By Jason Schoonover, Jordan Gerard and Sam Wilmes

Minnesota lawmakers are convening today for what’s excepted to be a short legislative session, but much work is already on the agenda.

“I think it’s going to be a short session, but I’m hopeful it’s going to be a really productive session,“ District 27 Sen. Dan Sparks, DFL-Austin, said.

After approving a two-year budget in the 2015 session, a bonding bill will be a key focus this year.

But other unfinished work from 2015 is expected to drive talks this year, including a tax bill and transportation.

District 27A Rep. Peggy Bennett, R-Albert Lea, hopes to address local bonding projects, broadband access, local government aid, education, transportation and other local topics during this year’s legislative session.

She hopes to work with Democrats to address the issues.

“We’ve got a lot to accomplish,” Bennett said.

Along with transportation, the bonding bill and the tax bill, Sparks expects broadband funding, the state’s roughly $900 million surplus and workforce housing to be topics discussed at the year’s session.

Sparks sees chances for positive changes this session, but he said it will take both parties working together to accomplish that.

“There’s nothing wrong with compromise,” he said.

 

Albert Lea bonding proposals

Four Albert Lea-themed bonding requests are seeking funds headed into the 2016 legislative session: $15 million for the development of the Blazing Star Landing, $1.5 million for the development of the Bent Tree Trail, $1.3 million for the connection of water and sewer lines to the Stables area and about $7.4 million for Riverland Community College renovations.

Sparks said the Blazing Star Landing project would be a “shot in the arm” for Albert Lea, and he said they’re going to work hard to ensure it’s included in the House and Senate bills.

“It’d be a great potential for some economic development,” Sparks said.

Sparks was also pleased that work in the Stables area made Dayton’s proposal, and he wants to make sure it makes the final approval.

Bennett said she plans on working toward passing each bonding request, but does not see each one receiving bonding dollars this session.

She said she has been told the Legislature will focus on core infrastructure projects, which she said may bode well for the Stables project.

The Riverland project would renovate outdated space to relocate truck driving and collision programs from Austin to Albert Lea and integrate the programs into shared spaces with auto service and diesel programs.

Bennett said Riverland renovations could also be approved because of the college’s connection to education.

While the college was recommended for funding in Dayton’s proposal for money for heating and cooling units, a request for funding to help move programs from Austin to Albert Lea was not included in the governor’s or the Minnesota State College and Universities Systems’ recommendation.

The college has some unused and unattractive space at the Albert Lea campus that hasn’t been remodeled or upgraded for 50 years, said District 27B Rep. Jeanne Poppe.

“Career and technical students are looking for places to go and companies are seeking workforces,” said Poppe, DFL-Austin. “It needs to be attractive to students and try to replicate a work setting rather than just a classroom setting.”

The three campuses can also have more connectiveness between them and share large-scale equipment, Poppe noted.

 

Austin waterways plans

The Cedar River Watershed District has received bonding dollars for many years to clear away homes on flood plains, build berms or partial barriers and change the landscape so flood waters won’t go into the economic district as part of Austin’s flood mitigation efforts.

While flood mitigation efforts continue for Austin to slow the flow and enact other barriers to lessen the impact of flooding, the community is beginning to look ahead. Now, dollars could help boost recreational opportunities near Ramsey Mill Dam and in the heart of Austin.

Last year, Senate and House bonding committees toured Austin to check out projects to clear Mower County waterways and to enhance recreational opportunities around two dams.

“I think there’s a really good opportunity to get those funded,” Sparks said.

The city of Austin is seeking $600,000 for the Fourth Avenue Northeast Dam area for flood control retaining walls, restoring the former mill site, for stream bank restorations and to study dam conditions. And it’s seeking $3 million in state bonding dollars for the Ramsey Dam area and Ramsey Mill Pond near The Old Mill Restaurant to acquire more land, build two miles of trail, restore a railroad bridge, improve the dam and build public amenities to improve the area.

Water quality projects are also continuing as leaders are seeking $4.2 million for the Accelerated Results Plan, which will complete 25 water retention and water quality projects in the district. The CRWD already has half the money for the $8.4 million project. The district is providing $1.2 million, the Hormel Foundation is providing $3.2 million, and the district is looking for the state to match those funds.

Sparks described the projects as a good opportunity to help clean out waterways. While the plans weren’t specifically listed in Gov. Mark Dayton’s bill, Sparks said they’ll work hard to include the Austin plans in the House and Senate bill language.

Currently, some existing canoe portages are a crumbling platform right now, Poppe said. It needs to be improved because the Cedar River is a state water trail and more people are looking at the Cedar River as a waterway for canoes and kayaks. Then the waterways can be used to get from Minnesota to Iowa.

The plans would make the river more usable and safe and it would also be more aesthetically pleasing.

 

Taxes

Little has changed on taxes: Republicans want big tax cuts but Democrats aren’t sold. Republican House Speaker Kurt Daudt hasn’t laid out his top tax targets, but he has mentioned removing state taxes on Social Security income, which could cost the state $500 million annually.

Noting the shrinking surplus, Democratic Senate Majority Leader Tom Bakk has downplayed the likelihood of major cuts or tax credits. One possible agreement is expanding a tax credit for childcare costs to more families.

Poppe said there are three corners to the tax issue: the tax bill itself, the bonding bill and transportation. And she said the state will need to be in sync with each other to get a solution.

“You could put some money into the bonding bill to pay for transportation infrastructure but that’s not sustainable, it will only fix roads for a short term,” Poppe said. “Maybe it could be fixed with surplus money and the bonding bill, but we need to figure out a long-term solution for fixing roads.”

Poppe said the tax bill could be separate and needs to be a part of that; local government aid and other tax provisions could be used. It could also impact commercial buildings and property taxes for farmers and home owners.

Sparks said he is hopeful lawmakers will be able to find some tax relief.

Minnesota State Chamber of Commerce leaders are calling for the state to phase out the statewide property tax levy and remove the annual tax inflation index. Austin Area Chamber of Commerce Executive Director Sandy Forstner said it’s hard for businesses to hire, provide pay increases and make improvements with the tax, which is a message leaders have brought to local lawmakers.

“I think it is time that we take a look at that,” Sparks said.

But it’s not just businesses, as Sparks said he hopes farmers and others can also see breaks as part of a multi-faceted tax bill.

“Hopefully everyone can get a little relief,” Sparks said.

Bennett supports tax relief in the wake of the state’s projected $900 million surplus.

She said she supports making Minnesota more competitive with neighboring states by eliminating the statewide business property tax and phasing out taxes on Social Security and military pensions.

 

Transportation

The two parties will pick up where they left off last session on competing transportation plans: a world apart.

All agree a funding package for road and bridge repairs is a top priority, but how they’ll pay for it is up for question. Democrats insist a gas tax increase is necessary for reliable funding, while Republicans are pushing a plan that uses a slice of the surplus and shifts taxes on car-part sales and vehicle leases into a dedicated fund.

But Sparks said the message from around the state is clear after the Legislature didn’t approve transportation funding last year: people want action on transportation funding.

“People are getting tired of us kicking the can down the road,” Sparks said.

Poppe said the state needs to fix it as it is public safety issue and hazardous conditions. But the problem remains how to fix it and find sustainable funding.

The state and several counties face extensive funding shortfalls for transportation.

At a League of Cities meeting in Austin last October, Minnesota Department of Transportation projects a $6 billion gap between transportation needs and the available funding. Just last week, the Mower County board discussed a half-cent sales tax to supplement road and bridge funding after outlining a more than $100 million for road and bridge projects of the next decade with an estimated shortfall of $6.5 million a year.

Sparks said a compromise is needed. While he’s open to using part of the $900 million surplus on roads as one-time funding sources, he said a long-term, comprehensive plan is needed. He’d also be open to discussing adjustments to the gas tax.

Give and take will be needed on both sides of the aisle, Sparks said.

“We have to be open to all those ideas,” Sparks said.

Bennett is looking for core transportation projects to be funded, and she supports the House Republicans’ $7 billion, 10-year transportation package that stalled in the 2015 legislative session. Over 10 years, the proposal invests $4 billion for state roads, $1.4 billion for county roads, $583 million for municipal roads, $282 million for cities with less than 5,000 residents, $139 million for Greater Minnesota bus services and $60 million for township roads and bridges.

The bill would also help local small towns by directly funding road improvement projects for towns with less than 5,000 residents, without raising the gas tax.

Bennett said the direct funding would impact local communities, such as Wells, Alden, Glenville and Emmons, with road improvement projects.

The plan shifts about $3 billion of existing general fund money from taxes on auto parts, car rentals and leasing taxes into a new transportation fund. It pulls $228 million from the state’s budget surplus, $1.3 billion in trunk highway bonds, $1.2 billion from realigning resources in Minnesota Department of Transportation and $1.05 billion in general obligation bonding.

Bennett said the plan would repair or replace more than 15,500 lane miles of road and 330 bridges statewide.

Sparks also said it will be important to make sure bonding dollars go to local roads and bridges.

Over the course of the next ten years, Poppe said there will be a big need for fixing roads. If the state doesn’t address it, she said the potholes will get bigger and the roads will become undriveable.

 

Surplus

A slowing economy will shape the outcome of the session. Legislators learned last month that that a projected $1.2 billion surplus has shrunk to $900 million, a potential blow to a laundry list of spending proposals. Some legislative leaders are urging caution against big budget items that could saddle the state with ongoing payments.

To Sparks, the state will need to be cautious with the surplus. The state should build back up its reserves to ensure they don’t have to borrow from school districts like the state had to do a few years ago.

While there are a lot of ideas for the surplus, Poppe said there are some people would just want to use some of it for transportation.

But she hopes an amount of that money will be put into a reserve fund, which is a good long-term strategy.

“It’s one time money, so you only get to spend it one time,” Poppe said. “You have to figure out how to reduce taxes or adjust things and look into the future and what it might mean down the road.”

 

Broadband 

The stage is already set for negotiations on how much the state should plow into expanding broadband Internet access. Dayton set a high bar at $100 million, House Republicans countered with $35 million. The debate on this rural issue foreshadows a sharp campaign focus on the House and Senate districts in greater Minnesota that will help determine the fight for control of the Legislature this fall.

Last spring, the Legislature put $10 million into a competitive grant account after $20 million the year before. Demand for that money far outstripped the available resources.

Poppe said there is a need for broadband expansion across the state, but there’s not enough money being put into that for the entire state, only certain cities who are underserved have used that money so far. The concept is to improve access and entry to have the ability to get online at a faster rate, for commerce, school, or business work.

Bennett said she looks at broadband access as a core infrastructure need. She said schools and businesses must have high-speed Internet access to be competitive.

According to Bennett, the Legislature needs to make sure broadband services are available for rural communities.

She said the Legislature should evaluate a possible increase in funding or new technology to make sure they are not locking themselves into a wrong approach.

“We need to make sure we’re doing this correctly,” she said.

Sparks also noted broadband funding will be important for schools and businesses to compete on a global scale, and projects like Vision 2020’s Gig Austin are looking to bring broadband to communities like Austin.

 

Workforce housing 

Sparks is looking to finish work centered around workforce housing last year.

Though some grants were approved last year though a bill Sparks introduced, he aims for more work on portions of the bill that would give grants and tax incentives to investors for workforce housing opportunities so younger professionals could find better housing options in places like Austin.

A shortage of workforce housing has been on Austin city leaders minds in recent years. Mayor Tom Stiehm formed a committee to address the issue of workforce housing.

Area officials have said a lack of workforce housing contributes to the area’s workforce shortage.

Bennett said there is more to addressing the issue than an increase in funding and would like to see more grants available for cities that reflect their needs.

She said some state policies and regulations have resulted in an increase in the cost of construction that has harmed development.

Bennett attended a meeting Monday in Austin with U.S. Congressman Tim Walz and other region leaders to discuss the issue.

 

—The Associated Press contributed to this report. 

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