Capitol View: July 19, 2011 Archive

Shutdown Day 19: End in sight?

Posted at 10:28 AM on July 19, 2011 by Tom Scheck
Filed under: 2011 Shutdown, MN Legislature, Mark Dayton

Several people tell MPR News that there is a handshake agreement on all of the budget bills. The language now has to be drafted in bill form and get final agreement from Gov. Dayton and GOP legislative leaders. No word on how long that will take but remember that the Health and Human Services budget bill and the K-12 funding bill often run hundreds of pages.

There is a possibility that Gov. Dayton could call a special session as early as today. Expect the House and Senate to kick it into overdrive and work around the clock until all of the budget bills have been passed into law.

House and Senate leaders will make motions to suspend the rules and take up the bills right away. Democrats, who have been mostly shut out of negotiations, have been critical of the budget framework but are likely to put up the votes necessary to keep the session moving. No one wants to look like they're holding up the bills when 22,000 state employees are off the job.

Key questions:

Do Republicans have the votes to pass the budget? Several GOP first-term members have argued that they won't spend "a penny more" on the budget. Many are taking a wait-and-see approach to the budget.

What cost savings measures are in the bill? Several members, including Sen. Paul Gazelka, R-Brainerd, say they'll be inclined to vote for the bills if there are measures that will slow the rate of growth in the Health and Human Services and State Government budgets bills. No word on what those changes look like.

Will MCCL crash the deal? Minnesota Citizens Concerned for Life says it has deep concerns that GOP leaders, particularly Senate Majority Leader Amy Koch and House Speaker Kurt Zellers, agreed to remove abortion language in the budget bills. Dayton wanted controversial policy provisions removed from the budget bills. MCCL's Scott Fischbach, who is married to Senate President Michelle Fischbach, has been highly critical of the decision and has criticized GOP leadership for the move. Will he influence enough Republicans to scuttle the deal?

How long will it take for government to re-open? Many of the budget bills say they take effect "one day after final enactment." That means state departments and state agencies can start work again one day after Dayton signs the bills into law. Some services won't be up and running right away though. State workers will get three days notice to return to work.

Dayton calls Special Session for today

Posted at 11:00 AM on July 19, 2011 by Tom Scheck (7 Comments)
Filed under: 2011 Shutdown, MN Legislature, Mark Dayton

Governor Dayton announced just moments ago that he's calling a special session for 3pm today.

The Legislature will act quickly to take up nine budget bills and a bonding bill. The state government shutdown will end as soon as Gov. Dayton signs the bills into law.

"We worked very hard literally around the clock for the last four days and nights," Dayton said.

GOP House Speaker Kurt Zellers says lawmakers will work as quickly as possible to get the budget bills passed.

"I would say it's better to get people back to work than talk about a bill," Zellers said.

Dayton said he's hopeful some agencies can start operating by tomorrow.

"I'll sign them all as they come through," Dayton said, "Minnesota will be officially lights on."

Dayton and the Republican controlled Legislature have been at odds over the best way to craft a two year budget. They reached agreement last week to erase a $5 billion budget deficit by using a mix of spending cuts, a payment delay to schools and borrowing against future tobacco payments and spending cuts.

The budget deal would end the longest government shutdown in state history.

Tax bill restores LGA funds for cities of the 1st class

Posted at 6:34 PM on July 19, 2011 by Tom Scheck
Filed under: 2011 Shutdown, MN Legislature, Mark Dayton

The tax bill hasn't been posted yet but the House Tax Committee chair is sharing some information about the bill. Rep. Greg Davids, R-Preston, says the measure will keep funding for state aid to cities, known as local government aid, at 2010 levels. That's similar to the Senate bill that passed in the regular session and less money than Gov. Dayton had proposed in his budget.

Davids also says cities of the 1st class, including Minneapolis, St. Paul and Duluth, will continue to receive funding. The House pushed to remove funding for those three cities, but Davids says Gov. Dayton objected.

"I'm a big believer in local government aids," Davids said. "That was a struggle because some of the folks in our caucus aren't real big on local government aid for whatever reason. The governor wanted more. I took everything I could get and that's what we put in there."

Davids also says there are tax cuts in the bill. Renters will get a credit for property taxes, there will be direct property tax relief for homeowners and data storage centers will be allowed to exempt sales taxes for energy usage, software and computer equipment. Gov. Dayton and Davids hope that the tax break attracts large data storage companies to Minnesota. The idea is that the state's cold weather will help keep those computer servers cool.

Davids also said the federal income tax will be factored into future tax incidence studies - a major victory for Republicans who complained that those studies didn't factor in the amount of money top earners were paying in taxes.

The mechanism that will allow the state to borrow against future tobacco payments will also be in the bill. Davids says he expects criticism, but he said the votes should be there since it's a lynchpin to the agreement between Dayton and GOP legislative leaders.

"Overall, this is the bill that gets us out of town in good order," Davids said.

Here's a link to the bill, the spreadsheet and the summary.

MPR's Alex Friedrich also posted this synopsis:

·Total General Fund (Gross): $2.87 billion

· How it compares to current fund: 4.9 percent less

· Tobacco bonds: Included in bill. These allow the state to borrow against future tobacco payments. They are the controversial GOP-backed item that was a cornerstone of the framework agreement.

· Local Government Aid: Restored to 2010 levels for largest cities. - similar to Senate bill but less than governor's proposal. The House had pushed to remove funding for Minneapolis, St. Paul and Duluth. But LGA for all three remains at 2010 levels.

· Renters' credits: Will be reduced in future budget years. The credit for property taxes: 19 percent for FY2012, permanently reduced to 17 percent beginning FY2013.

· Property tax: Expands the homeowner property tax refund program. Increases the maximum refund from $2,410 to $2,460. Expands the income range at which the maximum applies. Decreases copayment percentage for most participants.

· High-tech tax breaks: Data storage centers can exempt sales taxes for energy usage, software and computer equipment - a tax break designed to attract large data storage companies to the state.

· Estate tax: Allows the exclusion of qualified small-business properties and farm properties - whose combined value does not exceed $4 million -- from calculation of Minnesota estate tax

· Federal income tax: Will be included in future tax-incidence studies - a major GOP victory. Republicans had said such studies didn't consider the amount of money that wealthy residents were paying in taxes.

· Political Contribution Refund Program: Suspended for two years.

· Counties to fund Maintenance of Efforts at 90 percent of current levels.

K-12 bill focuses on rural schools and student performance

Posted at 7:28 PM on July 19, 2011 by Tom Scheck (1 Comments)
Filed under: 2011 Shutdown, MN Legislature, Mark Dayton

The K-12 budget bill hasn't been made public yet, but the author of the bill is starting to discuss specifics.

House K-12 Finance Chair Pat Garofalo, R-Farmington, says the bill makes some needed changes that he argues will improve the state's schools. Garofalo said the state will start linking effectiveness to student achievement. He said teachers will start to be judged on student performance, rural schools will see more money and students will start receiving $5,000 scholarships from the state if they graduate early.

"I think moms and dads are really going to like that," Garofalo said of the scholarship. "They'll encourage little Johnny and little Jane to try a little bit harder and get that job done in school..

The bill also ends the integration funding formula, a fund that helps inner-city schools. The funding will end at the end of the next fiscal year. Garofalo said the program is flawed and he expects to work with administrators and teachers to come up with a different program.

Garofalo also said the bill directs more money to rural schools. He also said there will be more money for special education funding and an increase in the per pupil formula.

There are also scholarships for early childhood education, which Garofalo said will give lower income parents more options when it comes to daycare and other early childhood programs.

I'll post more when the bill is made public...

The undercard is over. Bring on the heavyweights.

Posted at 8:50 PM on July 19, 2011 by Tom Scheck (1 Comments)
Filed under: 2011 Shutdown, MN Legislature, Mark Dayton

St. Paul -
The House and Senate acted quickly to pass the smaller sized budget bills. In two hours, the two chambers passed five budget bills: the transportation funding bill, the jobs and economic development bill, the environment budget bill, the public safety and judiciary bill and the higher education budget bill. Those bills are all on their way to Governor Dayton's desk.

Most of the bills passed with relative ease and with limited debate. The biggest question mark was whether the Senate would vote to pass the higher education bill. Minnesota Citizens Concerned for Life, a group that lobbies against legalized abortion, has criticized GOP leaders in the House and Senate for removing a provision that would ban human cloning. MCCL's executive director Scott Fischbach is married to Senate President Michelle Fischbach, who chairs the Senate Higher Education Committee and carried the higher ed bill, said she was disappointed the provision was removed from the bill.

"It was already in session law for the last two years so now we have removed that," Fischbach said. "I think that was legislation that we should have kept in this bill in order to protect that and use state funds wisely."

Fischbach ended up voting against her own bill, as did several other Republican members. GOP Sen. Ray Vandeveer.

While the House and Senate worked at rapid speed in the first half of the evening, there's no certainty that pace will continue. The larger budget bills; health and human services, K-12, state government finance and taxes have yet to be debated. The tax bill includes a controversial measure that borrows $700 million against future tobacco payments. The K12 bill includes a $2.1 billion school shift.

Democrats have been highly critical of the financing of the budget regardless of Gov. Dayton's support. Rep. Frank Hornstein, DFL-Minneapolis, says said the budget plan was irresponsible.

"We need to be honest," Hornstein said. "It's the first of nine budget bills that simply defers important budget decisions into the future. Now is the time to address these issues, not procrastinate and not put them off into the future.

Dayton says he intends to sign the budget bills all at once after the Legislature sends them to him. The shutdown will end after he signs the bill into law.

Meanwhile, Dayton's administration is preparing to restart government services that have been shuttered for 19 days. Dayton's chief of staff Tina Smith and Management and Budget Commissioner Jim Schowalter say it could take a few weeks before government services are operating at the level prior to state government shutdown on July 1.

"We will bring two values to this," Smith said. "One is urgency and the other is common sense."

Neither Smith nor Schowalter could say when state parks, transportation projects, Canterbury Park Horse Track and other services will be up and running again.

"Just because the bill is passed or you see it on your TV that does not mean that agency is up and running," Schowalter said.

Schowalter said it takes about a day for appropriations to be directed one day after Dayton signs the budget bills into law.

He said they will announce on their website what the recall plans are for the 22,000 state employees who have been laid off. Here's the link.

Photo Info:
Patricia Torres Ray (DFL-Minneapolis) sits in the Senate chamber during a 1am recess on July 20, 2011 Photo Credit: Nikki Tundel