Political chatter: North Dakota is major Minnesota political topic

Garofalo

It is hard to talk long to any Minnesota official without hearing about North Dakota.

The reason? Oil that is, black gold, Bakken tea. The first thing you know, old North Dakota’s a billionaire.

All that money has Minnesota politicians envious and concerned.

From Gov. Mark Dayton on down, it is common to hear them wishing that Minnesota had a resource worth as much as that being pumped from the Bakken oil field in western North Dakota. Then, almost without pause, a politician can pivot and complain that North Dakota’s oil makes Minnesota a more dangerous state.

So it was no surprise the other day when the Minnesota Legislative Energy Commission slipped, as if on an oil puddle, from talking about rail congestion slowing the delay of coal to power plants to the dangers of railroads transporting oil across the state. Rail safety is not in the commission’s portfolio, but over the past couple of years, the nine or 10 oil trains a day that pass through Minnesota has become an explosive issue in the Capitol.

Six or seven trains, each with at least 100 cars of oil, travel from Moorhead through the Twin Cities and on southeast each day, headed to Midwest and East Coast refineries. Fewer go from North Dakota, then south through Willmar and Marshall to Oklahoma and the Gulf Coast.

So when Dave Christianson of the Minnesota Department of Transportation was telling the commissioner about rail congestion that many blame on North Dakota crude oil, questions arose about rail oil safety.

“Bakken fuel is very volatile…” Christianson told the legislators. “If there is a rupture or spill, it tends to ignite with any source of heat.”

Republicans, especially, long have argued that building pipelines would help fix the problem. Christianson said that if every pipeline proposed through 2025 is built, “we could empty all the oil trains being moved today.”

However, he quickly added, Bakken production is growing so fast that its output would be so big that pipelines could not handle it all and the same number of oil trains would be needed as are on the tracks today.

“Energy independence is a good thing,” state Rep. Pat Garofalo said, “but it creates new problems.”

The Farmington Republican, who next year will lead a House energy committee, said that oil trains are far more dangerous and costly than pipelines.

New tax eyed

The governor and most legislative leaders have said no general tax increase is needed in 2015, but a phantom surplus means some state lawmakers who want to increase spending are hatching plans to get around that attitude.

Sen. Kent Eken, D-Twin Valley, says he is calling to close a “loophole” in proposing to enact a new tax on people with higher incomes.

Eken always has been a strong proponent of increasing funding for care given to the elderly and disabled. With a $1 billion surplus that state officials say will be devoured by inflation, he had a choice of taking money from state programs or add a new tax. He hopes his new tax is the answer.

The federal government taxes Americans to fund Social Security, but the tax is not on the full income for many taxpayers. This year, the tax was levied on $117,000 of income (it changes every year). So if someone made $200,000, the tax only was levied on $117,000 of the income.

Eken’s idea is to add his new state tax where the federal Social Security one leaves off. So this year it would have started at $117,000, meaning with a $200,000 income a Minnesotan would pay tax on $83,000 for elderly and disabled care. People earning less than $117,000 would not pay the Eken tax.

Eken said that early estimates show the tax could raise $600 million.

“I am not wedded to this idea,” Eken said, adding that he just wants to find more money for the cause and he does not expect his tax to pass as is.

More leaders named

House Democrats named three deputy minority leaders for the 2015 legislative session: from rural, suburban and urban Minnesota.

Joining already-elected Minority Leader Paul Thissen of Minneapolis will be deputy leaders Paul Marquart of Dilworth, Melissa Hortman of Brooklyn Park and Erin Murphy of St. Paul.

Two years ago, Marquart challenged Murphy to be majority leader when Democrats controlled the House. His loss led to many Republican charges that the Democratic-Farmer-Labor Party caucus was controlled by urban Democrats.

Bakk raises money

Senate Majority Leader Tom Bakk a few days ago raised money for the disadvantaged instead of a political campaign.

His annual Stock the Shelves event brought in more than $100,000 for northeastern Minnesota food shelves. In the eight years he has hosted the Twin Cities event, the Cook Democrat has raised more than $600,000.

“Even with a recovering economy, job losses and rising food costs mean more families are stretched to the limit,” Bakk said. “We are doing our part to help, and I hope all Minnesotans will take time to help others this holiday season.”

Will Minnesota challenge federal officials over drones?

Mark

Privacy advocates want legislators to regulate drones flying over Minnesota’s landscape.

“As it now stands, it is a little bit of the wild west,” Jay Stanley of the American Civil Liberties Union told a Minnesota legislative meeting Friday.

But it is not clear how much federal authorities would allow the state to do.

Federal Aviation Administration officials told lawmakers that the federal government has control of all aircraft. The FAA has approved a few commercial drone operations.

Washington officials are supposed to release preliminary drone regulations in a year, but many in the industry say they will not come until 2017.

The civil liberties’ group indicated its major concern is privacy, with drones continually watching citizens.

“We don’t want to live in a country where that is the new reality…” Stanley said. “Do we want to live in a world where there is a permanent, and aerial, record of everything we do?”

If federal rules continue to be delayed, aviation attorney Donald Chance Mark Jr. said, “I believe it is incumbent upon the states to act.”

The author of a strict drone bill that did not pass the Legislature earlier this year, Rep. John Lesch, D-St. Paul, said federal officials try to take over jurisdiction too often. “I am willing to push back on that.”

While it is unclear how far the state can go in regulating drones, there is general agreement legislators should have a say over how government agencies such as police departments could use them.

Jim Franklin of the Minnesota Sheriff’s Association said that drones may be used at some point, but they are too expensive now.

Law enforcement agencies in some places have used them, and more would like them available. Franklin said no Minnesota agency has used one.

Drone bills in other states, and those introduced in Minnesota, have concentrated on government regulation.

Most neighboring states do regulate drone use. Iowa, for instance, prohibits their use for traffic enforcement and Wisconsin prevents private citizens using drones in an area that people should expect to be private.

Much of the concern about drones is what House staff member Jeffery Diebel called “snoopy neighbors interested in your affairs.”

Sen. Ron Latz, D-St. Louis Park, said he is not sure whether drone bills can move through the Senate this year, given demands on passing a two-year budget. Senators did not consider bills last session, although Lesch’s bills were heard by House committees.

Drones already are used by many businesses, ranging from farmers to photographers.

While some businesses have federal permission to use drones, Mark said, “there are lot of illegal operators out there.”

Mark praised legislators for looking into the issue and encouraged quick action because the technology is developing rapidly.

Mark suggested that legislators consider whether drones should be registered, pilots licensed, training required and sizes limited.

“The only limitation, I think, is the limitation of the creativity of man,” Mark said. “There is a significant amount of potential abuse.”

Farmers are among the biggest drone users as they check fields.

Mark said many farmers have asked him: “Why can’t I use it on my own property?”

The answer is not clear, he said. If it is being used for commercial purposes, such as making money, it could require federal permission.

Attorney Jay Reding, a hobby drone pilot, said a farmer could buy a drone for less than $300 to survey fields to check on water, fertilizer, herbicide and other needs.

Le Sueur County, south of the Twin Cities, hires a drone company to inspect agriculture ditches.

Justin Lutterman, who oversees its operation, said that a traditional ditch check would take a week for each mile, while the drone takes no more than 15 minutes. And the drone, he said, can do it for a fraction of the cost.

Winter energy outlook good, without vortex

Reps. Pat Garofalo of Farmington, Chris Swedzinski

Minnesota is one polar vortex away from a winter energy crisis.

With a warm-up predicted for coming days, bitter cold may be a memory, but experts say propane and wood for heating and coal for generating electricity could be in short supply if this winter begins to look like last winter.

“We are at the whim of mother nature at this point,” Dave Christianson of the Minnesota Department of Transportation told the Minnesota Legislative Energy Commission Wednesday.

Christianson said that power plants’ coal supplies dipped to 10 percent of capacity earlier in the year, a situation blamed on crowded rail lines. Now, he said, coal stores average 30 percent to 40 percent of capacity and rail congestion has eased. If the weather cooperates, the stockpiles may build to more normal levels.

However, he and representatives of the wood and propane industries warned legislators that a repeat of last winter’s polar vortex deep freeze could lead to problems.

Many Upper Midwest power plants use coal from northeastern Wyoming’s Powder River Basin. In written testimony to the commission, BNSF Railway Co. reported that coal demand “suddenly reversed in 2013,” unexpectedly increasing and placing a new demand on the railroad to transport coal to power plants.

BNSF reported that it is working with customers to make sure they have sufficient coal, and have plans to expand capacity to improve coal delivery.

“They were faced with a traffic load they couldn’t handle,” Christianson said.

Some coal plant operators are preparing for potential brownouts or blackouts, Christianson said, in case a polar vortex visits the area.

The incoming chairman of a state House energy committee blamed part of the rail problem on North Dakota crude oil for taking up much of Minnesota’s railroad capacity.

Rep. Pat Garofalo, R-Farmington, said in an interview that ever-increasing numbers of trains loaded with oil from western North Dakota’s Bakken oilfield are crowding out coal, farm commodities and other goods.

However, he said, “this is a correctable situation.”

Garofalo and others in the Legislature, especially Republicans, are strong supporters of building more pipelines to move North Dakota and Canadian oil through Minnesota. He said pipelines are safer, less expensive and pollute less than moving oil over the rails.

Christianson said that if every proposed pipeline is built in the next few years, the rapidly increasing amount of oil coming from the Bakken would require the same number of railcars as today.

Nine or 10 trains, often 100 cars long, go through Minnesota each day full of crude oil, he said.

Propane supplies look better than last winter and wood supplies are down, the commission learned.

Executive Director Roger Leider of the Minnesota Propane Association said his industry is happy this year, but needs further work to avoid a propane shortage, and price spikes, like occurred last winter. He also warned that a return of last winter’s weather could produce a problem.

“We’re in a much better place than we were a year ago,” Leider said.

More propane storage at consumer locations, such as farms, and at sales outlets has helped, he said, but still more storage is needed. The propane industry may ask legislators to approve incentives, such as tax breaks, to encourage more storage.

While the propane situation has improved, a state Department of Natural Resources official said firewood is in short supply and expensive.

The DNR’s Mark Lindquist said that although evidence shows a short supply and high prices, “we are not even sure how much firewood is being used in the state.”

The Minnesota Pollution Control Agency estimates that 130,000 Minnesotans use wood for their primary heating supply, with a similar number using it as a secondary heat source.

Minnesota senators look to Wisconsin for workforce advice

Saxhaug

Stories of Minnesota manufacturers finding it difficult to fill jobs abound around rural Minnesota, and some state senators are looking at ways to help.

It may only take a little nudge to move businesses to taking action, a Wisconsin education leader Monday told seven members of a Minnesota Senate rural task force.

“There is a renewed interest in manufacturing,” Ann Franz of Northeast Wisconsin Technical College told the group, partially crediting a state-college-private partnership.

She said that although Wisconsin appropriated $15 million for training and helping people find jobs, money to improve school facilities has come from the schools and manufacturers.

Democratic Minnesota Sen. Tom Saxhaug of Grand Rapids, the task force chairman, said that there already are some parts of the state doing what Franz suggests, but task force members said they may suggest at least two steps to improve trade education in the state:

– Taking an inventory of all manufacturing education programs and equipment in Minnesota high schools and colleges.

– Hiring a state coordinator for trade education to make sure it is available where needed.

“We may have to spend some money,” Saxhaug said, quickly adding that “it will be in the thousands, not millions” of dollars.

The task force also will consider a bill providing state grants to improve manufacturing education.

Manufacturing plant officials across rural Minnesota say they have jobs open, but not enough trained workers to fill them. Many of the workers need skills such as welding before they can be hired.

Even if that worker gap is closed, many communities do not have adequate housing for the new workers. Saxhaug’s task force also may look into that issue before the new legislative session begins Jan. 6.

Saxhaug said that, besides training, manufactures and schools need to deliver a message to students: “If you want to stay in rural Minnesota, we have opportunities for you.”

About 18 percent of jobs in northeast Wisconsin’s 18 counties around her Green Bay campus now are in manufacturing, about twice the national average, Franz said.

The key in her area is that training as low as in elementary school uses the latest equipment, like what students will use when they get jobs. Old equipment does little good in the classroom, she said.

“Manufacturing is different than 20 years ago,” Franz said. “It is less manual labor.”

In Wisconsin, school students sometimes operate their own manufacturing businesses and use those profits to buy more modern equipment.

Since the school, state and manufactures began working together, she said, the number of students enrolled in welding classes at area technical colleges shot up from 193 to 506. In machine-related classes, numbers since 2006 have climbed from 180 to 483.

Democrats and Republicans on the task force appeared to be on the same page on trade education. They talked about encouraging companies to collaborate like in northeastern Wisconsin, leaving the state with relatively limited involvement.

Sen. Julie Rosen, R-Fairmont, said it will be an “easy sell” to businesses to get involved in educating workers, but the state may need to first pave the way.

Sen. Paul Gazelka, R-Nisswa, said Minnesota schools such as Central Lakes College already are working well with manufactures to provide training.

“We can help,” Gazelka said of state government, “but in the end it is a buy-in from the players.”

Minnesota elderly, disabled seek more state funds

Kett, Moriarty

Advocates for Minnesota’s elderly and disabled are back at the state Capitol asking for money on top of new funding they just received.

Legislators earlier this year granted a 5 percent increase to many programs for the elderly and disabled. Now, community-based programs for those groups want another 5 percent boost.

“It stopped the hemorrhaging,” state Sen. Kent Eken, D-Twin Valley, said Monday about the earlier increase, adding that more is needed.

“We haven’t been keeping up with inflation,” he said. “In fact, not even half.”

The bill Eken and Rep. Rod Hamilton, R-Mountain Lake, plan to introduce soon after the legislative session begins Jan. 6 would raise state aid 5 percent, with three-quarters of it required to be passed on to caregivers themselves, not used in administration or for other purposes.

The new bill would not include nursing homes, Eken said, which have received more money in recent years and will be back this year looking for more.

The 5 Percent Campaign, a coalition of groups supporting the increase, says 90,000 Minnesotans are under care of people who would get more money under the bill.

Joan Rothfuss, whose son is in a group home that would get more money under the bill, said a problem she sees today is that workers get too little money and thus leave the job for more pay.

“The solution is simple: If we pay caregivers more, they will stay on the job longer,” Rothfuss said.

Rothfuss and others at the 5 Percent Campaign announcement said that job turnover leads to inconsistent care.

Rosie Moriarty has a son who upon birth showed so many problems that he was not expected to live six weeks; he now holds a job, but remains under care. Moriarty is a professional caregiver for Melanie Kett, who now is wheelchair bound, in Mendota Heights.

Kett, a multiple sclerosis patient, and Moriarty’s son may have disabilities, but Moriarty said that does not make them “abnormal.” She said they have the same rights as others, and improving caregivers’ pay helps the disabled and elderly live better lives.

“It shouldn’t be a job where caregivers compete with McDonald’s,” Eken said.

Eken’s bill does not address where legislators would find money for the 5 percent increase.

The senator said that even though a $1 billion surplus was announced last week, it will be eaten up by inflation. So, Eken said, money could need to come from some state programs’ inflationary increases.

Eken

Rural health solution? Find new ideas

Franken

Perhaps some rural hospitals could just provide emergency room services, and drop full hospital services.

Maybe medical schools could recruit more rural students and government could increase money available to forgive student loans to people who practice in rural areas.

And it may be a good idea to stop paying medical providers just for performing medical procedures and, instead, pay them based on their success with patients.

Those and other ideas were the beginning of a conversation U.S. Sen. Al Franken, D-Minn., launched Friday with rural health experts as he tries to find fixes to a myriad of rural health care problems.

Franken expects the discussions with health experts to last throughout his new six-year term. He has been named co-chairman of the Senate Rural Health Caucus.

The newly re-elected senator met with eight rural Minnesota health leaders Friday, and they gave him a rundown of some major problems.

Ann Gibson of the Minnesota Hospital Association set the scene: 43 rural hospitals have closed nationally since 2010 and Minnesota rural areas soon will be 850 doctors short of the number needed.

Everyone delivered similar dire comments.

State Rep. Tom Huntley, D-Duluth, concentrated on nursing homes.

“Nursing homes in western Minnesota are reducing their beds … because they cannot hire people,” Huntley said.

When Franken asked why they could not find workers, the state legislator had a two-word reply: “North Dakota.” The oil boom there provides much higher paying jobs on that side of the border, Huntley said.

“Flipping burgers at McDonald’s is a lot more fun than taking care of patients,” added Dr. Raymond Christensen, who practices at the Gateway Family Health Clinic in Moose Lake and is on the University of Minnesota Duluth medical faculty.

When nursing homes pay low wages, Huntley said, it means rapid turnover and caregivers do not get to know residents and their needs.

Franken heard that rural Minnesota has a little surplus of nurses, but they frequently are hired away by Twin Cities facilities that pay more.

Technology is lacking in rural Minnesota, added Mark Schoenbaum of the Minnesota Health Department.

“There are exciting things going on in telehealth, unfortunately it is based in Sioux Falls, South Dakota,” he said.

Allowing doctors and patients to interact via video, and even doctors doing long-distance surgery, long has been discussed. However, Schoenbaum said, Minnesota health providers have little of that technology available.

The experts told Franken there is hope.

For instance, health care communities in Staples and New Ulm are among those that have broken down barriers and have effective health-care services, the senator heard. In New Ulm, the hospital, clinics and county public health officials have begun working together on health issues, such as heart care, instead of each entity doing things itself.

Ira Moscovice, director of the University of Minnesota’s Rural Health Research Center, was the one to suggest recruiting more health providers such as doctors from rural areas. He said those from rural areas are more likely to practice there.

Franken indicated that medical students’ loan forgiveness for working in rural areas has been successful.

President Jennifer Lundblad of Stratis Health, a nonprofit that seeks health care innovation, provided the potentially controversial idea of some rural hospitals concentrating on emergency services. An ER without a full hospital can meet many needs in a community, she said, and at a lower cost.

Franken said that it is time to look at how medical professionals are paid.

Pay based on what procedure is performed does not keep people healthy, he said. Instead, he suggested, perhaps medical personnel such as doctors should be paid based on how successful they are, such as if they cure a patient, not just treat them.

Making such a change, the senator said, would save money because patients would be less likely to need further care.

Franken said that the health caucus likely will produce some bills to help rural health issues and also will lobby federal agencies to make changes.

Political chatter: Some medical marijuana questions unanswered

Questions about medical marijuana remain, even as opposition to it has mellowed.

State officials are implementing a Minnesota law enacted earlier this year to allow two companies to grow, process and sell marijuana to patients with specific medical conditions.

For much of Minnesota, the big question centers on travel time. From extreme southwestern Minnesota, for instance, a one-way drive would be four hours to St. Cloud, the nearest place the medicine will be for sale.

Many greater Minnesota sales sites will not be open when selling medical marijuana becomes legal next July 1.

LeafLine Labs, which plans sales locations in Hibbing, St. Cloud, Eagan and St. Paul promises service in Eagan by next July 1, but only says the other three locations will open by July 21, 2016.

The other of two companies pledges to open all of its sales outlets next July 1. Minnesota Medical Solutions plans to make the sales in Moorhead, Maple Grove, Minneapolis and Rochester.

State law requires each company at least to open at least one sales site next year, but gives the companies another year to open other sites.

The Duluth News Tribune reported that Duluth residents will need to devote hours to getting marijuana medicine because they must drive to Hibbing.

“Any plans to one day set up shop in Duluth are on hold,” the newspaper reported. “Last month the Duluth City Council placed a six-month moratorium on any prospective medical marijuana facilities, providing time for city staff to consider how such businesses should be zoned and located in the community.”

For other parts of the state, officials did not think there would be enough patients seeking marijuana medicine to warrant sales sites there. However, they said that where patients live will be monitors and sites could be changed if needed. There also is talk about a mobile sales site, but that would require legislative action, as would adding any more permanent sites.

Another question is whether the two companies will be able to meet demand. No one knows how many Minnesotans will seek medical marijuana; estimates range from 5,000 to 15,000.

State law says: “A manufacturer of medical cannabis shall provide a reliable and ongoing supply of all medical cannabis needed for the registry program.” However, a Health Department official said that if more patients show up to buy the medicine than expected, they probably will get the product on a first-come, first-served basis.

Few appear to be asking, or answering, yet another question: Where do the two companies obtain seeds or seedlings for marijuana plants?

One state official joked that it was “immaculate conception.”

Growing marijuana is illegal in Minnesota, other in the two companies’ facilities, and it is against federal law to transport marijuana across state lines.

Rural lawmakers dominate

It probably is no surprise the new Minnesota House Republican leadership team is packed with rural lawmakers.

After all, Republicans regained control of the House in last month’s elections because of rural wins.

Speaker-designate Kurt Daudt of Crown and Majority Leader-elect Joyce Peppin of Rogers announced the leadership team, topped by Rep. Dan Fabian of Roseau as majority whip. The whip’s job is to make sure GOP members get needed information during debates in the House chamber.

Four of the six assistant majority leaders are from greater Minnesota: Dave Baker of Willmar (elected for the first time in November), Deb Kiel of Crookston, Ron Kresha of Little Falls and Chris Swedzinski of Ghent. Also assistant leaders, from suburbs, are Tim Sanders of Blaine and Kathy Lohmer of Stillwater.

Baker, a businessman, downplayed the rural orientation of the team.

“Minnesotans in all parts of the state share similar priorities such as job creation, improving access and quality of care for our seniors, and prioritizing funding for roads and bridges,” he said. “Focusing on these issues will improve life for families in the metro, the suburbs and here in Greater Minnesota.”

Klobuchar on team

U.S. Sen. Amy Klobuchar has been named to the leadership team of an organization that advises Democratic Senate leaders.

The Minnesota senator joins the Democratic Policy and Communications Center’s leadership. It is led by New York Sen. Chuck Schumer.

Seniors want tough laws

Older Minnesotans say they want tougher driving laws, even on themselves.

A AAA Foundation for Traffic Safety survey indicates that aging drivers generally support proposals that Minnesotans 75 and older renew driver’s licenses in person and more than 70 percent want to require seniors to pass medical screening tests to keep their licenses.

E-cigarettes banned

Minneapolis has joined several other Minnesota cities and counties to ban electronic cigarettes from all indoor public places as well as where people work.

Basically, the new ordinance applies the state tobacco cigarette ban to e-cigarettes.

State lawmakers debated the issue, but did not enact a strict ban like tobacco smokers face.

Renovation relief

The multi-year state Capitol renovation created one major problem for the few people still working there and any visitors who can get inside: where to find a restroom.

Nearly all Capitol restrooms are in construction areas and closed. So a memorandum delivered Friday is the best news yet: “Temporary heated restrooms available outside the ground floor south entrance.”

Inflation eats away surplus

Lots of charts

The Minnesota state budget surplus sits at $1 billion, but not really.

While state officials said a Thursday economic and budget report was good news, Minnesota’s top finance official said that inflation will eat up what many called a surplus. Still, political leaders agreed that the added money, unlike deficits they often have been dealt, will make budgeting easier when legislators return to St. Paul Jan. 6 and that no overall tax increase will be needed.

“Inflation is essentially everywhere,” Commissioner Jim Schowalter said of the state budget, and the $1 billion “surplus” mostly will be used to counteract it in the state’s two-year budget that begins next July 1.

“Yes, if you add in inflation, it evens out,” his boss, Gov. Mark Dayton, said.

However, Dayton and most other political leaders said Thursday’s report was good news and the governor insisted there is a surplus.

After raising taxes more than $2 billion in 2013, Dayton said that he sees no need for a general tax increase. On the other hand, the Democratic governor said that some type of new revenue is needed to inject needed money into road and bridge budgets.

House Speaker-designate Kurt Daudt, R-Crown, said that he does not think higher taxes will be needed for transportation, although all ways to increase transportation funding “are on the table.”

Dayton said that what he called a “surplus” could help fund some child care tax credits, increased broadband facilities across greater Minnesota and other needs.

As soon as the $1 billion surplus was announced, groups ranging from the University of Minnesota to those representing nursing homes said they need some of that money.

Part of the $1 billion is $373 million that is not being spent in the current budget and can be spent in the next two years. State law automatically requires another $183 million to remain in the reserve and not be folded into the next budget.

The news gives Dayton a benchmark as his administration works on a budget proposal that he plans to give legislators Jan. 27. The Republican-controlled House and Democratic-controlled Senate will draft their own budget plans, most likely based on the Dayton budget, after another revenue report in late February or early March. Dayton will tweak his budget after that report.

Thursday’s report, known as a budget forecast, takes a look at the national and state economies and predicts how much is available to spend on state programs.

The state general fund budget has grown from $31.5 billion in 2006-2007 to $40 billion now. It is expected to top $40 billion for the two years beginning next July 1, a figure state lawmakers and the governor will work out in the legislative session that begins Jan. 6.

The general fund budget is that part of state spending funded by Minnesota taxpayers. When federal and other funds are included, the state’s total spending can be twice the state-funded total.

While Democrats, who have controlled the Legislature and governor’s office the past two years, were celebrating Thursday’s report as good news, Republicans had their doubts.

Daudt said that the state is bringing in more money, but Minnesotans’ personal budgets do not appear to be improving.

The Minnesota economy is closely tied to national trends, State Economist Laura Kalambokidis said. That includes a worse-than-expected housing market, which affects industries across greater Minnesota such as lumber and window makers.

Senate Majority Leader Tom Bakk, D-Cook, said that he hopes the budget cushion announced Thursday gives lawmakers a chance to work on one of greater Minnesota’s most pressing issues: housing.

Industries located in communities from Roseau in the north to Jackson in the south say they have jobs available, but need housing for workers, and in many cases potential workers need more training.

Most of the state’s key political leaders specifically said after Thursday’s budget forecast that it means no overall tax increase will be needed. However, Dayton emphasized what he sees as the need to raise revenue for transportation.

While he said he is open to ideas about how to raise that revenue, one possibility he has discussed would be to add a tax on gasoline at the wholesale level. The current gas tax is added at the pumps.

Daudt, whose Republican candidates this fall campaigned on improving roads and bridges, said he is not convinced higher taxes are needed. He and other Republicans have said they prefer to cut other state programs that may not be needed and transfer those funds to transportation.

In general, state political leaders were waiting for the budget forecast to draw up specific proposals.

Besides transportation, Dayton specifically mentioned the need to fund expansion of high-speed Internet, known as broadband, across the state.

Broadband, he said, is “crucial for economic development over the state.”

Dayton and legislators this year approved a down payment for improving broadband access, but some projections indicate that billions of dollars more are needed to bring greater Minnesota to the same level as the Twin Cities.

 Key budget numbers

in next two-year budget

$1.037 billion: More money expected than earlier projections

$412 million: Lower revenues expected than earlier prediction

$502 million: Expected drop in overall state spending

$443 million: Less spending needed than expected in health programs

$2 billion: Expected gain in individual income tax receipts

$598 million: Expected increase in sales tax collections

Bakk

Dayton

Daudt

State economist

$1 billion state budget surplus predicted

Minnesota legislators and governor will have a bit more to spend in the next two years.

State officials announced this morning that better-than-expected revenues are expected to give the state budget $1 billion more than previous predictions. Revenues are expected to be up compared to a February version of the revenue report.

A summary of a report due out later today shows that total revenues are expected to be $41.9 billion, 4.8 percent higher than the current budget.

Part of the $1 billion revenue expectation is $373 million not being spent in the current budget and can be held over for the next budget. State law automatically requires another $183 million to remain in the reserve and not be folded into the next budget.

The news gives Democratic Gov. Mark Dayton a benchmark as his administration works on a budget proposal that he plans to give legislators Jan. 27. The Republican-controlled House and Democratic-controlled Senate will draft their own budget plans. Another revenue report in late February or early March will lead to tweaks in early budget plans.

The report, a short summary released two hours before the full report was made public late this morning, takes a look at the national and state economies and predicts how much more is available to spend on state programs.

November budget forecasts in recent years have had their ups and downs, with mostly deficits in the first 10 years of the 2000s and mostly surpluses since then. At times, budget forecasts in late February or early March have shown dramatically different results, and those reports are the ones used to develop final state budgets.

The state general fund budget has grown from $31.5 billion in 2006-2007 to $40 billion now. It is expected to top $40 billion for the two years beginning next July 1, a figure state lawmakers and the governor will work out in the legislative session that begins Jan. 6.

The general fund budget is that part of state spending funding by Minnesota taxpayers. When federal and other funds are included, the state’s total spending can be twice the state-funded total.

Political Chatter: It will be an orange cone session

By Don Davis

The orange cone, that construction icon, could be featured during the upcoming Minnesota legislative session.

An extensive ongoing renovation projects has all but taken over the state Capitol.

“It is going to be like a major highway project,” Gov. Mark Dayton said about the disruption Minnesotans visiting the Capitol will experience.

Just how big a problem it will be is anyone’s guess, he added. “I don’t know if anyone fully grasps it.”

Dayton was describing the disruption from his temporary office at the other end of the mall from the Capitol, talking to Capitol press corps reporters who more than a year ago were ousted from their Capitol basement offices to a building a couple of blocks away.

“It will be a very different experience … but we will make it,” he proclaimed.

During the 2015 legislative session that begins at noon Jan. 6, the House and Senate chambers will be open. But just three of six Senate committee rooms will be available, likely forcing schedulers to plan earlier and later meetings, as well as some on Fridays and Monday mornings that often are reserved for senators to travel home and back.

All House committee rooms are in another building and not affected by renovation work.

Representatives of both parties and Republican senators are in the other building, so will not be affected by construction work. But Democratic senators are housed in the Capitol and since most of that building is closed they and some staffers will be crammed into a much smaller space.

Many staffers have been moved to other buildings.

The big impact for the public will be, quite simply, lack of space.

In other years, groups rallying for or against some legislation, or just a general principle, often have gathered inside the Capitol and then dispersed to lobby lawmakers. There will be no space large enough for rallies next year, and probably not even enough room for large crowds to move around.

It is typical for the Capitol to host hundreds of people for committee meetings dealing with controversial topics such as gun control or abortion. It is not clear how those throngs will be handled next year.

In 2016, the theory is that the Senate chamber will be closed and action will move to a controversial office building now being built across the street. Senators are supposed to be housed in the new facility by then and a large committee room could replace the Senate chambers that year.

The only part of the Capitol open in 2016 likely will be the House chamber.

The normally ornate Capitol today features a good many plywood walls after construction workers isolated much of the building, including the rotunda where many events were held. The Great Hall, another favored location, also will be under construction and closed.

Forecast a biggie

Thursday likely will come and go with Minnesotans noticing little.

But their state officials will be neck deep in numbers that will tell them how much money they can spend in the next two years.

Thursday is when state finance officials release what they call a “budget forecast.” That is a report looking at the state and national economies and how it could affect state revenues, such as taxes.

The report forms the foundation of a two-year budget, probably in the $40 billion range, that Gov. Mark Dayton and legislators must adopt before July 1.

Dayton told reporters that preliminary indications some time ago were that the state will have a $635 million surplus for the next two years. However, he added, state rules forbid finance officials from telling him in advance what the Thursday forecast says.

Countrywide, economic projects show a slower economy than was predicted at the last budget forecast in February, but Dayton said that Minnesota is doing better than that.

While his staff and commissioners have been working on the budget, Dayton said he will not go at it “full bore” until he returns from a Thanksgiving trip to see family in California.

He promised to meet his Jan. 27 deadline of presenting a budget proposal to lawmakers.

New faces?

It appears a safe bet that some key aides soon may be missing from the Dayton administration second term.

“I asked most to stay,” the governor said about his commissioners and other keystones of the administration.

When a reporter asked if that meant he asked some to leave, he said that “if I didn’t ask them to say,” then let reporters’ imaginations take over.

While promoting the state’s turkey industry, Dayton revealed that Agriculture Commissioner Dave Frederickson is sticking around another four years. Commissioner Tony Sertich of the Iron Range Resources and Rehabilitation Board was the first to announce he is leaving the administration after Dayton was re-elected to another term.

Dayton said that he was thrilled that Lee Sheehy will continue to be chairman of the Minnesota Commission on Judicial Selection, a board that recommends judicial candidates to the governor.

Dayton did not talk about specific potential changes. “There is a degree of flux.”

Minnesota divided over Internet

By Don Davis

Minnesotans only need to look at the first two counties on an alphabetical list to understand the Internet disparity between rural areas and those in big cities.

Recently released figures show that just 0.06 percent of the rural northern Minnesota Aitkin County households are served by high-speed Internet service, also known as broadband, that meets the state speed goal. Not too far away to the south,, 97 percent of northern Twin Cities suburban Anoka County homes are served by fast Internet.

The report by Connect Minnesota shows greater Minnesota-large city disparities as well as differences among the state’s mostly rural counties.

While such disparities may just frustrate an online gamer, they can cost rural businesses money.

“It’s a big need [and the] one problem we have,” Justin Dukek of Captive Advertising in north central Minnesota’s Bagley said in a recent Greater Minnesota Partnership meeting. “For a lot of our design work, we need to communicate with customers. It’s frustrating because we want to be here.”

State officials heard that message from across the state and earlier this year provided $20 million in grants that will be awarded soon to parts of the state, mostly in rural areas, that experience slow Internet speeds. The private Blandin Foundation also provides assistance.

Officials say more than $3 billion in private, foundation and government money is needed to bridge the state’s digital divide.

Connect Minnesota Program Manager William Hoffman said private organizations such as cooperatives, telephone companies and cable television firms in many places have stepped up with their own money to expand fast broadband. That makes for the differences among rural counties.

“In some cases, the providers have made the investment to offer those speeds and higher and for others there hasn’t been that investment,” Hoffman said.

“Without question, it has been private investment” that allowed for rural broadband progress so far, Hoffman said.

Executive Director Danna MacKenzie of the newly established state Office of Broadband Development said high-speed Internet service is spotty. “We have some pockets of very well served areas in this state,” she said, while others are lacking.

An example comes from west central Minnesota.

Connect Minnesota reports that 16 percent of Douglas County homes have access to the state minimum Internet speed. Stevens County, adjoining Douglas to the southwest and home to the University of Minnesota Morris, reports 99 percent availability.

The biggest difference is speed of services between greater Minnesota and the Twin Cities. Overall, 63 percent of greater Minnesota homes have access to 10 megabits per second download speed (downloading data from Internet) and 6 Mbps upload speed (uploading data to Internet), the standards legislators put into law as the slowest acceptable speed. Across the state, including the Twin Cities, 78 percent of homes can get a fast connection.

Rural counties such as Aitkin may not meet the goal set in law, but most residents still have broadband access. In Aitkin, for instance, nearly 72 percent of the homes have access to speeds a fraction of the goal in that law.

Lawmakers established the 10-6 goal because that speed “will allow the vast majority of people do the vast majority of things they want to do,” Hoffman said. “That’s today.”

Even so, that is slow for many of today’s needs, not to mention speeds needed in the future as everything from garage doors (for checking remotely to make sure it is closed) to thermostats (allowing a warm welcome home) will be connected to the Internet.

MacKenzie said the $20 million in grants her department is about to distribute will go to establish broadband service at least 100 Mbps upload and download speeds.

“We are moving toward a society where we want everybody to be creators and not just consumers,” she said, which means people especially need faster pipelines to upload data to the Internet. The emphasis often has been placed on downloading data.

Minnesota ranks 23rd in overall Internet speed, although many with faster speeds are much more compact states, such as Delaware. One of Minnesota’s goals is to be in the top five of broadband speed and access.

Speeding up the Internet is only fair for Minnesotans, Chairwoman Margaret Anderson Kelliher of the Governor’s Broadband Task force said in a report to lawmakers earlier this year.

“Access to high-speed connections across Minnesota is a matter of economic justice, fairness, and opportunity for all Minnesotans,” the former state House speaker said.

Broadband advocates such as Public Policy Director Bernadine Joselyn of the Blandin Foundation, which provides rural Minnesota needs with a variety of financial assistance, say they are optimistic.

“We’re getting closer, and we’re more inspired than ever,” Joselyn said. “We see some amazing leadership coming from communities and the state, and we’ll need that as Minnesota works to achieve its broadband goals.”

Hoffman said that with recent emphasis on the subject, “Minnesota, I think, is positioned well … to have a real focus on broadband issues.”

State picks medical marijuana makers

Dr. Gary Starr of LeafLine

By Don Davis

Minnesota officials today announced two companies that will grow marijuana and process it into medicine.

Production facilities will be in Cottage Grove and Otsego, the state Health Department said, with distribution facilities elsewhere in Minnesota.

A law passed earlier this year allows patients to begin receiving medical cannabis, the official name of medical marijuana, for specific conditions in liquid, pill or vapor. Using the plant itself, including smoking, remains illegal.

“Our goal is to safely provide medical cannabis products to patients with qualifying conditions by the deadline of July 1, 2015, and our attention over the next few months will be on working with these two manufacturers to implement the program and safely grow, process and distribute the products,” Health Commissioner Dr. Ed Ehlinger said.

LeafLine Labs, partially owned by the Bachman’s floral family, will be headquartered in Cottage Grove. A distribution center is planned for Eagan next year, with sites in Hibbing, St. Cloud and St. Paul opening by July 1, 2016.

Groundbreaking on the Cottage Grove facility is expected this month.

The other manufacturer Ehlinger approved is Minnesota Medical Solutions, which already has facilities built in Otsego and is expected to begin growing plants this week. Patients are expected to be able to buy its products beginning next July in Rochester, Maple Grove, Minneapolis and Moorhead.

Before distribution centers open, they must receive local government approval.

Dr. Gary Starr, co-founder of LeafLine, said that last week he treated a 75-year-old women who might have benefited from medical marijuana.

“She was in severe pain,” he said, but “I could not solve the problem” with medicines now available.

Minnesota is the 22nd state to approve use of medical marijuana, a decision that came in the Legislature amid controversy because some doctors doubted whether it should be legalized and some law enforcement officers feared that inadequate security could lead to marijuana plants being available to Minnesotans.

Starr said that enough research has been done to prove that the product can be effective for symptoms listed in state law. Both companies emphasized security measures are in place.

Patients who are interested in receiving treatment must be certified by their doctors or other health care providers to have a specific condition that state law allows to be treated by medical marijuana:

– Cancer associated with severe and chronic pain, nausea or severe vomiting or severe wasting.

– Glaucoma.

– HIV and AIDS.

– Tourette’s syndrome.

– Amyotrophic Lateral Sclerosis (Lou Gehrig’s disease).

– Seizures, including those characteristic of epilepsy.

– Severe and persistent muscle spasms, including those characteristic of multiple sclerosis.

– Crohn’s disease.

– Terminal illness, with a life expectancy of less than one year, if the illness or treatment produces severe and chronic pain, nausea or severe vomiting or severe wasting.