The Legislature recessed on Friday, March 24 for an Easter/Passover Break returning Tuesday, April 7.

Tax Cuts

When Minnesota lawmakers return to the Capitol next week, they will be thinking about how they should cut taxes with the nearly $1.9 billion State surplus. House Republicans want $2 billion in tax cuts. But Gov. Mark Dayton and Senate Democrats are warning that a too hefty give-back could set the stage for future deficits.

In trying to piece together a tax bill that meets the House Republican goal, Taxes Chair Greg Davids (R-Preston) is sorting through a stack of proposals that top $9 billion. House Republicans haven’t specified which taxes they plan to cut, but Rep. Davids said his strategy is to touch as many taxes as possible. He said his goal is to pass a tax bill that Dayton will sign. That’s why he’s not trying to repeal the income tax increase on top earners that Gov. Dayton signed into law in 2013.

The tax relief in Gov. Dayton’s revised budget plan totals $197 million. Most of it is for an expansion of child care tax credits. Similarly, Senate Democrats announced last week that they’re proposing about $225 million in tax cuts. They’ve said property tax relief and aid to local governments will be part of their plan.

Senate Majority Leader Tom Bakk (DFL-Cook) said restraint is needed from all sides in the end-of-session negotiations to ensure a sound structural budget for the next Legislature. Lawmakers have until May 18 to finish their work.

Senate Democrat Budget

Democrats in the Minnesota Senate released a budget outline Friday that would spend nearly $43 billion over the next two years and provide more than $200 million in tax cuts. Senate Majority Leader Bakk said $555 million would be spent on public schools, colleges and universities, and puts $250 million into the State’s rainy day account. The House GOP budget outline is about $3 billion smaller than the plan Gov. Dayton released in January and updated last week.

Uber

A “global agreement” cut between insurance companies and smartphone-based ride-sharing services like Uber was adopted by the Senate Judiciary Committee just before recess following a lengthy debate.

The bill mostly matches its House companion on how much rideshare services must insure drivers in “Phase One,” or after they’ve turned on the app but before they’ve triggered a button signaling that they’ve accepted a fare.

Under the legislation, Uber must supply its drivers in Phase One with minimum liability limits of $50,000 in death and injury liability coverage, $100,000 in total coverage and $30,000 in property damage. In phases two and three–after they’ve agreed through the app to pick up a fare and once the customer is in the vehicle—that coverage jumps to $1.5 million. (It remains $1 million in the House version.) The Senate bill also applies existing State law regarding the purchase of Surplus Lines coverage, Transportation Network Companies (TNCs) will contract with a standard insurance carrier unless a policy is not available and only then will have the option of purchasing Surplus Lines coverage.

The bills will be taken up on the respective floors following the legislative break.

Metro Transit

As Minnesota lawmakers debate major transportation funding this spring, support for roads and bridges is nearly unanimous. Mass transit is not.

Rep. Tim Kelly (R-Red Wing) Chairman of the House Transportation Policy and Finance Committee, and other Republicans would rather invest more in roads and bridges, though they’ve included a little extra money for transit in their transportation proposal. Meanwhile, Gov. Dayton and fellow DFL lawmakers have proposed a tax increase in the Twin Cities metro area to expand transit.  Sen. Scott Dibble (DFL-Minneapolis) Chairman of the Senate’s Transportation and Public Safety Committee says it’s beneficial for students, seniors, and contributes to a more vibrant neighborhood.

Under Metro Transit, 80 percent of Twin Cities metro trips last year were on buses vs. 20 percent on trains. In Greater Minnesota, almost every one of the 12 million trips was by bus. Operating mass transit last year in Minnesota cost about $574 million. That figure includes federal, state and local shares. Taxpayers shoulder the majority of the cost. In the metro area, fares account for about 30 percent of the operating cost of transit.

Greater Minnesota Transit might get the money it wants. Dayton, Republicans and DFL lawmakers have all proposed at least $12 million per year for outstate transit.

In the Twin Cities, the Met Council’s long-term plan includes upgrades to the existing system, such as new bus shelters. The Met Council also wants a major expansion of dedicated transitways.  If lawmakers approve Gov. Dayton’s $280 million-per-year metro sales tax proposal, said Adam Duininck, Chairman of the Met Council, it can be done.  A GOP proposal includes far less money for metro-area transit, setting aside about $100 million to the Met Council for capital improvements over the next decade.

MinnesotaCare

Eliminating a public health care program called MinnesotaCare has featured as part of the House Republican budget plan. The legislation to do away with it is sponsored by Rep. Matt Dean (R-Dellwood). MinnesotaCare provides state subsidies to help people buy health insurance when they make too much money to qualify for Medical Assistance, but can’t afford to buy their own plan on the exchange.

Rep. Dean’s plan would move these participants to MNsure, the State’s health insurance exchange, where they would buy a plan that he says will represent more choice. Rep. Dean said his proposal could save roughly $900 million, with some of that money being spent on other GOP priorities like nursing home funding.

Most MinnesotaCare enrollees live in rural parts of the State, and largely in districts represented by Republicans. Over the Legislature’s Spring break, the liberal group TakeAction Minnesota has organized a phone bank and letter writing effort in key districts promoting the benefits of MinnesotaCare. The letter opposing elimination of MinnesotaCare was signed by more than 80 groups, including the American Heart Association and UCare, a prominent Minnesota health insurance firm. These groups are concerned about displaced enrollees having to spend more on premiums.