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Forum News Service Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers that serve the state.

North Dakota may lose $4 billion of taxes as oil prices drop

By Mike Nowatzki

BISMARCK, N.D. – A revised state revenue forecast presented Thursday to North Dakota lawmakers predicts the effects of sagging oil prices will cause oil and gas tax revenue to drop more than $4 billion over the next two years compared with the December forecast used in the governor’s budget proposal.

The House Appropriations Committee voted 22-1 to adopt the new forecast, which will be used for budgeting purposes until the next forecast is released in March.

“These numbers are closer to realistic of what’s going on right now than what the governor’s budget had in it,” said Rep. Jeff Delzer, R-Underwood, the committee’s chairman.

Legislative Council budget analyst Allen Knudson, who presented the forecast, said the assumptions were based on discussions with the state tax department, the Industrial Commission’s Oil and Gas Division and the oil and gas industry.

The forecast projects oil and gas tax revenue will be down nearly $762 million for the remainder of the 2013-15 biennium, which ends June 30, and $4.05 billion during the 2015-2017 budget cycle, compared with the December forecast.

That assumes a crude oil price of $42 a barrel for the rest of this biennium and a range of $45 to $65 a barrel during the next biennium, with oil production remaining constant at 1.2 million barrels per day. The price for West Texas Intermediate crude was hovering around $45 a barrel Thursday morning, and the wellhead price for Bakken crude is typically discounted up to $10 below the WTI price.

The forecast also assumes that an oil price “trigger” exemption based on crude prices being below $55 a barrel for a single calendar month will be in effect between February and May, reducing oil extraction tax collections by $46 million. A “big trigger” exemption based on prices being below $52.59 a barrel for five consecutive months also is predicted to be in effect from June to March 2016, resulting in an $883 million drop in oil extraction tax collections in 2015-2017.

Compared with the December forecast, general fund revenue would be down $130 million for the rest of this biennium and $550 million in 2015-17.

Changes to ongoing spending proposed in Gov. Jack Dalrymple’s budget would leave the general fund with a shortfall of $128.6 million, based on the new forecast. That assumes lawmakers will approve the governor’s proposed $100 million in individual income tax relief and $25 million in corporate income tax relief.

When adding the impacts of proposed legislation, “There would potentially be a shortfall of a little over $1 billion if you were to approve everything that’s out there,” Knudson said.

Loan forgiveness could attract health professionals to rural areas

Rural Minnesota is short of medical professionals, and many health advocates are lining up behind a proposal to partially forgive student loans of graduates who practice in rural areas.

“This can bring needed resources to our rural and frontier communities,” Shauna Reitmeier of Northwestern Mental Health Center in Crookston told a Senate committee Wednesday before members unanimously approved a loan forgiveness bill.

Several other committees must consider the bill before it reaches a full Senate vote.

Dr. Sarah Eisenschenk, who grew up near Avon, Minn., said she plans to locate in rural Minnesota once she finishes her residency. She will face more than $200,000 of school debts, she said, and a loan forgiveness program “will certainly influence my decisions.”

State Sen. Greg Clausen, D-Apple Valley, is the sponsor of the Senate Democrat’s third highest priority bill, one to expand the current medical professional loan forgiveness program.

“We are not keeping pace with workforce needs,” Clausen said.

While doctors, dentists and pharmacists are among those who can get loans forgiven now, the Clausen bill adds mental health professionals, public health nurses and dental therapists to the list. The senator said the addition would provide another 60 professionals to rural Minnesota.

Existing loan forgiveness provisions would get more funding, enough for 280 other medical professionals to receive loan help.

The Clausen bill would provide $3 million a year for the loan forgiveness program.

Mark Schoenbaum of the Minnesota Health Department said that the federal government designates “almost the entire state” as underserved by mental health professionals, dentists and primary care doctors, especially in rural areas with some in the inner cities of St. Paul and Minneapolis.

Existing loan forgiveness programs that are more limited than what Clausen proposes show that the concept “does fairly convincingly attract medical professionals to the locations they are most needed,” Schoenbaum said.

Several people testifying to the committee urged Clausen to expand his bill to include more health professionals.

Also Wednesday, a state Health Department report indicated that immigrant doctors are not being well used to serve primary medical care, especially in areas where doctors are in short supply.

A task force that studied the situation since July reported that doctors from other countries “would help with increasingly urgent policy issues, such as a physician shortage, an aging population, persistent health disparities, the needs of a diversifying population and mounting health costs.”

Up to 400 unlicensed immigrant doctors live in Minnesota, the report indicated. Most are trained as primary care physicians, but they are not allowed to practice in Minnesota.

Besides providing more doctors for Minnesotans who are underserved, the report said that immigrant doctors could lower state costs millions of dollars a year by catching health issues earlier than happens now with a doctor shortage.

The task force suggested that health leaders work on ways to get immigrant doctors licensed in the state.

“This task force has thought creatively about this problem and brought us feasible and groundbreaking strategies that could fortify our physician workforce for years to come,” state Health Commissioner Dr. Ed Ehlinger said.

Education-focused Dayton budget covers a wide range of issues

Dayton

Minnesota Gov. Mark Dayton’s two-year budget plan would pump more than a half billion dollars into education, increase the number of food inspectors by 26, add facilities at some parks, fund better supervision of child abuse programs, improve railroad crossings and provide hundreds of other changes.

He would do it without a general tax increase.

Dayton’s increased spending, which would bring the budget that begins next July 1 to about $42 billion, comes from a $1 billion surplus.

The surplus, announced late last year, normally would have been taken up by state agencies paying for higher wages, utility bills and other inflationary costs. However, Dayton said, he wants agencies to absorb most of that inflation by taking money-saving measures such as leaving jobs open.

Dayton surprised no one by making education his top fiscal priority, as he has since he ran for governor in 2010. He proposes setting aside $418 million of the budget for education through high school and $93 million for higher education.

“Minnesota’s future success — and health of our families, the vitality of our communities and the prosperity of our state — will depend upon our making excellent education available to all Minnesotans,” Dayton said. “That is exactly what my budget proposal aims to do.”

Commissioner Myron Frans of Minnesota Management and Budget said the state is in better fiscal state than it has been for years. Many state officials expect a new state revenue report due in a month to show a larger surplus, and thus giving legislators and Dayton more money to spend.

The budget continues a modern-day trend, broken just once, of increasing the budget each year. The current two-year budget is $39.6 billion.

After Dayton, a Democrat, and the Democratic-controlled Legislature raised taxes $2 billion two years ago, there was little change in taxes in this Dayton budget.

“We are in a position where we can meet the needs without a general tax increase,” Dayton said.

The governor’s budget plan will be used at the basis for legislators to draw up their own spending plans. However, those will not come until after a new report on the state’s economy and expected tax revenues, tentatively scheduled for Feb. 27. Dayton also will revise his budget proposal after the report and propose a public works bill funded by the state selling bonds.

One item not in the Dayton budget drew the ire of nursing home advocates and Republicans.

The Long Term Care Imperative, representing facilities such as nursing homes, issued a statement saying members were disappointed that Dayton did not include more funds for their cause.

“As 60,000 Minnesotans will turn 65 this year, and next year, and until at least 2031, the demand for care will continue to grow,” the imperative statement said. “We need to start the conversation immediately about how we are going to address the care of aging Minnesotans.”

House Republicans won the majority in November’s election by winning Democratic seats in rural areas, where the most nursing home fiscal problems are found. House Speaker Kurt Daudt, R-Crown, said he was not happy that Dayton skipped increasing funding for them.

Dayton said that nursing homes have received $93 million in new founds in the past four years, so opted not to include new funding in this budget. However, he said in response to a reporter’s question, nursing home funding will be near the top of his priority list if the Feb. 27 report shows a bigger surplus.

Overall, Republicans were critical that Dayton wants to increase spending as much as he does.

Daudt said that if Dayton’s budget were to be adopted, its increased spending would cost every Minnesotan $1,244.

Democrats were happy with the Dayton plan.

“Gov. Dayton’s budget proposals reflect the values and priorities all Minnesotans share,” Senate Majority Leader Tom Bakk, D-Cook, said. “I am pleased his budget proposal funds a comprehensive transportation plan, invests in our youngest learners, supports economic and workforce development initiatives, and maintains the balanced budget in the years ahead.”

Dayton took the rare step of withholding new money from the Minnesota State Colleges and Universities system until a dispute between faculty and the administration is settled.

The money would have gone to allow MnSCU continue a tuition freeze. The governor proposes to give the University of Minnesota $93 million more to continue its freeze.

The MnSCU controversy centers on an initiative, Charting the Future, established by Chancellor Steven Rosenstone. Seven faculty organizations have passed “no confidence” votes against Rosenstone for the initiative, which is designed to streamline the system.

MnSCU leaders on both sides of the dispute said Tuesday that they are working toward an agreement.

Youth-related programs and health and human services spending account for 75 percent of Dayton’s new proposals.

Featured in his education funding plan is providing free pre-kindergarten programs to 4-year-olds.

Education Commissioner Brenda Cassellius said the programs will be voluntary for school districts, and local officials could decide what schools would offer the programs.

Dayton also would put more money into general public school needs and he wants $100 million available for child-care tax credits that can be used for working families.

The Dayton budget plan also would spend:

– $30 million to improve broadband Internet service, mostly in rural Minnesota.

– $33 million gained from a railroad assessment would help improve rail safety, mostly on tracks that carry North Dakota oil. He also plans to ask legislators to approve borrowing $43 million for rail safety (mostly to improve rail crossing in the Prairie Island Indian Community, Willmar and Moorhead).

– $10 million to buy two used airplanes for state use, replacing two aging ones that need more maintenance than they are worth. He said the state will reduce the number of airplanes and helicopters it owns.

– $2.5 million to improve oversight and training for county public health workers dealing with child abuse. Human Services Commissioner Lucinda Jesson said more money may be needed after a series of recommendations is released in March.

Also folded into the budget is money for more Agriculture Department food inspectors: 11 wholesale food inspectors, 10 retail inspectors and five meat inspectors.

Natural Resources Commissioner Tom Landwehr said parks and trails would receive $7.2 million more, going to things such as new facilities at state parks.

The budget plan Dayton released Tuesday is for state programs funded by general tax revenues. However, when transportation, federally funded state programs and other initiatives are considered, the all-accounts budget can nearly double the state taxpayer-funded portion.

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Some examples of two-year budgets over the years:

– 1964-1965, $770 million

– 1974-1975, $3.5 billion

– 1984-1985, $9.8 billion

– 1994-1995, $16.7 billion

– 2004-2005, $28.1 billion

– 2006-2007, $31.5 billion

– 2008-2009, $33.9 billion

– 2010-2011, $30 billion

– 2012-2013, $35.3 billion

– 2014-2015, $39.6 billion

– 2016-2017, $42 billion

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How the governor’s proposed budget funded by general tax revenues would be spent:

– Public school education: 42 percent

– Health and human services: 28 percent

– Property tax aids and credits: 8 percent

– Higher education: 7 percent

– Judiciary, public safety: 5 percent

– Other: 10 percent

Notes: Property tax aids and credits include programs such as aid to local governments. Most transportation funding comes from other sources not included in the state’s main budget.

16-cent-a-gallon gas tax center of transportation plan

Zelle

Minnesota motorists would pay at least 16 cents a gallon more gasoline taxes under Gov. Mark Dayton’s transportation funding proposal.

They would pay slightly higher motor vehicle license fees and $10 more to register a vehicle. Also, a half percent sales tax increase would be applied in the Twin Cities for transit needs.

Dayton announced Monday that he wants Minnesota to spend about $11 billion more in the next decade to improve the state’s roads and bridges and boost transit.

The Dayton administration indicates that those in greater Minnesota would pay about $15 a month for his plan while in the Twin Cities the cost would be closer to $24.

“Inadequate transportation clogs our lives with worse traffic congestion, longer commutes, more dangerous travel conditions,” Dayton said. “These deficiencies restrict our future economic growth and detract from our quality of life.”

The Democratic governor was critical of Republicans for refusing to raise taxes for transportation.

“It takes some political courage” to approve tax increases, he said.

The governor said that Republicans appear to want to solve the transportation situation is “waving a wand and saying ‘abracadabra.’”

However, the Republican chairman of the House transportation committee said that his committee will need time to assess transportation needs, which may not be completed until next year.

“I look forward to a long-term solution over the next two years,” Rep. Tim Kelly of Red Wing said.

Kelly already has laid out what he calls a temporary fix, which Republicans want until a long-term funding bill can be prepared.

The chairman said there probably is not enough time during this legislative session, which must end May 18, to fully understand transportation needs and funding alternatives.

At least for now, Kelly said, “we can address the problem with funding that is already there.”

Senate Minority Leader David Hann, R-Eden Prairie, was critical of Dayton.

“Gov. Dayton is showing once again he is either unwilling or unable to set priorities in the state budget, and instead resorts to massive new taxes on lower and middle class Minnesotans,” Hann said.

Sen. John Pederson, R-St. Cloud, said the Dayton tax-increase plan comes “the minute working families begin to see some relief from high gas prices.”

Legislative Democrats generally liked the Dayton plan.

“Unfortunately, the proposal put forward by the Republicans in the Minnesota House fails to meet any of the standards necessary for Democratic support,” House Minority Leader Paul Thissen, D-Minneapolis, said. “While Gov. Dayton’s plan would be a bridge to the future, Republicans have offered Minnesotans a bridge to nowhere.”

Transportation Commissioner Charlie Zelle said half of the state’s highways are at least 50 years old, and 20 percent have three or fewer years of life left.

In addition to state highways, the Dayton plan increases funding for cities, counties and townships.

Greater Minnesota transit funds would increase $120 million in the next two years, with money coming from the state General Fund. Twin Cities transit needs would be funded by the higher sales tax.

The major part of the Dayton increase comes in a wholesale tax on gasoline. While it is different from the existing per-gallon tax, it would be felt much the same at the pump.

The tax would be 16 cents a gallon when wholesale prices are $2.50 a gallon or less. If wholesale prices go higher than $2.50, so would Dayton’s proposed new tax.

The wholesale price now is about $1.30.

The existing state gas tax is 28.5 cents a gallon and the federal tax is 18.4 cents.

Transportation officials did not say what specific projects that would be funded by the higher taxes.

Dayton’s plan depends on federal funds, which have yet to be appropriated.

The governor pledged to find $600 million from the Minnesota Department of Transportation doing things more efficiently.

St. Paul Mayor Chris Coleman, a leader of a city coalition seeking more street funding, said the Dayton plan is a good start, but does not give cities enough to fix their streets. And, he added, it does not help cities smaller than 5,000 population.

 —-

 Transportation funds

Money in Gov. Mark Dayton’s transportation plan would be divided over 10 years:

– $5.4 billion for state roads and bridges

– $2.4 billion for cities, counties and townships

– $2.8 billion for Twin Cities transit

– $120 million for greater Minnesota transit

– $75 million for bike and pedestrian paths and the Safe Routes to Schools program.

Dayton seeks $11 billion for transportation

Dayton, Zelle

Gov. Mark Dayton wants Minnesota to spend about $11 billion more in the next decade to improve the state’s roads and bridges and boost transit.

The governor on Monday said Minnesotans would pay 16 cents or more per gallon in a new tax on gasoline (on top of the 28.5 cents the state already collects). With all the revenue he proposes raising, those in greater Minnesota would pay about $15 a month for his plan while in the Twin Cities the cost would be closer to $24 monthly, the Dayton administration reported.

“It takes some political courage” to approve tax increases, he said, which in this case would not only add a new gas tax but also but also raise vehicle license fees, charge $10 more for car registrations and increase a Twin Cities sales tax. He also pledges to find $600 million from the Minnesota Department of Transportation doing things more efficiently.

“Inadequate transportation clogs our lives with worse traffic congestion, longer commutes, more dangerous travel conditions,” Dayton said in announcing his plan. “These deficiencies restrict our future economic growth and detract from our quality of life.”

However, the Republican chairman of the House transportation committee said that his committee will need time to assess the real transportation needs, which may not be completed until next year.

“I look forward to a long-term solution over the next two years,” Rep. Tim Kelly of Red Wing said.

Kelly already has laid out what he calls a temporary fix, which Republicans want until a long-term funding bill can be prepared. He said that he does not think the state needs to raise taxes as Dayton proposes.

While Kelly was gentle in his criticism of Dayton, Senate Minority Leader David Hann, R-Eden Prairie, was less so.

“Gov. Dayton is showing once again he is either unwilling or unable to set priorities in the state budget, and instead resorts to massive new taxes on lower and middle class Minnesotans,” Hann said. “The legislature should take the time to adequately define our transportation needs and then come up with solutions that actually address it, without raising taxes.”

Sen. John Pederson, R-St. Cloud, said the Dayton tax-increase plan comes “the minute working families begin to see some relief from high gas prices.”

The major part of the Dayton increase comes in a wholesale tax on gasoline. While it is different from the existing per-gallon tax, it would be felt much the same at the pump.

The tax would be 16 cents a gallon when wholesale prices are $2.50 a gallon or less. The wholesale price now is about $1.30.

If wholesale prices go higher than $2.50, so would the tax.

Money from the new taxes would be divided over 10 years among:

– $5.4 billion for state roads and bridges.

– $600 million from working more efficiently.

– $2.4 billion for cities, counties and townships.

– $2.8 billion for Twin Cities transit (from a half percent sales tax increase).

– $120 million for greater Minnesota transit (from state’s general fund).

– $75 million for bike and pedestrian paths and the Safe Routes to Schools program.

Transportation officials did not specify specific projects that would be funded by the higher taxes. They produced a series of maps that showed projects that could receive money, but the transportation department has yet to make firm decisions on what projects can be built.

Dayton’s plan depends on federal funds, which have yet to be appropriated. Transportation Commissioner Charlie Zelle said that if Congress does not come through with the expected money, the governor’s plan would need to be scaled back.

Political Chatter: House Dems say they helped greater Minnesota

Minnesota House Democrats think they are getting a bum rap by Republicans who say that greater Minnesota has been ignored in recent years.

A move to treat greater Minnesota right was the GOP focus for much of last fall’s House campaign and has intensified since then. Even suburban Republicans have joined the battle.

Most of the House Republican priorities involve the area outside of the Twin Cities. The No. 1 bill, for instance, would give tax breaks and aid to businesses, featuring such provisions as helping companies buy land for homes in rural communities with housing shortages. Nursing home aid also is on the list.

Democrats are skeptical that Republicans, who only control the House as Democratic-Farmer-Laborites still run the Senate and governor’s office, actually will do much to help greater Minnesota.

House Minority Leader Paul Thissen, D-Minneapolis, has been joined by Assistant Minority Leader Paul Marquart, D-Dilworth, and others in saying they did lots to help greater Minnesota when Democrats were in charge the last two years.

Now, DFL operative and House employee Zach Rodvold has compiled a list of items he says prove his party served greater Minnesota well, including:

– Investing $660 million in schools, including reducing the difference in state aid between high and low wealth districts.

– Taking actions that resulted in property tax cuts after a decade in which rural taxes rose eight times as much in rural areas than in the Twin Cities.

– Spending $20 million to improve high-speed Internet, known as broadband, in rural areas.

– Increasing money spent on care of the state’s elderly, with a higher percentage of them living in rural Minnesota.

– Cutting taxes for more than 90,000 farmers.

– Investing in the Corridors of Commerce program that improves highways around the state’s regional centers.

Budget plan coming

Tuesday is one of the key days in this year’s legislative session: That is when Gov. Mark Dayton releases his budget proposal for the next two years.

The Democrat will unveil the plan in front of journalists, who will be outnumbered by lobbyists who want to know how hard they will need to work to get funding for their clients.

Lawmakers in the Republican-controlled House and Democratic-controlled Senate will base their budget plans on what Dayton presents, although they may look far different. But don’t expect the legislative plans to fully appear until after a new economic and state revenue report released near the end of February because things could change by then and lawmakers want to use the latest information.

Dayton himself will update his budget plan after the budget report, which basically will show how much money lawmakers and Dayton have to spend.

In all likelihood, Dayton’s plan will call for collecting and spending more than $41 billion of state tax money in the next two years.

While Dayton says he will not seek a general tax increase, he will ask for a new wholesale fuel sales tax to boost transportation spending. He plans to release his transportation spending plan Monday.

Space a political drama

Controlling state Capitol turf always has been an interesting spectator sport.

The Senate, House and administration protect Capitol space they control, which set up an inside-politics drama when Senate Majority Leader Tom Bakk, D-Cook, wanted offices for 23 senators kept in the Capitol after it is renovated and a new Senate office building is finished.

Leaders of both parties in the House and Democratic Gov. Mark Dayton did not like the idea of keeping the Senate Capitol offices because the new building includes offices for all 67 senators. Negotiations among legislative leaders and Dayton went past a deadline; missing the deadline could have cost the state thousands of dollars a month in construction delays because contractors would need to wait until they knew how the space would be divided before going ahead with work.

The night before the Capitol Preservation Commission met to approve space allocation, Bakk relented and reduced the number of senator offices to four, and promised no senator would have an office in both the Capitol and the new building.

“I’ve always known that you need some type of tension to get things done at the Capitol,” quipped Sen. Warren Limmer, R-Maple Grove.

Klobuchar: lots of improvements

U.S. Sen. Amy Klobuchar wrote a column resembling a state of the state or state of the union address.

“With the economy improving, we are no longer governing from crisis; we are governing from opportunity,” the Minnesota Democrat wrote. “Especially as we head into a new year with a new Congress, Washington must put governing over gridlock and get things done that will move our economy and country forward.”

She pointed out that Minnesota’s unemployment rate is down, exports are up and many industries are surging.

“Starting this month, I will be taking on a new leadership position as chair of the Democratic Steering and Outreach Committee,” she said. “This position will give me a chance to reach out to members across the aisle, as well as community leaders, businesses and policy experts, to identify areas of common ground and work together for the benefit of all Americans.”

Her first priority, she said, is to “start with rebuilding and revitalizing our infrastructure.” She also called for government leaders to help make sure students and workers have needed skills for newly created jobs.

Dayton wants diversity

Gov. Mark Dayton has established a council to improve state government’s recruiting and retaining employees of a diverse background.

The governor will lead the Diversity and Inclusion Council.

“A government that serves the people of Minnesota, should reflect the rich diversity of Minnesota,” Dayton said. “We must ensure that all Minnesotans have equitable opportunities to work for their state government, to do business with the state, and to participate fully in the development of policy within our democracy.”

Work on ‘people’s house’ to proceed

Dayton

Minnesota citizens will have more space and senators less space when a $273 million state Capitol renovation project is completed two years from now.

“There is a winner here: the people of Minnesota,” said Paul Anderson, a former state Supreme Court chief justice, shortly after the Capitol Preservation Commission on Thursday approved a space allocation agreement among those who use the nearly 110-year-old building.

That deal, combined with formal approval to spend money for the final phase of renovation work, means construction will proceed as planned. A stalemate among Gov. Mark Dayton, Senate Majority Leader Tom Bakk of Cook and House Speaker Kurt Daudt of Crown about dividing space threatened to delay construction, at a cost of hundreds of thousands of dollars a month.

Dayton and Bakk told commission members that they reached agreement late Wednesday about how to split up the space.

“We rolled up our sleeves pretty hard on this,” Bakk said.

Bakk dropped his plan to put 23 senators’ offices in the Capitol, with the possibility they also would have offices in a building under construction across the street.

The deal would allow “up to” four senator offices in the Capitol, with the rest in the new building, Bakk said. No senator would have more than one office.

Senators who hold the majority traditionally have had Capitol offices. With Democrats in the majority now, 39 senators are in the facility. Republicans are in a building across the street that also houses all House members.

The House will have offices in the Capitol that its leaders can use, but no representative would have a permanent office there.

Putting most Senate offices in the new building opened up space throughout the Capitol for the public.

“That’s what is important,” Dayton said.

All five floors will have more public space, beginning with an expanded restaurant area in the basement. There will be space for lawmakers to meet with groups and individuals in the Capitol and areas for displays around the building.

“It is just a thrill to see how much public space has been incorporated into the Capitol,” Rep. Paul Torkelson, R-Hanska, said. “It is the people’s house.”

While the House and Senate use most of the Capitol space, all of the governor’s office also is in the building. The Supreme Court sometimes still will meet in its historic Capitol chambers, but it generally is housed in a building just to the east. The attorney general has Capitol offices, but also has some in downtown St. Paul.

Food services, the media and Minnesota Historical Society also will have spaces in the renovated facility.

Work started several years ago to repair the outside of the Capitol after pieces of the marble walls began to fall off. The leaking dome also was fixed.

Then attention turned to the inside, where problems include peeling paint, antiquated heating and air conditioning and handicapped visitors struggling to get around. Lawmakers and Dayton approved funding the renovation, and Capitol employees began moving out more than a year ago.

Now, only a third of the Capitol is open as construction workers take over the rest.

Rep. Dean Urdahl, R-Grove City, said he is glad the work is progressing and that people in his west-central Minnesota district appreciate the work.

“If we can’t maintain this building, I don’t know what we can maintain,” Urdahl said.

While the main part of the project is funded, Urdahl said that the current appropriation does not fully restore some Capitol artwork, so the Legislature or private business may need to come up with funds for that.

One of the major reasons for renovation was what officials call “life safety.” For instance, there now are no safe fresh air intakes at the Capitol. After renovation, all air will come from vents away from pollution such as vehicle exhaust.

The plan is to have 90 percent of the building protected by fire sprinklers, compared to 40 percent that now has sprinklers. The work also is replacing all of the building’s plumbing.

Top Minnesota GOP bill features business breaks

Improving the Minnesota economy will be difficult, a representative sponsoring the Republican House’s top priority says.

Even so, Rep. Ron Kresha said Thursday, “there is no excuse to throw up our hands and admit defeat.”

The Little Falls lawmaker took members of the House Greater Minnesota Economic and Workforce Development Committee through his 54-page bill that gives businesses tax breaks, cuts the time that the state has to issue environmental permits, examines rules that Kresha said “may be overzealous” and provides a way for communities to build homes to help reduce a housing shortage many greater Minnesota communities experience.

It was the first in-depth look at the bill Republicans say will encourage businesses to add jobs.

Kresha gained support from business advocates, such as the Minnesota Chamber of Commerce. No one spoke against the bill even though Democrats say much of it is nothing but a handout to businesses.

No votes were taken Thursday and the bill will be considered by a number of committees and Kresha predicted it will change quite a bit as it moves through the process.

A key part of the Kresha bill is to give businesses tax breaks when they pay via individual income tax returns.

A higher tax the Democratic-controlled Legislature and Democratic Gov. Mark Dayton approved two years ago increased taxes on the richest Minnesotans. However, Republicans and most business leaders say that hurt many Minnesota firms because they pay company taxes through individual returns.

That meant some companies sustained a 25 percent tax increase, Mike Hickey of the National Federation of Independent Business told the committee. More than 90 percent of state businesses use individual tax returns, he said.

In parts of greater Minnesota, housing is a concern as manufacturers cannot find enough workers.

More homes are “necessary to accommodate job growth,” Patrick Hynes of the League of Minnesota Cities said.

Hynes said cities such as Worthington, Luverne, Roseau and Thief River Falls have “employers who are ready and willing to expand operations but can’t because of lack of housing.”

“The cost of building market rate housing far exceeds that amount of money that is available to finance construction,” Hynes said.

Kresha’s bill would provide grants to cities with housing shortages to develop apartments. It also gives companies tax credits for buying land for housing.

“This is one of the things I am most excited about in the bill,” Kresha said.

Beth Kadoun of the Minnesota Chamber of Commerce agreed that something needs to be done to bolster greater Minnesota housing.

“We are beginning to hear more and more from our members in greater Minnesota how housing has become a bigger issue,” she said.

Other provisions in Kresha’s bill include:

– Cutting from 90 days to 45 days the Department of Natural Resources and Pollution Control Agency have to issue permits for many business needs.

– A method to make it easier to protest rules made by state agencies that businesses feel are burdensome.

– Providing a tax break as an incentive for research and development work.

– Giving a tax credit for some people who take jobs in science, technology, engineering, mathematics and long-term care fields.

Legislative notebook: Smoking drops

Fewer Minnesotans are smoking.

The Department of Health Thursday reported that new study results show smoking fell 14.4 percent since 2010.

“We know that many factors, including tobacco price increases, smoke-free policies, cessation programs and media, combine to reduce smoking prevalence over time,” said Dr. Raymond Boyle of ClearWay Minnesota, an anti-smoking organization that co-sponsored the study. “The new … data suggest that Minnesota’s long-term investment in addressing tobacco use is paying off.”

Nearly 63 percent of smokers surveyed said that a 2013 cigarette tax increase influenced them to try to reduce or quit smoking.

About 580,000 Minnesotans continue to smoke. Those who smoke generally have lower incomes than nonsmokers, more men smoke than women smoke and those who have not graduated from high school have the highest smoking rate.

“Minnesota has made great strides in reducing tobacco use through important health policies, but we can’t become complacent,” Health Commissioner Dr. Ed Ehlinger said. “The tobacco industry is constantly evolving, and we need to keep up our work to prevent young Minnesotans from becoming addicted to new and novel flavored products.”

Senate OKs tax conformity

Minnesotans can expect an easier tax season, and perhaps giving the state a bit less.

Senators voted 63-0 Thursday for a bill that conforms state taxes to those the federal government charges. That means taxpayers will get more state deductions that match those Washington grants.

The House already passed the bill, so it awaits an expected signature from Gov. Mark Dayton to become law.

While the thrust of the bill is to make life easier for taxpayers, it also could result in up to $20 million more tax breaks for Minnesotans.

“Minnesota taxpayers will have an easier time filing taxes…” Senate Tax Chairman Rod Skoe, D-Clearbrook, said. “It is a good government thing to do.”

Disaster relief advances

Minnesota senators voted without opposition to send $17 million for flood recovery to 47 Minnesota counties and three American Indian reservations.

Much of the money in the bill that passed 65-0 comes from money appropriated but not needed for previous disasters. It includes $2.2 million general tax receipts.

The House also is expected to pass the legislation soon and Gov. Mark Dayton likely will sign it into law.

Money will pay for government expenses spent to fight and recover from floods in June 2014.

For most counties and tribes, the federal government paid 75 percent of the expenses, with the state money covering the remaining 25 percent. However, Morrison, Washington and Dakota counties did not qualify for federal assistance, so the state is paying for more of their expenses.

Anti-abuse bill puts children first

Kresha, Sheran

Hank Marotske’s mother allowed her children one meal a week.

“That pot of whatever she cooked had to last a week,” he said.

When the food ran out one time, his mother caught Marotske trying to sneak food out of a cabinet.

“She threw me from the counter, across the trailer and stomped on my stomach so hard that I coughed up blood,” the Twin Cities man told a Minnesota House committee Wednesday before it unanimously passed a bill that supporters hope will help prevent child abuse.

Marotske said he was in eight school districts by sixth grade and while he stayed with foster parents, he always was given back to his mother.

“All of my case management meetings were all around what was my mom going to do,” he said.

One of the key changes in the bill, which still must pass several more committees before reaching the full house, is to focus on the children instead of parents.

Marotske said his life would have been better had his needs, not his mother’s wishes, governed child welfare decisions.

The goal of the bipartisan legislation, Sen. Kathy Sheran said, “is to place stronger protections for children facing possible maltreatment.”

The Mankato Democrat and Rep. Ron Kresha, R-Little Falls, authored the bill after the death of 4-year-old Eric Dean in 2013 in west-central Minnesota. News stories indicated that multiple reports of child abuse had been ignored.

Kresha said that the bottom line of the bill is finding ways that courts, law enforcement officers and child protection workers can better coordinate efforts to protect children.

Children, Kresha said, are “our most valuable and vulnerable” resources.

Allowing child abuse investigators to look at 5-year-old records should help, he said. That is a year longer than now allowed.

The change could help alert investigators of problems, which usually happen to children 5 years old or younger, he said.

The proposal also allows more communicating among those involved in child abuse work, and requires law enforcement agencies to get more of the reports.

The bill, Sheran said, “will give the professionals information they need.”

Sheran said that about 70 percent of child abuse reports are dealt with by “family assessments” that do not involve law enforcement. Those assessments do not prioritize child safety, she added.

Sen. Julie Rosen, R-Vernon Center, said part of the problem in investigating child abuse cases is that governmental entities tend not to work with each other well. The bill would require more cooperation.

The bill would cost the state money, but how much has not been determined.

Sheran said that $42 million in state money has been cut from child abuse programs in the past decade.

Kresha said that he hopes Gov. Mark Dayton includes money for child abuse help in the budget he releases on Tuesday.

Kresha said that in many rural areas, such as where he lives, that cooperation is easier than in urban areas. Often, he said, rural agencies involved in child abuse investigations are housed in the same building, while in big cities they may be in buildings scattered over a wide area.

However, Kresha added, urban areas often have more resources than rural Minnesota.

State ignores meatpacker rights law

Poppe, Koenen

A Minnesota state department has not followed a law to notify meatpacking plants and workers about protections the state provides.

Pointing to a bookshelf full of Minnesota laws, Legislative Auditor Jim Nobles said Wednesday, “one of them sort of got lost.”

The law that was not followed is known as the Packinghouse Workers’ Bill of Rights, passed in 2007,  requiring meatpacking companies to tell workers information about their jobs, including hazards they may face, the fact that they may join unions and that they must be free from discrimination. It requires the information to be passed on to workers “in their native language.”

Once an initial letter went to packing houses in 2007, there has been no bill of rights follow-up, Nobles’ office reported.

Commissioner Ken Peterson of the state Labor and Industry Department said that the requirement slipped by when he took office in 2010, but said the department already is taking steps to fix the problem. Bill of rights information now is on the department website, he said, and letters soon will go to 33 packing houses, mostly southern, western and central Minnesota.

“It will make us a better agency,” Peterson said after the audit was released.

Peterson said that fewer injuries are reported in the industry. “Worksites are getting safer.”

Rep. Rick Hansen, D-South St. Paul, chairman of the legislative audit committee, said that Wednesday’s report should give the Legislature direction about how to deal with meatpackers and other manufacturers.

Rep. Jeanne Poppe, D-Austin, and Sen. Lyle Koenen, D-Clara City, praised the audit and said the Legislature needs to do little to respond beyond minor tweaking.

The good news in the report, Poppe said, is “to know that the number of injuries has gone down.”

Legislative audit worker David Kirchner reported that meatpacking plants have similar injury rates to other manufacturers, although concerns remain in what is considered a high-risk job.

He suggested that the Legislature should consider whether a similar bill of rights is needed in other high-hazard jobs and those with a large number of immigrant workers.

Improving communication with meatpacking workers is important, Kirchner said, especially because more workers are coming from other counties, including those from east Africa and southeast Asia.

Also, he said, “there is a lot of turnover in the meatpacking industry.”

Nursing home officials say lack of state funds hurts residents

Peterson-DeVries

Minnesota nursing home workers can earn more money at Fleet Farm, Dairy Queen and a sugar beet processing plant than helping the elderly, nursing home administrators across the state complain.

That means, they told a House committee Wednesday, that nursing home residents are not getting care as good as they should. Staff turnover, they said, prevents nursing staff workers from knowing residents well enough to provide the best care.

“The current system is broken and curtails our ability to provide service,” President Bruce Glanzer of Good Shepherd Community in Sauk Rapids testified.

Glanzer and other administrators, from rural and city nursing homes alike, said the state does not provide enough money to pay adequate wages. The state sets rates nursing homes may charge and the facilities have little to say about how much they pay workers.

Rep. Dave Baker, R-Willmar, was not happy with what he heard.

“As a freshman legislator, I am embarrassed that we allowed this to happen,” Baker said.

He told administrators to return home and tell people: “Help is on the way. … If that doesn’t happen, then we should not be in these seats.”

The comments came during a House Aging and Long-Term Care Policy Committee discussion about nursing homes.

Committee Chairman Joe Schomacker, R-Luverne, and others presented a proposal Tuesday to change how the state pays nursing homes. The bill also is to call for more state money, which some in the nursing home industry say would be $200 million for the next two-year budget.

Glanzer said that nursing homes have little say when dealing with the state.

“We are the yo-yo and the Legislature pulls the string,” he said.

Nursing home administrators who complained about lack of state funding face an even tougher time in coming years as baby boomers begin needing their facilities.

“We are entering the early stages of the boomer gateway,” Loren Colman of the Human Services Department said.

High employee turnover is a major concern for nursing home officials.

“We grapple regularly with turning away seniors who need care,” President Tom Anderson of Knute Nelson Care Center in Alexandria said, because he cannot hire enough staff to care for residents.

The center reduced the number of beds from 108 to 85 because of lack of employees, he said.

He said Knute Nelson loses nursing staff to hospitals, Fleet Farm and other places that pay more.

Glanzer said he has been in the nursing home business 37 years, and because of state funding issues the last six have been tougher than the first 31 combined.

“The greatest problem we face is workforce issues,” he said.

He said that his facility has 51 open jobs, resulting in 200 open nursing shifts for March. Existing employees are filling in for those open shifts.

Half of his nursing staff turns over in a year, he said.

Administrator Cami Peterson-DeVries of RenVilla Health Center in Renville echoed the wage problem.

“They can go to the sugar beet plant down the road and get more money…” she said. “We have no method of making up the difference.”

A nearby hospital attracts the nursing staff from West Wind Village in Morris, Administrator Michael Syltie said.

The hospital pays $8 an hour more for registered nurses than state funds allow him to pay, Syltie said.

“When the hospital does have an opening, we lose one of our employees,” he added.

The Morris facility has 15 full-time-equivalent openings in a 50-person staff, Syltie said.

“We are the only nursing home in Stevens County,” he said, “so closing is not an option.”

Maria Freidlund of Aitkin Health Services said that her facility extensively advertised for a nursing assistant, but has received no applicant in three months. “Zero is the number.”

Freidlund said she had an applicant reject a job offer to stay at Dairy Queen.

She urged lawmakers to provide nursing homes the help they need.

“Don’t leave long-term care and aging to luck,” she said.