Lawmakers are running out of time for budget

By Trey Mewes and Sarah Stultz

Not even local lawmakers know if the Minnesota Legislature will end its session on time.

Though the Legislature’s 115th session is scheduled to end by midnight on Monday, most lawmakers are watching on the sidelines as House Majority Leader Kurt Daudt, R-Crown, Senate Majority Leader Tom Bakk, DFL-Cook, and Gov. Mark Dayton negotiate the state’s budget for the next two years.

“We’re just anticipating whatever’s going to happen next,” said Rep. Jeanne Poppe, DFL-Austin.

Though leaders have met in negotiations for the past few weeks, few budget details have been solidified. Lawmakers already have budget numbers for higher education, courts and public safety programs, but there’s still much to go over before Monday’s deadline.

Despite uncertainty over the upcoming deadline, some lawmakers are confident the Legislature can wrap up the session.

“I’m still hopeful that we can continue to compromise,” Sen. Dan Sparks said. “There’s still a way to get this done if we can all come together.”

District 27A Rep. Peggy Bennett, R-Albert Lea, said there is good news that the House, Senate and governor have agreed on budget targets, and party leaders expect to have the budget passed before the Monday deadline.

“We’ll be working around the clock to get there though,” Bennett said.

Bennett said, at least on the Republican side of the aisle, Daudt communicates with his caucus throughout the high-level negotiations.

“We discuss our priorities ahead of time,” she said. “So he goes in knowing what our group wants.”

Negotiators still have major discussions ahead: what to do about the state’s Health and Human Services bill, as well as the differing House and Senate tax plans. House Republicans want to give almost $2 billion in tax relief to match the $2 billion state budget surplus, while Senate Democrats have backed a tax plan that funds, among other things, increases to Local Government Aid and transportation infrastructure repair.

The Senate transportation package also includes a gas tax, which has run into large opposition from Republicans and even some Democrats, including Sparks.

Despite some budget numbers released, it appears much of what has passed in the House and Senate will be on the table this weekend.

“Whatever happened over the last five months in committee, that’s all being considered,” Poppe said. “Now, all has been thrown back in the mixer and it seems like whatever is going to be included in negotiations will pass through. It’s going to be very unclear what happens to some of those proposals.”

Poppe expressed frustration with negotiations, as few lawmakers outside of the negotiators know which proposals will turn into law. Some conference committees hadn’t even officially met until Thursday or Friday, and those that have are already stripping some omnibus bills of policy proposals to strictly focus on budget matters.

As a result, rank and file lawmakers will need to be prepared to vote according to House and Leadership wishes, which leaves little time for the state Revisor’s Office to properly review legislation.

“If we’re under a crunch time, we’d like to have the opportunity to review all of those bills,” Poppe said.

Bennett agreed.

She said at the last minute items can sometimes get snuck into bills that the legislators don’t understand that they are approving. She hoped that wouldn’t be the case this time.

Sparks maintains the session could end on time once negotiators release budget targets to conference committees.

They’ll have to act fast, however — construction on the Capitol starts on Tuesday.

Either way, legislators have leeway before their actions cause another government shutdown. If lawmakers miss the Monday deadline, they have until July 1, or the start of the state’s fiscal year, to finish the state’s budget and special session.

 

The Issues:

Education

The state looks to increase its education funding, but not enough to freeze tuition for students at public colleges and universities.

Education budget targets were released Thursday, but lawmakers say it’s likely tuition will increase.

Both Poppe and Sparks are against the tuition increases.

“Unfortunately, over the past several budgets we seemed to have balanced the budget on the backs of students,” Sparks said.

While Sparks was pleased with what could be a slight increase to education funding, he and Poppe pointed out the need for more funding for jobs training and research projects.

Bennett said though she would love to see tuition freezes, she is unsure if that will happen.

“So many areas need it,” she said. “It’s a balancing act.”

She said the E-12 budget target agreed on this week is higher than the Senate target and a little lower than the governor’s target. Up for debate still is Dayton’s wish to have preschool paid for every child.

“As important as early childhood is, I think we need to stick to targeting high-risk kids with scholarships,” she said. That way, existing preschool owners can continue with their businesses.

 

Local government aid

The House and Senate were far apart on LGA funding this year.

The House proposal caps aid given to so-called “first class” cities such as Minneapolis, St. Paul, Duluth and Rochester based on population and residents per capita, which would end up cutting about $85 million in total from LGA. Only Rochester would be unaffected by the funding shift, and LGA levels would largely freeze for other cities.

In contrast, the Senate proposal would add $45.5 million to LGA, which would bring aid funding up to its 2002 levels.

It remains to be seen whether LGA will be fully funded or, as many political observers expect, the negotiations causes LGA to slightly increase.

Regardless, Poppe and Sparks called the issue an important one for Greater Minnesota cities.

“Anything we can do to help continue the local government aid helps us, but it also does help the suburbs and other places,” Poppe said. “We need to keep Greater Minnesota strong and vital because you’re going to continue to have growth everywhere, including in the rural areas.”

 

Transportation

Once the biggest issue lawmakers touted before the start of the session, transportation funding fell by the wayside toward the end of March as Republicans and even some Democrats opposed a 16 cent-per-gallon gas tax proposed by Gov. Mark Dayton.

Though the Senate passed a proposal including the gas tax, the issue still remains contentious as House Republicans are dead set against the tax.

Bennett said she is against a gas tax because of the effect it would have on low- and middle-income residents. She doesn’t understand why a new tax needs to be created when there is a $2 billion surplus. With Albert Lea being close to the Iowa border, she said it would also hurt that area even harder.

“I just don’t think the gas tax is reasonable now,” Bennett said. “I can’t see it with a surplus.”

Sparks, Poppe and plenty of political observers agree transportation funding likely won’t get much traction this session. Instead, the issue will likely be tabled for future legislative sessions.

When transportation comes up again, Poppe believes legislators will have to get serious about raising funding to fix the state’s roads, bridges and trails.

“I do believe that there’s going to have to be some revenue raised in some way to stabilize the transportation cost,” Poppe said. “This isn’t all of a sudden that we discovered this in the last five months, this has been ongoing for the past decade.”

 

MinnesotaCare

The other issue that separates House and Senate leaders is the state’s Health and Human Services department, specifically a proposal to do away with the low-income health program MinnesotaCare.

House Republicans passed a proposal late last month to cut MinnesotaCare in favor of state tax credits to offset increasing costs for the 90,000 or more residents who would have to buy insurance through MNSure as a result.

Republicans and Democrats have disagreed over whether the move would save money — Republicans estimate cutting MinnesotaCare would eliminate $300 million, but the state’s budget staff estimate only $16.5 million in savings.

Over the past few weeks, health care professionals and lobbyists have joined Democrats in criticizing the House proposal.

Poppe and Sparks support keeping MinnesotaCare in place, as the program would greatly affect thousands of Greater Minnesota residents.

“We have a lot of self-employed farmers and middle income to low income health insurance enrollees who benefit from MinnesotaCare,” Sparks said. “Before we totally dismantle it, we need to take a look at it and see if we can improve it first.”

 

Workforce housing

Sparks and Poppe joined a push by Greater Minnesota lobbyists to give $40 million over the next two years to a new office of workforce housing, which would fund housing projects across the state using grants and tax credits.

While the office would help Greater Minnesota communities like Austin keep up with housing demands, the office would benefit metro suburbs and other growing corners of the state by supporting developments with an average value between $75,000 and $250,000 per unit.

The House and Senate bills drew bipartisan support, including a co-author credit from Bakk on Sparks’s bill.

The proposal was included in the Senate omnibus tax bill, but was left out of the House proposal.

Though lawmakers don’t have to pass a tax bill this year per state statute, Sparks hopes the Legislature can make progress on workforce housing funding.

“I think it would be a real missed opportunity if we didn’t pass something,” Sparks said.

 

Other issues

Bennett said she is excited that nursing home reform has been included in the Health and Human Services target budget.