Dayton and Senate Democrats are proposing.

The House bill moves the proceeds from the sales tax on auto parts, lease vehicle rental tax, and tax on rental cars into the transportation stability fund instead of going into the general fund.

Rep. Frank Hornstein (DFL- Minneapolis) said that the bill relies too much on moving money from one pot to another. The House bill also provides much less for mass transit than the Governor’s plan, which would boost the sales tax in the metro area to fund transit projects. Rep. Hornstein did successfully amend the bill to increase the fine for texting while driving to nearly $300 for a second offense.

MNsure

MNsure’s board is struggling with whether to prioritize fixes to the website where customers can buy private health insurance, or to the software running public health programs such as Medical Assistance.

On Wednesday, the board approved a proposal to develop tools so MNsure customers could shop for health plans on third-party websites and even enroll in plans there.

But Minnesota Human Services Commissioner Lucinda Jesson, a member of the MNsure board, questioned the investment. MNsure’s technology runs the site where people can shop for private health plans, but also helps manage the hundreds of thousands of people on public programs such as Medical Assistance and MinnesotaCare.

MNsure last year focused on fixing the website, which had high-profile failures in its 2013-2014 debut. The website worked better in the most recent enrollment period, but county caseworkers are still struggling with problems using MNsure software to manage public programs. With all those problems, Jesson said, adding new tasks for MNsure’s IT staff wasn’t wise.

But board members overrode her concerns, approving the plan 5-2.

It would take about 360 work hours to finish the first part of the project and an uncertain amount of time for later elements, MN.IT officials said.

House Omnibus Health and Human Services Finance Bill

Republicans in the Minnesota House unveiled their omnibus health and human services budget bill on Thursday. The bill proposes cuts of about $1 billion over the next two years, money Republicans want to use to help pay for tax cuts.

The bill ends MinnesotaCare, shifts payments to insurance companies to future years, cuts Human Services Department spending, and adds funding for nursing homes. The bill’s sponsor, Health and Human Services Finance Committee Chair Matt Dean (R-Dellwood) says it’s designed to increase access to health care in the State.

Gov. Dayton has proposed increasing spending for health and human services by about $284 million over the next two years.

House Democrats said that it makes no sense to eliminate MinnesotaCare when the State has a budget surplus. Rep. Dean’s bill would require MinnesotaCare enrollees to buy a plan on MNsure. Under Dean’s plan, MinnesotaCare enrollees would be eligible for tax credits to purchase private coverage through MNsure. Proponents of the current program worry people will end up paying more.

The bill also directs the Commissioner of Human Services to find $100 million in savings in administrative costs associated with medical assistance for this biennium. The bill delays $135 million in payments to insurance companies that handle special needs patients into the next biennium.

New spending includes $138 million over two years for nursing homes. The nursing home industry has maintained that rates have not kept up with services. The bill also provides a one-time, 5 percent cost of living adjustment for home-based care workers and restores funding for the Medical Assistance for Employed Persons with Disabilities Program to reduce their premium payments.

Sunday Liquor Sales

The Minnesota Senate voted Thursday 35-28 to keep in place the State’s longtime ban on Sunday liquor sales.

Sen. Susan Kent (DFL-Woodbury) proposed the amendment to the omnibus liquor bill to allow stores the option of opening on Sundays. Her amendment addressed a concern raised by the Teamsters Union by prohibiting deliveries to liquor stores on Sundays. Sen Kent sees no legitimate public policy purpose for continuing the ban on Sunday sales. Opponents of the amendment raised concerns about how the change would affect small liquor stores.

Senators passed the larger liquor bill on 51-11 vote. It allows for small brewers and brew pubs to sell beer growlers on Sunday and permits an earlier Sunday opening time for bars.

The House has not yet voted on its omnibus liquor bill. House Speaker Kurt Daudt (R-Crown) guaranteed a Sunday sales amendment will come up, and predicted it has a 50-50 chance of passage.

Broadband

Many rural Minnesotans lack access to high-speed Internet. However, House Republicans left broadband development assistance money out of their budget.

The Coalition of Greater Minnesota Cities’ urged Greater Minnesota residents to take action. They are calling on civic groups, community leaders and editorial boards to join with the Coalition in asking the House Republicans to reconsider their decision and restore funding for the broadband program this year.

The League of Minnesota Cities urged its members to contact legislators to support broadband funding. The league told its members that broadband resources are critical for cities’ economic development and vitality.

Rep. Pat Garofalo (R-Farmington), Chair of the House Job Growth and Energy Affordability Committee, said that wired broadband, which provides high-speed Internet connections, is too costly in sparsely populated areas. He said wireless and satellite technologies are more financially effective. Chair Garofalo said businesses that could provide satellite and wireless service are not interested in State aid because of possible strings.

Gov. Dayton proposed $20 million for broadband development in his budget. Democrats suggest spending more than that in the coming two-year budget. Rep. Garofalo said he thinks negotiations with the Senate and Governor will result in a compromise on broadband spending.

Executive Director Dan Dorman of the Greater Minnesota Partnership said businesses need high-speed Internet to compete. The current broadband program provided grants to 17 organizations to expand high-speed Internet.

Education

Early learning grants, small increases in per-pupil spending and a requirement that school districts consider performance, not solely seniority, when forced to lay off teachers are included in an omnibus education bill unveiled by a House committee this week.

If approved, the bill would spend $16.9 billion on education, up nearly 7 percent from the current two-year budget cycle. Though Republican leaders previously announced that many government divisions would receive nominal increases, the House budget targets do not account for inflationary pressures in the cost of delivering education services.

House DFLers criticized the bill, saying that the increases to the per-pupil formula fall far short of what schools need, warning that it would lead to teacher layoffs.

One of the more controversial portions of the bill is a proposal that would reform how teacher layoffs are conducted. Education Minnesota, the statewide teachers union, has opposed efforts to revise State law to require that teacher layoffs be based on multiple considerations, not solely seniority . The union also opposes efforts to streamline the licensing process for out-of-state educators seeking to move to Minnesota to teach.