House Republican Budget
The budget outline House GOP leaders released Tuesday proposes $2 billion in tax cuts as part of their two-year budget plan. It also spends nearly $40 billion, excluding their recently announced transportation funding plan.
Despite the State’s projected $1.9 billion budget surplus, House Speaker Kurt Daudt (R-Crown), said that Republicans are trying to reduce government spending and said growth in government spending should not outpace growth in family budgets.
The Republican outline spends less than DFL Gov. Mark Dayton has proposed on education and health and human services. The plan is about $3 billion smaller than Dayton’s budget proposal.
House budget committees will begin making decisions based on the new outline. House Ways and Means Chair Jim Knoblach (R-St. Cloud) said the proposed spending on Health and Human Services is $1.1 billion below projections. He highlighted the need to better enforce the eligibility of people using State subsidized health care. There are several bills moving through the Legislature to require DHS to contract with an outside vendor to conduct eligibility verification audits.
Minority Leader Paul Thissen (DFL-Minneapolis), warned that the budget proposal is a recipe for a State government shutdown.
Transportation
Minnesota House Republicans unveiled their much anticipated transportation funding proposal targeted to spend $7 billion over 10 years on roads and bridges without raising taxes.
The approach contrasts with DFL Gov. Dayton and Senate Democrats, who are pushing a proposal that relies on a gas tax and metro sales tax increase and also includes funding for metro area transit projects.
During a news conference Monday, House Transportation Chair Tim Kelly (R-Red Wing) said their plan uses $228 million of surplus money, $1 billion in general obligation bonding over 10 years, and another $1 billion in transportation bonds and existing sales tax revenue from auto parts, car rentals and leases. Rep. Kelly said the sales tax revenue would be dedicated to a new transportation stability fund. He said the plan would tap $300 million in existing general fund revenue the next two years. House Speaker Daudt would not say which areas of the budget would have to absorb that shift.
The Republican plan would require the Metropolitan Council to fund metro transit operations and requires the Minnesota Department of Transportation to find 15 percent savings ($1 billion over the 10 years of the plan) in their budget.
Senate Majority Leader Tom Bakk (DFL- Cook) said constitutionally-dedicated funding, like the gas tax, is a better approach for transportation because it could too easily be undone by the next Legislature.
Both sides agree that billions are needed to boost road and bridge investments.
Sunday Sales
A labor union is lifting its objection to Sunday takeaway sales of 64-ounce beer growlers from craft breweries.
Ed Reynoso of the Teamsters Joint Council 32 told a Senate committee on Monday that “at this point” the union won’t oppose a bill legalizing those growler sales on Sunday. It’s a shift from last year when Teamsters’ concerns about those sales affecting labor contracts helped derail the proposal. They said craft brewers should have to report off-site sales on a quarterly basis to make sure they’re not exceeding annual barrel limits for small breweries.
Assisted Suicide
Sen. Chris Eaton (DFL-Brooklyn Center), a registered nurse, said she proposed the legislation to begin a conversation on whether to allow dying patients to request and receive medications to control the time and manner of their deaths. Her “Compassionate Care Act,” was presented Monday at a Senate Committee on Health, Human Services and Housing hearing. However, Sen. Eaton said she wanted to postpone any action on the bill until after she conducts informational hearings on the measure around the State between legislative sessions.
Under the bill, terminally ill Minnesota adults could request aid in dying. They would have to be mentally competent to make sound decisions and able to take the medication themselves. Two physicians would have to confirm that the patient met those criteria, and doctors could opt out if they wish.
The Minnesota Medical Association currently opposes assisted suicide. But Minnesota doctors might want to reconsider that policy, said Dan Hauser, MMA.
Physician-assisted suicides are allowed in Oregon, Washington, Montana, New Mexico and Vermont.
Religious Exemptions for Autopsies
Legislation to establish a religious exemption for autopsies has traveled through rocky terrain in Senate and House committees. Two recent deaths with the Fon du Lac Band involving a medical examiner who refused to respect the decision of the families, even ignoring a judicial order in conducting an autopsy, was the impetus for the bill. There is an agreement between the Tribes and Medical Examiners, but Legislators are still concerned about striking the right balance between protecting religious freedom and providing enough discretion to law enforcement and medical examiners for suspected foul play, drug overdoses, or poisonings. Legislators also want to ensure that Minnesota law is congruent with national standards.
Tip Credit Bill
Just before midnight on Monday, the House passed a bill that caps wages for tipped employees at $8 an hour. The bill, sponsored by Rep. Pat Garofalo (R-Farmington), is an effort to revise the minimum-wage law passed last year.
The State’s wage floor will rise to $9 an hour this August, and will rise an additional 50 cents an hour by 2016. Beginning in 2018, the minimum wage will be indexed to inflation.
Under Garofalo’s bill, crafted by the Minnesota Restaurant Association, tipped employees’ pay would be capped at $8 an hour. The proposed pay change would apply only if those workers earned a total of at least $12 an hour in a two-week pay period, after factoring in tips. If they failed to meet that threshold, they would earn the prevailing state minimum wage.
Rep. Garofalo and other supporters of the legislation said it would relieve pressure on restaurants who say labor costs are growing after the Legislature raised the State’s wage floor last year. Others who testified recently in support of the proposal said it would allow them to raise wages for kitchen staff.
Restaurant operators also have said that automation would replace employees. However, according to the Minnesota Department of Employment and Economic Development the food and accommodations industry has added 1,100 jobs since August, when the minimum wage rose to $8 an hour.
Senate Majority Leader Bakk opposes the bill and has said it is unlikely to find much support in the DFL-led Senate. Gov. Dayton said Monday he also opposes creating an exemption for tipped employees.
Super Bowl Sunday
Senate Majority Leader Bakk said Tuesday that he and House Speaker Daudt will push for $2.8 million in additional tax relief sought by Super Bowl organizers for the 2018 game in Minneapolis. They agreed to try to find room for the provision in this year’s catch-all tax bill.
Gov. Dayton said in a statement that he hadn’t been informed of the request and that “unless that happens, there is nothing else to consider.”
Minnesota already exempts sales tax on tickets to the game (worth about $9.5 million in forgone revenue according to State officials). The new request would extend that exemption to cover events related to the game at the new Vikings stadium, such as an interactive zone for fans or certain tailgating events.
Super Bowl organizers have said that they believed they had assurances from State leaders that the related events would be exempted. Gov. Dayton and legislative leaders provided a letter of general support in the bid package approved by NFL owners in May 2014, but it contained no promises.
State leaders made it clear they would not be waiving player income taxes for the time they’re in Minnesota. Those costs will be covered by private fund-raising, officials with the host committee said. The Department of Revenue and stadium officials have estimated player income tax revenue at $1 million-$3 million.
Organizers say an additional $3 million in tax breaks is a small number, particularly when Meet Minneapolis has calculated that state and local governments will collect $32.4 million in tax revenue from Super Bowl visitors on items such as food, shopping, rental cars, hotels and entertainment.
Most of the Super Bowl expenses, they point out, will be funded through $30 million-$40 million in private donations.
The two leaders of the minority caucuses, Rep. Thissen and Sen. Hann (R-Eden Prairie), said they had not been informed of the host committee’s request.
Sen. Hann said he would be open to the request if it were part of a broader plan Republicans have been considering: a sales tax holiday for everyone in Minnesota during the Super Bowl. Rep. Greg Davids (R-Preston), Chair of the House Taxes Committee, said organizers need to act fast if they hope to get the exemption adopted this session.
