Legislative Notebook: House OKs Jobs Bill

By Danielle Killey and Don Davis

House members approved a jobs bill 75-57 Monday that funds job training, tax cuts for employers and other economic development measures.

Investing in jobs and economic development are top priorities for Minnesotans, House Majority Leader Erin Murphy, DFL-St. Paul, said. “So much of our future is based on that.”

The budget target for jobs spending increased by more than 50 percent over that of the last budget, bill author Rep. Tim Mahoney, DFL-St. Paul, said. It was the first overall budget bill of the session to get a vote by the full House, after about five-and-a-half hours of debate.

At $139.75 million, the bill includes about $5 million more than the governor’s recommendation for Department of Employment and Economic Development.

The bill has $20 million for the Minnesota Investment fund and $18.5 million for the Job Creation Fund, both DEED job creation efforts. It also would fund a job skills partnership designed to train current workers when a business wants to expand or add new technology.

Under the bill, “there is no question the money will be there” for people seeking job training, Mahoney said.

It also includes a controversial provision allowing locked-out employees to collect unemployment for the duration of the lockout, up to three years.

“The impetus of the provision is really about compassion,” Rep. Joe Atkins, DFL-Inver Grove Heights, said.

Some Republicans said the lockout provision is problematic.

“That totally shifts the negotiating balance between business and labor,” Rep. Greg Davids, R-Preston, said.

Rep. Steve Drazkowski, R-Mazeppa, said it “pays people not to work.”

“I believe it would make labor disputes last even longer,” Rep. Denny McNamara, R-Hastings, said. “This is taking one side in a dispute and that’s not right.”

Lawmakers added a change Monday that would exclude professional athletes locked out from sports teams from the provision. Those who made $150,000 or more the year before also would not be eligible for the benefits under a change successfully added by Drazkowski.

The bill includes a tax cut for employers, estimated to save them almost $350 million over the next two years.

Mahoney proposes opening three more trade offices throughout the world, bringing the total to four.

Republicans said the bill will hurt businesses and does little to create private-sector employment.

“This is a jobs bill if you believe the government creates jobs,” Minority Leader Rep. Kurt Daudt, R-Crown, said.

The bill also includes housing provisions, such as $32 million for housing programs and $3 million for homeless youth services.

Senate proposes surcharges

Senate Democrats suggest adding surcharges on nursing homes and health maintenance organizations to help make up for a $150 million cut to state health programs ordered by legislative leaders.

A bill unveiled Monday by Sen. Tony Lourey, the Senate health and human services finance chairman, would add an $80 million surcharge on health maintenance organizations and $16 million on nursing homes in the next two years.

The budget also caps how much can be spent on managed care programs, an expected $53 million savings.

The health and human services budget — which mostly goes to provide health care for the poor, disabled and elderly — would top $11 billion. That only is smaller than public school spending in the state’s proposed $38 billion, two-year budget.

In his bill, Lourey, DFL-Kerrick, suggests transferring more than $400 million out of the Health Care Access Fund for other uses.

“Our committee was given a difficult task this session as the Legislature looks for savings within the budget for health and human services,” Lourey said. “This legislation doesn’t represent what I had hoped for as we started this session, but I believe this bill meets its target and still protects our most vulnerable populations.”

Bill increases oversight

Legislators would watch state-run colleges and universities closer under a bill House Democrats support.

The bill, which funds higher education, also would keep tuitions in check and help reduce student debt, House Higher Education Chairman Gene Pelowski, DFL-Winona, said.

“This bill focuses those new resources largely in two areas — tuition and debt — so we can put our resources into areas that directly benefit the students,” said Pelowski, whose bill funds University of Minnesota and the Minnesota State Colleges and University systems as well as a state tuition grant program.

State higher education funding has shrunk in recent years, but the House bill ups spending by $150 million in the next two years

House and Senate committees met separately Monday to discuss their own versions of higher education spending measures. They two chambers offer similar plans, both concentrating on tuition freezes.

The Senate plan would appropriate about $1.2 billion each for the University of Minnesota and Minnesota State Colleges and Universities systems, while the House gives about $1.1 billion each. Total higher education spending would be $2.8 billion for the next two years in the Senate bill and $2.7 billion in the House. Gov. Mark Dayton calls for $2.8 billion.

The full House and Senate plan to vote on their plans in the next couple of weeks, sending the slightly different bills to a conference committee, where the two bills and Dayton’s plan can be merged.

Two years ago, the Legislature made record cuts to the state higher education budget, after several years in which colleges and universities lagged other parts of state government. Tuition has nearly doubled at state colleges and universities in the past decade.

Besides adding money, Pelowski’s bill extends legislative oversight. He said the changes are designed to better hold state schools accountable for budgeting practices that have come under fire for high administrative costs and excessive compensation for top administrators.

“The work in our committee showed a clear need for the Legislature to have a greater role in the oversight of how the U of M and MnSCU are spending public and tuition-raised dollars,” Pelowski said. “We found that administrative costs and salaries are growing at an unsustainable rate and students are paying the price with higher tuition and debt. That is unacceptable.”

Transportation budget rolls on

All Minnesota counties would be able to charge up to $10 each year per vehicle to fund road and bridge projects under the House transportation bill a committee moved forward Monday.

The fee would be paid by vehicle owners when renewing license tabs. Twin Cities metropolitan area counties already can impose the tax, but the bill expands it to include the whole state.

The proposal also would allow counties to impose a half-cent sales tax for transportation projects without requiring residents to vote on it.

“I think this is an important tool in the toolbox for local governments,” Transportation Finance Committee Chairman Rep. Frank Hornstein, DFL-Minneapolis, said. He said the bill would help local infrastructure projects happen.

Both the House and Senate transportation budget proposals were scaled down after Gov. Mark Dayton said he would not support a gasoline tax increase. That left some members disappointed with the scope of the bill.

“It falls woefully short of meeting the well-documented needs” of transportation in the state, Rep. Clark Johnson, DFL-North Mankato, said.

“This isn’t the bill I hoped to put forward,” Hornstein said, but added he thinks there still is time for changes.

“I believe we still have some important opportunities to get it right,” he said.

The $5.19 billion budget over the next two years would fund local road and bridge projects, state construction, transit, airports and other transportation needs.

The Transportation Finance Committee moved the bill forward on a voice vote to the House tax committee.