With five weeks to go, lots for 2017 Legislature to get accomplished

When legislators return to St. Paul next week after the week-long Passover/Easter break it is expected to get hectic as members will have just under five weeks to complete their work and avoid a potential special session.

Without budgets in place by July 1, a partial or full state government shutdown could occur for the second time in seven years. The 2011 shutdown lasted nearly three weeks.

The February Economic and Budget Forecast that indicated a $1.65 billion projected budget surplus has led to showdowns over increased spending from many DFLers to Republicans who think much of the money should be returned to state taxpayers.

With more than three months of the 2017 session elapsed, things don’t seem so rosy.

Myron Frans, the commissioner of Minnesota Management and Budget, said at a news conference last week that the Legislature is using “alternative math” in its spending proposals and that the Republican omnibus bills “are not serious attempts to govern Minnesota.”

“They seem to be planning for a potential shutdown; we certainly are not,” he said.

“I know the governor feels like he has an advantage if he can push everything right to the brink at the end of session and force everybody into these last-minute passing of bills,” House Speaker Kurt Daudt (R-Crown) said at a news conference last Thursday.

“We’re going to invite the governor and his commissioners into conference committees, just as we have in our regular committees as we’re passing bills. We want the decisions made there in a transparent place where the public can actually have some input in the process,” he said.

Gov. Mark Dayton’s $45.8 billion biennial budget proposal, released in January, is a $1.2 billion increase over current biennial spending. The number was upped to $46.1 billion in late-March to “incorporate the impact of both the February forecast and enacted legislation this session along with adjustments to the governor’s FY 2018-19 budget plan.”

House Republicans unveiled a $46.3 billion spending plan March 20 that includes increases for health and human services, education, roads and bridges and $1.35 billion reduction in tax relief.

Daudt estimates House Republicans and the governor “probably agree on 90 percent of state spending, certainly north of 80 percent. … With a $1.65 billion surplus, I see no reason why we can’t come to an agreement and work out our differences and solve the state’s budget in a way that represents the priorities that I think we all care about and that Minnesotans care about.”

“The House Republican budget is a combination of uninspired, short-term thinking and mean-spirited attacks on working families and our future. It doesn’t address any of Minnesota’s needs,” Rep. Erin Murphy (DFL-St. Paul) said in a statement. “…The budget lacks ambition, doesn’t even glance in the direction of Minnesota’s future opportunities and necessities, and wholly ignores Minnesota’s future needs in favor of political games and handouts.”

Let’s take a look at where things stand on some issues:

Agriculture

Several legislators called April 5 “Ag Day” at the Capitol as the House passed the omnibus agriculture policy and finance bills.

Sponsored by Rep. Paul Anderson (R-Starbuck), the policy bill, HF1717, awaits action by the full Senate. Passed 109-25 by the House, it contains a number of provisions including measures that would raise the financial limit for farmers to enter into a debt-mediation program and expand protections from nuisance lawsuits to include farms of all sizes. Sen. Bill Weber (R-Luverne) is the Senate sponsor.

The omnibus agriculture finance bill, HF895/ SF780*, is sponsored by Rep. Rod Hamilton (R-Mountain Lake) and would appropriate more than $118 million in General Fund spending. Passed 42-25 by the Senate March 30, it was amended and passed unanimously by the House. It is now expected to go to a conference committee. Rep. Torrey Westrom (R-Elbow Lake) is the Senate sponsor.

Bonding

That silence you hear is the absence of a complete bonding proposal from the House Republicans.

Gov. Mark Dayton unveiled a $1.5 billion idea in January. Sponsored by Sen. David Senjem (R-Rochester), SF210, a $1.6 billion proposal, including $744.5 million in general-obligation bonding and $201.89 million in General Fund spending, awaits action by the full Senate. The House Capital Investment Committee has met eight times this session, with nothing scheduled.

Last year, in what is traditionally a bonding-focused session, House Republicans unveiled a bonding proposal in the waning hours of the 2016 session and a House vote was taken in the chaotic final minutes of session. The DFL-controlled Senate tacked on a way to pay for the controversial Southwest light-rail project just before the clock struck midnight, but the House had adjourned sine die. Capital investment was part of the unsuccessful special session discussion over the final seven months of 2016.

Education

A proposed teacher licensure system overhaul and an omnibus finance bill are well on the way through the Legislature.

HF140*/ SF4, sponsored by Rep. Sondra Erickson (R-Princeton) and Sen. Eric Pratt (R-Prior Lake), would revamp the existing teacher licensure system by consolidating the licensure authority under one Professional Educator Licensing and Standards Board, create a four-tier licensure system and conform existing statutes for clarity and consistency. Considered a true effort in teamwork by Erickson, the bill was passed 76-55 by the House April 3 and tabled the next day by the Senate.

HF890*/ SF718, the omnibus education finance bill sponsored by Rep. Jenifer Loon (R-Eden Prairie) and Sen. Carla Nelson (R-Rochester), aims to increase the General Education Basic Formula funding by 1.25 percent over the 2018-19 biennium — nearly $207 million in additional funding. But it’s below the governor’s proposal of 2 percent and also defunds voluntary pre-K programs in lieu of $48 million in school readiness adjustment credits and $24.6 million for early learning scholarships.

The bill has been contentious since its creation, and is now expected to go to a conference committee after it was passed 75-54 by the House March 31 and passed, as amended, by the Senate 38-28 on April 4.

Elections

After approval by the House Government Operations and Elections Committee March 16, the omnibus elections bill, HF729 is waiting for action by the full House. One provision in the bill, sponsored by Rep. Kelly Fenton (R-Woodbury), would move the state primary election date from August to June.

The companion, SF514, sponsored by Sen. Mary Kiffmeyer (R-Big Lake), awaits action by the Senate Finance Committee.

Environment and natural resources

The omnibus environment and natural resources bill, HF888*/ SF723, that would make more than $830 million in direct appropriations during the upcoming biennium and contains about two-thirds policy, opponents say, passed 80-53 by the House March 30. The Senate passed the bill, as amended to include its language, 37-29 on April 3. A conference committee is expected to be called.

Sponsored by Rep. Dan Fabian (R-Roseau) and Sen. Bill Ingebrigtsen (R-Alexandria), the bill would also reshape the Environmental Quality Board, make changes to buffer regulations and also change a number of permitting processes.

Some DFL members say the bill’s policy provisions, including controversial buffer law modifications, could prompt a gubernatorial veto.

Health and human services

Health and human services funding makes up one of the largest chunks of Minnesota’s biennial budget, and the House plan passed 74-53 April 7 would make some big changes in that area of state government.

Rep. Matt Dean (R-Dellwood) and Sen. Michelle Benson (R-Ham Lake) sponsor HF945/ SF800*.

The $14.3 billion funding bill would scrap MNsure, the state’s 4-year-old health exchange, and move Minnesotans purchasing insurance on the individual market into the federal system by Jan. 1, 2019. It would also represent a $622 million reduction from current health and human services spending.

The Senate’s health care spending package, passed 36-30 April 3, would keep MNsure in place and would cut spending less than the House bill, roughly $335 million.

In contrast, Dayton has proposed boosting health and human services spending by more than $300 million. That leaves little common ground as negotiations begin following the Legislature’s break.

Higher education

In an effort to make post-secondary education across the state affordable and accessible for all, HF2477/ SF2214*, the omnibus higher education finance bill will likely head to a conference committee after the Senate couldn’t concur. Rep. Bud Nornes (R-Fergus Falls) and Senate President Michelle Fischbach (R-Paynesville) are the sponsors.

The amended bill was passed 77-53 by the House April 4, one week after the Senate passed its version 36-31. The House bill calls for an increase of $149.5 million from the current two-year total; the Senate $100 million. (See the comparison spreadsheet)

Further muddying its future, a policy provision in the bill would require two-year colleges in the Minnesota State system to freeze tuition at the 2017-18 academic year rate in the second year of the biennium.

Jobs and economic development

Sponsored by Rep. Pat Garofalo (R-Farmington) and Sen. Jeremy Miller (R-Winona), HF2209/ SF1937* was passed 58-9 by the Senate March 29, and amended to include the House language before being passed 76-55 April 6 by the House, meaning it’s likely headed to a conference committee.

The House plan calls for a $10.8 million base increase; the Senate $9.4 million.

Among its spending differences, the Senate seeks $20 million in the biennium for a border-to-border broadband grant program; the House calls for $7 million in Fiscal Year 2018. However, neither comes close to the $60 million Dayton seeks.

Dayton sought nearly a doubling ($12 million increase from its $13 million base) in the Job Creation Fund and an $8 million increase in the Minnesota Investment Fund from its $22 million base. The Senate has a $3 million increase for each fund, but the House plan adds $1 million to the Minnesota investment Fund, but cuts the Job Creation Fund by $3 million.

Saying the bill is about better government, Garofalo touted its efficiencies and embracing of new technologies that, on the energy side, avoid what he called a “false tradeoff” between pollution and cheap energy versus clean environment and costly power.

Public safety

Both bodies have passed their version of an omnibus bill HF896/ SF803*: the House 94-37 April 3 and the Senate 51-15 March 28. A conference committee will likely seek to reach agreement.

The first issue will be agreeing on a spending target. The House proposal contains a $111.5 million forecast base increase, nearly double the $59 million increase in the Senate bill. A plan proffered by the governor calls for a $256 million increase.

As for policy, the Senate bill has little whereas the House bill has plenty, including controversial language that would toughen the penalty for protestors who block a freeway or airport. It would also require the Corrections Department to use a 1,600-bed prison in Appleton when the department determines it has an insufficient number of prison beds to house the current or projected prison population, prohibit the use of stays of adjudication and imposition in criminal sexual conduct cases and increase penalties for child pornography offenses and establish mandatory minimums.

Rep. Tony Cornish (R-Vernon Center) and Sen. Warren Limmer (R-Maple Grove) are the sponsors.

Real ID

The conference committee on HF3*/ SF166 is scheduled to convene at 1 p.m. April 18. At issue is state compliance with the federal Real ID Act of 2005.

According to the federal Department of Homeland Security, “The Act established minimum security standards for state-issued driver’s licenses and identification cards and prohibits Federal agencies from accepting for official purposes licenses and identification cards from states that do not meet these standards.”

Without adherence to federal law, only people with enhanced driver’s licenses or other IDs, such as passports, would be able to access commercial flights starting in January 2018. Already, some have found Minnesota driver’s licenses inadequate for admission to military bases, nuclear power plants and other federal facilities.

Sponsored by Rep. Dennis Smith (R-Maple Grove), the House version would provide a two-tier system under which Minnesotans could opt for a Real ID-compliant driver’s license or a non-compliant ID like is currently issued.

Passed 72-58 by the House Feb. 23, the Senate — where Pratt is the sponsor — passed an amended version of the bill 60-7 March 30. However, the House did not concur with the Senate changes to remove a provision that would prohibit people living in Minnesota without legal permission from obtaining a driver’s licenses.

State government

The House passed its version of an omnibus state government finance bill, which funds most executive branch agencies and offices, 75-55 April 7.

That bill, HF691/ SF605*, sponsored by Rep. Sarah Anderson (R-Plymouth) and Sen. Mary Kiffmeyer (R-Big Lake), will likely head to a conference committee after the break. The Senate passed its version 36-30 March 29.

The administration believes the spending plan — $943 million over two years — is far short of what should be spent on state programs and services.

In part, the House bill would reduce state spending by $430 million through employee retirements and attrition and possibly layoffs, IT consolidation and curbing in-house gainsharing programs, among others.  Of note, the House bill would provide “lights on” funding at 95 percent of current levels, in case a budget isn’t in place before July 1 of an odd-numbered year.

Taxes

House Republicans have a lot hinging on the fate omnibus tax bill (HF4*/ SF2255) — namely a $450 million funding shift away from the General Fund to pay for road and bridge projects.

Also, a Republican-supported measure to make private school tuition eligible for the education tax credit is sure to cause angst with the governor as the bill moves to conference committee. Sponsored by Rep. Greg Davids (R-Preston) and Sen. Roger Chamberlain (R-Lino Lakes), the bill was passed 80-52 by the House March 30 and amended by the Senate before being passed 40-27 on April 3.

With a huge divide between House biennial proposal of $1.3 million in tax relief, the Senate’s $900 million and the governor’s $300 million, it’s anyone’s guess which proposals will survive.

Included in the House bill is an increase to the income limit at which Social Security is taxable, refundable student loan payment and college savings plan credits, and expansion of the child dependent care credit.

But DFLers contend that without an expanded working family credit, no inclusion of local government aid increases and the overall cost of the bill — at $ 5.2 billion — the proposed relief would come at the expense of other areas of the state budget.

Transportation

Both legislative Republicans and Dayton believe the state needs to pour a large amount of additional funding into Minnesota’s transportation infrastructure. But differences remain between the House and Senate plans — and both packages differ widely from transportation priorities that Dayton has put forward.

Rep. Paul Torkelson (R-Hanska) and Sen. Scott Newman (R-Hutchinson) sponsor HF861*/ SF1060.

To help provide $2 billion in additional road and bridge funding over two years, the House plan as passed 76-54 March 31 would shift roughly $450 million over two years in transportation-related tax revenues from the General Fund into a new account for road and bridge projects. It would also rely heavily on borrowing, proposing $1 billion in new trunk highway bonding over four years, and would create a new $75 annual surcharge on electric vehicles.

The Senate proposal, amended onto the House bill April 4 before being passed 39-27, also relies on a shift of General Fund dollars toward transportation in addition to future borrowing. In addition, it would require the Department of Transportation to find millions of dollars in efficiencies within its budget.

Dayton and DFL lawmakers have decried the lack of new, dedicated funding for transportation — like the gas tax increase the governor has proposed — and say funding cuts to the Metropolitan Council in the Republican plans would devastate Twin Cities-area mass transit.

House Public Information Services Editor LeeAnn Schutz, Assistant Editor Mike Cook, and writers Jonathan Avise, Ricky Campbell, Tory Cooney, Nick Longworth, Jonathan Mohr and Chris Steller contributed to this story.