The Minnesota Legislature wrapped up its business late Monday night, meeting a constitutional deadline to finish its work for 2015 by midnight. Adding to the pressure to end on time, as part of the ongoing renovation of the State Capitol building, construction crews were scheduled to tear up the legislative chambers immediately after lawmakers left on Monday.  Workers began packing up the Chambers even as a few members lingered after adjournment.

After days of tense, secretive talks inside the Governor’s mansion, the week before adjournment deadline, legislative leaders Friday evening, May 15, said they had reached a state budget deal that included more funding for nursing homes, state colleges and universities and K-12 schools.  The lawmakers’ plan would have left $1 billion of the state’s projected $1.9 billion surplus unspent, allocating just under $900 million. Gov. Mark Dayton said the Legislature’s 2016-17 spending plans were inadequate.

After House Speaker Kurt Daudt (R-Crown) and Senate Majority Leader Tom Bakk (DFL-Cook) announced their plans, Gov. Dayton, feeling cut out of the negotiations, said he wanted the state to spend at least an additional $550 million over the next two years on early childhood through high school education. Lawmakers allocated only about $400 million in additional cash to E-12 education. Bakk and Daudt said they would stick to their additional $400 million in spending on education and were disappointed that the Governor was dissatisfied. Gov. Dayton has threatened repeatedly to veto the bill.

Lawmakers worked through the weekend and suspended their normal rules to meet through the night to get the budget passed on time.

Left behind in the legislative compromise: Any major transportation investment and the $2 billion in tax cuts the Republican-controlled House backed. Daudt and Bakk said the budget will leave significant unspent money on the bottom line, which could allow tax cuts or transportation spending next year.

Special Session

Governor Dayton held a press conference today, May 19, 2015. He will veto the E-12 bill and will call a special session. He is still waiting for most of the budget bills to be presented. He must sign or veto all bills within three days after they are presented to him or the bill will become law without his signature.

The Special Session will be called once there is agreement on the agenda and date with the four caucus leaders. He is willing to compromise with the Legislature and open to other items on the agenda such as transportation and taxes, provided there is a signed agreement. He also said he is serious about having special session in a tent on the Capitol lawn.

Dayton said his previous offer to sign all the bills except for education is now off the table.

Other Potential Special Session Triggers

With the waning minutes ticking, the $540 million omnibus legacy bill squeaked through the House, but was not able to be taken up by the Senate.  Additionally, a bill giving the Office of the Revisor of Statues permission to do necessary cleanup language to the 2015 laws and a bonding bill were not able to be acted upon before the midnight deadline.

A Quick Glimpse of What Passed

K-12 Education 

The legislative deal would give about $400 million in additional funding for early childhood through high school education in the next two years.  Gov. Dayton had maintained that he would only sign off on an education funding package that increased funding to $550 million and included $173 million for half-day pre-kindergarten in public schools across the state.

Under the legislative agreement, there would be enough money to increase K-12 schools’ general funding formula by 1.5 percent in 2016 and 2 percent in 2017, a top priority for school districts. The bill also includes $30 million more for an early learning scholarship program and $30 million for early learning grants.

Gov. Dayton is expected to veto the bill.

Higher Ed

The Legislature passed a budget bill that increases higher education spending by $166 million. The bill provides $101 million more for the Minnesota State Colleges and University system and $53 million more for the University of Minnesota, including $30 million for the medical school. That is less than both systems requested and not enough to continue a tuition freeze for another two years. House Higher Education Committee Chair Bud Nornes (R-Fergus Falls) said the conference committee did not split the funding equally between the University and MnSCU systems this year because they felt MnSCU needed more.

Rep. Nornes said the bill would cut tuition over the next two years for two-year schools. There may be a tuition increase in the first year for MnSCU’s four year schools. The bill does not provide free tuition to students enrolled in the state’s technical schools as the DFL-controlled Senate had sought. Instead of full funding, Senate Higher Education Chair Bonoff (DFL-Minnetonka) said a $5 million pilot project will help prepare students for high demand jobs. The bill also adds $7 million to the state grant program for low-income students.

Transportation

The Legislature also passed a bare bones transportation bill.  Legislative leaders ditched the gas tax increase to pay for road and bridge construction and dropped the long term transportation bill. There’s also no metro area sales tax increase to fund transit.

House Transportation Committee Chair Tim Kelly (R-Red Wing) said he thinks the increased attention on transportation will give the Legislature momentum to pass a bill next year.  Senate Chair Scott Dibble (DFL-Minneapolis) said they will use the provisions from the more comprehensive bill as a vehicle for future negotiations, but is concerned about passing transportation legislation in an election year.

Instead, legislators passed a “lights on” status quo transportation bill that includes increased fines for texting while driving. It also includes $5 million for transit in Greater Minnesota, and $5 million for rail grade crossing safety. More than $12 million will help small towns improve their roads.

Health and Human Services

Conferees tasked with dealing with health and human services were required to plug a $300 million budget gap. Instead of making cuts to programs, they used one-time money and payment shifts. Senate Health and Human Services Chair Tony Lourey (DFL-Kerrick) said the bill makes significant investments in mental health and child protection. The agreement also contains an increase of $138 million for nursing homes.

The plan also appoints a task force to study what to do with MinnesotaCare after its funding ends in 2019. Republicans dropped their plan to scrap the state subsidized insurance plan as a part of the budget deal. According to Republicans, the Department of Human Services may be able to realize $25 million in savings by verifying eligibility of recipients of public programs.

Even though legislators were weighing major changes to MNsure, the state’s health insurance exchange, many of those changes were abandoned. Instead, they opted to release premium rates for plans sold on the exchange earlier, and to require the State to request a federal waiver to allow anyone who qualifies for federal subsidies to be able to receive them even if they buy coverage on the exchange.

Agriculture and Environment

The budget deal includes a compromise on environmental “buffer zones” around waterways, which had been a key Dayton priority in his push to improve water quality. Lawmakers, agriculture groups and the Governor worked for months to find agreement on protecting water from runoff. Some farmers protested Dayton’s original proposal to require 50-foot buffers along all waterways. The agreement reached early Sunday morning called for rooted-vegetation buffers of 30 feet in width but an average of 50 feet along public waterways. The strips could be narrower, 16.5 feet wide, along drainage ditches.  Farmers have until 2017 for public waterways compliance and 2018 for ditches.

The conference committee on the Agriculture and Environment bill defeated an amendment to allow the state to issue driver’s licenses to immigrants who are in the country illegally. Supporters of the provision had been holding fort at the Capitol for weeks making their wishes known.

DFLers were disappointed that the bill dismantles a citizens’ board that has oversight of the Minnesota Pollution Control Agency. The bill also funds a University of Minnesota study of how avian flu is spread and contains money to respond to the outbreak.

State Government 

The $974 million funding bill for state offices includes nearly $15 million for the Senate and nearly $3 million for the House.  The higher level of Senate funding will help pay for construction of a new Senate office building north of the Capitol building.  The bill will also repeal the state’s political contribution fund for two years, and it will allow counties to outsource annual audits rather than use the State Auditor’s office, a provision State Auditor Rebecca Otto says should lead the Governor to veto the bill.

Judiciary and Public Safety 

This budget bill puts about $2 million additional funds into the state’s courts and prisons systems. That includes a 4 percent pay increase for judges and court staff, as well as more than $6 million for more public defenders. Another $11 million will go to the Bureau of Criminal Apprehension to hire more forensics specialists and to create a financial crimes unit to investigate crimes like identity theft and fraud.

The bill has one provision opposed by Dayton: It allows people to equip their guns with silencers.

A provision that would have restored the right to vote to felons as soon as they were released from prison did not make it into the final version.