Competing Budgets

by Winthrop & Weinstine, P.A.
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Lengthy floor sessions ensued this week as House and Senate lawmakers took up supplemental budget bills in their respective chambers. The Republican House had three bills to debate over the course of the week. The DFL Senate had all of its proposals for spending the $900 million budget surplus in a single bill, which was scheduled for a vote Thursday. In addition, lawmakers found time for some potentially contentious committee hearings this week on Real ID and guns.

Education Omnibus Budget Bill

First out of the gate was the House Education budget bill, taken up on the floor Monday afternoon.

The GOP proposed budget for schools and state colleges and universities does not spend any new money in the current two-year budget cycle. Instead, spending on some new proposals is expected to be paid for with $55 million from faster repayment of state loans by some school districts.  House Republicans this year have proposed largely holding the line on the current $42 billion two-year budget.

Among new programs are proposals to recruit and retain teachers of color in Minnesota, where statewide only 4 percent of teachers are minorities. Also, the bill would offer loan forgiveness and tuition incentives for educators. There is also grant money for para-professionals in education who are interested in becoming licensed teachers. The teacher workforce effort had bipartisan support.

Rep. Jenifer Loon (R-Eden Prairie), Chair of the House Education Finance Committee, highlighted a measure she sponsored that would form a working group to examine school discipline problems, following several high-profile assaults on teachers. Teachers would be notified if students with past incidents of violence are placed in their classrooms.

House DFLers largely criticized the budget proposal, arguing that with a $900 million projected budget surplus, legislators should spend more on higher education and tuition relief.  A provision requiring additional oversight of fetal tissue research at the University of Minnesota also generated some heated debate.

Agriculture/Environment/Energy/Jobs Budget Bill

The House passed a supplemental budget bill Wednesday that includes new spending to expand rural broadband, promote tourism, and tackle racial economic disparities.

The measure adds $12 million in new spending overall. House Democrats criticized the GOP bill as another missed opportunity to make key investments with the state’s $900 million budget surplus. House Republicans want to use that surplus for transportation projects and tax cuts. The bill includes $6 million for proposals aimed at reducing racial economic disparities. DFL Gov. Mark Dayton, however, is seeking $100 million for similar efforts and Senate Democrats want $91 million. Democrats also took aim at the bill’s broadband investment of $15 million in 2017, as it is just a fraction of what the Governor and Senate are seeking.  House Republicans countered that their plan also comes with a pledge to make another $25 million broadband investment in 2018. Committee Chair Pat Garofalo (R-Farmington) said the money will help the state leverage additional federal money and private sector matches.

The House bill includes a repeal of the 2014 law allowing unionization of child care workers, money to complete the Lewis & Clark Regional Water System project in southwestern Minnesota and money for anticipated lawsuits related to the PolyMet mining project. It also includes cuts to the Minnesota Investment Fund, Job Creation Fund, and eliminates money for the Minnesota Film Board (an incentive program used to lure moviemakers to the state). Garofalo said those government subsidies and perks have primarily benefited the Twin Cities metro area, and thinks a better strategy is to get investment in infrastructure, primarily in Greater Minnesota.

Health and Human Services/State Department/Public Safety

The last of three budget bills in the House, HHS/state government/public safety, was approved in the wee-hours Friday morning following a twelve hour debate.

The budget bill would clamp down on state agency travel and cut salaries for commissioners. On the health care side, it would start the process of shifting Minnesota into a federal health care exchange and out of MNSURE, the state based exchange. It includes programs for integrating substance abuse and mental health care, reductions to counties’ share of chemical dependency payments, public health program eligibility verification, and increased funding for training physicians serving Greater Minnesota. The bill would require licensing of facilities that perform abortions, and imposes a prohibition on facilities that perform abortions from receiving Title X and federal family planning grants.

Under the Public Safety article, the bill increases penalties for driving unlicensed and failing to stop for a school bus. It would also prohibit use of a drone within one mile of a public safety helicopter.  For state department spending, the bill delivers a one-time $500,000 appropriation for MN.IT Services to perform a study of cybersecurity across state government.

Gov. Mark Dayton warned that the combination of zero funding for areas where he proposed funding combined with troubling policy measures would make it unlikely for him to sign off on the bill in its current form. House Speaker Kurt Daudt (R-Crown) defended the House budget approach, which he said is aimed at preserving the surplus for use on road construction and tax cuts.

Senate Omnibus Supplemental

In the Senate, majority Democrats used a single budget bill that would carve up much of the surplus for new or expanded programs. The Senate supplemental spending plan is similar to what Gov. Dayton is seeking.

The DFL bill includes spending increases for education, rural broadband expansion, and programs to tackle racial economic disparities. It also funds a freight rail director position, improves emergency response for oil trains, and hires additional rail inspectors.

Senate Republicans argued that the money should go toward road and bridge funding, which was an unresolved issue from last session. Senate Minority Leader David Hann (R-Eden Prairie) said last year’s unfinished work is the reason there is a surplus. Senate Transportation Chair Scott Dibble (DFL-Minneapolis) opposed the effort to use one-time spending rather than continue to work on a long-range funding measure for roads, bridges and transit. Senate Democrats favor a gas tax increase, while House Republicans insist on using only existing revenues. Conference committee negotiations on last year’s transportation bill began today.

The last amendment of the evening, offered by Senate Taxes Vice Chair Ann Rest (DFL-New Hope), created a hostile work environment. She offered a provision reallocating Republican Senate office space inside the State Office Building to the Revisor of Statutes. DFL lawmakers moved into the new $90 million Minnesota Senate Building that they supported before the start of the 2016 session. GOP lawmakers who opposed the project refused to move in until after the 2016 elections. The controversial amendment cancels the current lease and significantly reduces the amount of space available for lawmakers. Republicans expressed outrage. Sen. Carla Nelson (R-Rochester) said “This is the first time in my life that I’ve been embarrassed to be a Minnesota senator.”

The competing supplemental budget plans in the Senate and House will need to go to conference to be resolved.

Bonding

The House Capital Investment Committee Chair Paul Torkelson (R-Hanska) said Tuesday the fate of a House bonding bill is closely linked to the outcome of lawmakers’ negotiations over comprehensive tax and transportation legislation.

Even-year legislative sessions are generally regarded as “bonding years,” when lawmakers pass a large-scale borrowing package that helps fund infrastructure projects across the state.  Gov. Mark Dayton has proposed a $1.4 billion package — it would be the largest in state history — and Senate DFLers said they would like to see a similarly sized bill, although no proposal has yet been unveiled.

House Republican leadership earlier this month released budget targets that call for a $600 million bonding bill. Bonding bills require a sixty percent supermajority to pass. Torkelson described the bonding bill as “dessert” – something that comes at the end of session.

House lawmakers on the bonding committee heard dozens of bills that laid out the capital investment needs of state agencies and local governments across the state. Torkelson said lawmakers are evaluating and prioritizing projects now so they are ready when the time comes.

The Senate Capital Investment Committee also met Tuesday, hearing county transportation requests. Transportation Chair Scott Dibble (DFL-Minneapolis) testified that he did not want to advocate for bonding requests as they are one time funding and he strongly believes a long-term funding plan is imperative. The Committee heard about the Moorhead rail grade separation project and the I-35-Lake Street Station projects, among others. Hennepin County Commissioner Peter McLaughlin made a strong pitch for a half-cent sales tax increase to replace the need for future bonding requests. Senate Capital Investment Committee Chair LeRoy Stumpf (DFL-Plummer) concluded that he hopes to have a transportation package this session. He announced that he plans to unveil an omnibus bonding bill Monday morning.

Real ID

Minnesotans could begin applying for federal Real ID Act-compliant driver’s licenses and ID cards by Oct. 1, 2016, under a bill a House committee advanced Monday.

Sponsored by Rep. Dennis Smith (R-Maple Grove), the bill would lay out new requirements for issuing the more secure state IDs, including new security features on the cards, added proof of residency requirements and extended data retention timelines.

The bill would bring Minnesota into compliance with the federal law to make state-issued IDs more secure in the face of terrorism concerns, and help the state beat a 2018 deadline requiring enhanced IDs to board domestic commercial flights.

Currently, Minnesotans cannot gain entrance to secure federal facilities and military bases using only standard state-issued IDs.  Gov. Mark Dayton requested a new Department of Homeland Security extension to allow Minnesota IDs to be used to enter those facilities while the state works toward satisfying federal requirements.

The House Civil Law and Data Practices and Government Operations Committees both approved the bill and referred it to the Transportation Committee. The Senate companion passed out of the Transportation Committee and was referred to the State and Local Government Committee.

Every state will be federal Real ID compliant by the 2020 deadline, when the Department of Homeland Security has said it will issue no more extensions to states that do not meet the new standards.

Background Checks for Firearms

The Senate Judiciary Committee held a well-attended, informational hearing on Tuesday on two gun bills. One bill would require criminal background checks on all gun sales. The other bill would allow law enforcement or family members to get court orders to prevent people who pose a danger to themselves or others from possessing a firearm.

Senate Judiciary Committee Chair Ron Latz (DFL-St. Louis Park) described his bills as common sense solutions that would help keep Minnesotans safer. Latz wants to expand the criminal background check requirement to gun shows, personal sales and online transactions. Supporters and opponents spent more than two hours testifying. Bill proponents told lawmakers of their personal stories and concerns over gun shows and online sales. Gun rights advocates spoke against the bill and disputed many of the statistics used by its supporters, saying most criminals obtain their guns from other criminals. They also warned that this bill would move the state closer to a gun owner registry.

Sen. Warren Limmer (R-Maple Grove) described the hearing as “political mumbo jumbo” to get an issue “spiked up” for the election. Latz said gun control is an unavoidable campaign issue that will shake out district by district this fall.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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