Category Archives: Minnesota government

Loud demonstrations join budget debate in Minnesota Capitol

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Falk, with Sen. Benson and daughter

By Don Davis

Heather Falk fanned herself Saturday in the hot, muggy Minnesota Capitol building as legislators gradually worked toward finishing the state budget and adjourning for the year.

The Cloquet child care provider joined a few hundred others who exercised their lungs and freedom of speech in the Capitol, awaiting a hot House debate about whether child care providers and personal care attendants should join unions.

The relatively small crowd, compared to 2,800 who turned out for Monday’s Senate gay marriage debate, made enough noise to be heard even in remote areas of the Capitol.

While demonstrators on both sides of the issue chanted, legislators plowed through bills that help make up the state’s $38 billion budget for the next two years.

The Senate on Saturday passed a bill funding state health programs for the elderly and disabled, approved a measure changing some transportation policies and took up a variety of smaller bills.

The House began the weekend passing several routine bills, preparing to take up a natural resources and agriculture spending measure, setting the stage for a public education finance bill and looking forward to the union proposal late Saturday or early today.

With Minnesota legislators facing a Monday night constitutional deadline to adjourn, they planned to work through Saturday night, return at midday today and put in a full Monday.

The $16 billion education funding bill, the biggest single spending area of state government, is a keystone for Democrats who control the House and Senate.

But if education is a key political issue this weekend, noise bouncing off the Capitol’s marble walls came from child care workers.

“I still think my voice should be heard,” Falk said, sweat dripping off her face, even though all in the Capitol knew the Democratic-controlled House most likely would follow the Senate and approve allowing child care workers and personal care attendants to join unions.

Falk is a longtime opponent to the unionization effort and predicted that once it becomes law, she and her colleagues will challenge the issue in court.

Another child care provider, Lynn Barten of Alexandria, was thrilled that representatives appeared poised to approve the unionization proposal.

“It’s kind of a historic day,” she said, standing a few feet from Falk.

Associations that represent child care workers have not been effective at the Legislature, Barten said. Unions are better capable of lobbying lawmakers for more money and better regulations, she said.

She said she understands why some would oppose the idea: “Anything new is scary.”

Also standing just outside the House chamber was child care worker Terrie Boyd of Detroit Lakes, holding a sign asking “what part of unconstitutional didn’t you understand?”

Union opponents say it is not constitutional to let business owners such as child care providers join unions. That is a provision only for employees, she said.

“This is my business,” Boyd added. “I am not an employee.”

Boyd and Falk said most child care workers in their areas oppose unionization.

Democrats back two unions that want to sign up child care workers and personal care attendants. Unions say they can do a better job of negotiating state subsidies and rules that govern the services.

Also on Saturday, a transportation bill passed, but without a provision the House and Senate earlier approved to raise some speed limits from 55 mph to 60.

Sen. Torrey Westrom, R-Elbow Lake, long has worked to raise speed limits and was upset that a House-Senate conference committee dropped the higher speed limit.

Senate Transportation Chairman Scott Dibble, DFL-Minneapolis, said state transportation officials oppose the higher speed limit because it “would decrease safety.”

Also in the transportation bill is a provision that makes it legal for a bicycle to have a horn or bell, which is not allowed now.

House and Senate members on Saturday approved coming back for the 2014 legislative session Feb. 25.

Barten

Boyd

Nursing homes get financial bump as lawmakers OK health care bill

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Sens. Lourey, Dibble

By Danielle Killey

Nursing homes and other care facilities will get more state money than they have seen in years.

Sen. Tony Lourey, DFL-Kerrick, said the budget plan lawmakers approved last week includes “the largest state investment in the nursing home industry in well over a decade.”

But others say it is not enough for the organizations.

“This is going to let them limp along for a while, but this is not what we should be doing,” Sen. Julie Rosen, R-Fairmont, argued.

The Senate approved the health and human services budget 39-28 Saturday, after the House voted 73-61 late Friday. Like most budget bills, the votes largely were along party lines, with Democrats in charge of the Legislature backing their budget decisions.

The more than $11 billion is a significant portion of the state’s two-year, $38 billion budget, second only to public education spending.

The bill includes a 5 percent rate increase for nursing homes in the next two years, half what they wanted.

Long-term care and other providers will see a 1 percent rate increase effective April 2014.

“This is the first time in four years that we actually have an increase in wages for nursing home workers and long-term care workers,” said Rep. Tom Huntley, DFL-Duluth.

Lourey said it was time to start increasing funding after “devastating cuts” in past budgets.

“Health and human services takes the lion’s share of the budget balancing around this place year in and year out,” Lourey said, referring to cuts in the budget during tough fiscal times.

Providers said while the increase will help avert immediate crises at nursing homes and long-term care facilities, more work is needed in the future.

They had asked for a 5 percent increase each year in the next two years. They said without funding increases, many facilities are losing employees to higher-paying jobs and many nursing homes risk closing due to fiscal problems.

Rep. Paul Torkelson, R-Hanska, called the 1 percent hike for care workers for the disabled “embarrassing.”

Huntley said it is one part of the bill he did not like.

“I have always been committed to treating them exactly the same as I treat nursing home people, and I was unable to do that,” he said. “I’m disappointed with that myself.”

Republicans said not funding that fully was a case of misplaced priorities. They also argued some other changes will cost nursing homes money, so they will not fare as well as it seems.

“We have a questionable priority system here,” Rosen said. “We are raising taxes by $2 billion and we cannot fully fund the long-term care industry.”

The health and human services budget originally was to be $150 million less than the current budget, but the conference committee improved that to $50 million, “which made things a lot less painful,” Huntley said.

“That really helped mitigate a lot of problems with the bill,” Lourey said.

Gov. Mark Dayton proposed a $127 million increase in HHS funding.

The bill includes some savings from combining cuts and reforms such as savings from the federal Affordable Care Act and bumping up the date HMOs and hospitals pay their existing state surcharges.

HMOs also can no longer bill the state for salaries higher than $200,000, advertising, penalties, fines or charitable contributions.

Gone from the bill was a proposed hospital surcharge, which Huntley said he was happy to have erased.

The bill also includes expanded programs for mental illness care, including in schools.

“We still have work to do to help our hospitals and nursing homes in the future, but I’m happy to vote for this step in the right direction,” said Rep. Jay McNamar, DFL-Elbow Lake.

The governor is expected to sign the bill.

“This bill finds government efficiencies that will allow for some cost-of-living raises for nursing home workers in our communities,” said Rep. John Persell, DFL-Bemidji.

Rep. Roger Erickson, DFL-Baudette, said the raise is needed.

“This budget will provide a well-deserved raise for those workers who do such crucial work in nursing homes across Minnesota,” Erickson said. “They have been waiting for a raise for far too long, and I’m happy to vote in favor of it.”

Rep. Andrew Falk, DFL-Murdock, said nursing homes need the increased funding.

“We know that our nursing home workers need more support from the state,” Falk said. “This bill gives them a pay increase that is well-deserved, and it helps make responsible reforms to one of the biggest areas of our budget.”

Rep. Mary Sawatzky, DFL-Willmar, said workers deserve the increased funding.

“After a decade of cuts and four years of wage freezes for nursing home providers, this increased funding is desperately needed,” she said. “Our seniors and nursing homes are a vital part of our communities, and they deserve our support.”

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Here are some highlights of the Minnesota Legislature’s health and human services bill:

– Total spending in the next two years, $11.3 billion

– Cut from the current budget, $50 million

– Nursing home funding increase, 5 percent; long-term care increase, 1 percent

– Statewide health improvement program funding, $35 million

– Additional funds for school mental health services, $7.4 million

Budget pieces slowly begin moving toward governor’s office

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Rep. Paul Marquart

By Don Davis

Minnesota legislators have taken baby steps in passing a $38 billion, two-year budget that must be finished by midnight Monday.

The biggest step so far was set to come late Friday or early Saturday as the House edged toward approving money for state-subsidized health programs, the second-largest part of the state budget.

“I think we have time to get the budget bills done,” House Majority Leader Erin Murphy, DFL-St. Paul, said even as Republicans complained that the Legislature was debating nonbudget bills.

“I’m concerned that with the amount of time left in the legislative session, we may not have enough time for public input and debate on these important bills,” said Sen. Bill Ingebrigtsen, R-Alexandria.

Budget bills headed for Gov. Mark Dayton’s approval fund public safety, judiciary, higher education and economic development programs.

Much of the budget still was being negotiated among the Democratic-controlled House and Senate and Democratic governor’s office, including measures to fund natural resources, agriculture, public schools, various state agencies and transportation.

Some of the budget became clearer Friday. Murphy said she doubted gasoline taxes would rise, as some proposed. She also said legislative pay likely will not be increased.

A bill raising $2 billion in taxes remained in negotiators’ hands late Friday, but Dayton and legislative leaders gave them instructions to raise income taxes on the highest-paid Minnesotans, add a sales tax to some business services and raise cigarette taxes.

The House began a debate late Friday to fund state health programs for the elderly and disabled.

Supporters of nursing homes and other long-term care organizations said the health and human services bill averts a crisis.

The bill increases nursing home funding 5 percent in the first year of the next budget cycle and 1.5 percent in the second year.

Still, long-term care supporters say the work is not over to find sustainable funding for years to come.

“Every year that we put off discussions and decisions on sustainable long-term care funding will only make the problem more difficult to solve,” President Gayle Kvenvold of Aging Services of Minnesota said. “The state’s current funding approach is already strained.”

Earlier Friday, the House defeated a plan to spend $800 million on public works projects across the state. The vote was 76-56, but bills funded by the state selling bonds need 81 votes.

House Minority Leader Kurt Daudt, R-Crown, said the bonding bill and a proposed constitutional amendment that filled Friday afternoon are “distractions” from setting the state’s budget. The constitutional amendment would remove the decision about legislators’ pay from the Legislature.

The House plans to take a break from the budget for a time Saturday, perhaps a long time.

Nearly 100 amendments have been filed for a bill to allow child care providers and personal care attendants to join unions. There were fewer amendments than that when senators debated the bill, a debate that stretched 17 hours before it passed 35-32.

Murphy said she will use “all of the tools in the toolbox” to shorten debate if Republicans venture into filibuster territory instead of what she considers legitimate debate.

Rep. Jason Metsa, DFL-Virginia, sponsored the legislative pay amendment.

“This isn’t a bill about giving legislators a pay raise,” he said. “It is about being transparent.”

Daudt said there was no need to take up the bill this year because Metsa’s plan calls for voters to consider the measure in 2016, leaving three more legislative sessions where it could be debated.

Daudt and other Republicans raised their voices during the pay debate.

“Uff-da. I think the caps lock was on there,” Murphy said.

Legislative notebook: Legislature approves freezing college tuitions

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Rep. Carly Melin

By Danielle Killey and Don Davis

A bill funding Minnesota State Colleges and Universities and the University of Minnesota systems freezes tuitions.

Senators passed the bill 44-22 and the House 76-56 Friday.

Democrats said their bill restores funding that was cut under Republicans.

“This bill will finally reverse that trend, which has been making college education more expensive and less affordable at a time when it is more important,” Sen. Kent Eken, DFL-Twin Valley, said.

The bill gives the university $42.6 million and MnSCU $95 million to freeze tuition for the next two years.

Republicans were divided over the Democrat-written bill.

Sen. Torrey Westrom, R-Elbow Lake, complained that the bill includes what used to be known as the DREAM Act, a provision to allow undocumented immigrants access to state-run colleges and universities like other Minnesotans.

Westrom said it “dilutes money Minnesota students will get.”

Even if those students do get financial breaks, they probably would have a hard time finding jobs after graduation, he added. “Without employment, that becomes a nearly impossible task.”

Other Republicans praised the bill.

“This is a good bill for the students, all students in Minnesota,” Rep. Bud Nornes, R-Fergus Falls, said.

MnSCU Chancellor Steven Rosenstone said the bill “will help increase access to higher education for all Minnesotans and ensure that our colleges and universities remain affordable and within reach of students from all backgrounds.”

Public safety OK’d

The House and Senate approved a bill to fund courts, crime victim programs and law enforcement 121-12 and 64-1, respectively.

The bill also expands information in the background check system for gun purchases. It does not broaden background checks or ban any weapons or ammunition.

“We have been successful in threading the political needle on the reducing gun violence issue by finding the funding and the language to fill in the gaps in the background check database, particularly to include the mental health and civil commitment data,” Senate Judiciary Committee Chairman Ron Latz, DFL-St. Louis Park, said.

The bill allocates about $5.6 million for upgrading the criminal history system, $2.7 million for the state’s crime statistic reporting system and $1 million to integrate non-electronic data into the Bureau of Criminal Apprehension’s system.

“This will greatly improve our background check system across the state by putting the missing data into the background check system,” House Judiciary Finance and Policy Committee Chairwoman Debra Hilstrom, DFL-Brooklyn Center, said.

The bill includes $3 million for crime victim shelters, services and programs.

It also sets aside $860,000 over the next two years to create a School Safety Center to assess threats to Minnesota schools and provide training and assistance for school safety.

Judges also will see salary increases of 3 percent each year in the next two years.

Senate approves jobs

The Senate approved a jobs and economic development bill 40-27, sending it to Gov. Mark Dayton’s desk for a signature.

The bill would fund job creation, training and economic development programs. It also sets energy standards, including requiring 1.5 percent of investor-owned utilities’ power to come from solar energy by 2020.

“This bill may be the most significant job creation bill in many years, making economic development across the state a top priority,” sponsor Sen. David Tomassoni, DFL-Chisholm, said. “The energy provisions in this bill allow our communities to get in on the solar boom happening across America. More importantly, we make sure that the solar development happening in Minnesota, directly benefits Minnesotans.”

The bill offers incentives for Minnesota-made solar products.

The House approved the bill earlier.

“It’s not a piecemeal approach,” Rep. Tom Anzelc, DFL-Balsam Township, said. “It’s an all-of-the-above strategy that pulls out all the stops when it comes to job creation.”

Warehousing tax, solar linked

The Minnesota Trucking Association says a plan to extend the state sales tax to warehousing services could impact state solar power efforts.

MTA President John Hausladen said the tax expansion “will drive customers to position their inventories in Wisconsin, Iowa and the Dakotas. Minnesota warehouse space will shrink, along with current and future solar generation capacity.”

A recently passed plan would require solar electricity generation to reach 1.5 percent by 2020, but the sales tax expansion could hurt that, the organization argues.

Foreclosure protections OK’d

A bill that would offer help to Minnesotans facing foreclosure passed the Senate 61-1.

The bill is aimed at protecting homeowners through measures including requiring all information on foreclosures be readily available, banning “dual tracking,” where banks or loan servicers foreclose without answering whether the loan can be modified and covering lawyer and court costs for homeowners to bring the foreclosure to court if loan offices fail to comply with the law.

Cigarette tax praised

Health organizations praised a proposed $1.60-per-pack cigarette tax hike.

“This significant bump in the price of tobacco products will inspire many adults to quit and help keep our kids from smoking,” Matt Schafer of the American Cancer Society said.

The Raise it for Health coalition said the increase could save more than 25,700 Minnesotans from premature smoking-related deaths.

The increase would set the state’s total cigarette tax at $2.83 per pack.

Update: Bonding bill up in air

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Hausman

By Danielle Killey

The future of a public works borrowing bill to fund state Capitol work, roads and bridges and other projects is in question after it failed in the Minnesota House.

Representatives voted 76-56 Friday on a bill to sell bonds to fund public works projects, five votes short of the 81 needed to pass.

“This is nothing short of tragic,” bill author Rep. Alice Hausman, DFL-St. Paul, said after the vote. But even with only three days left in the session the bill could resurface.

The $800 million bonding bill would fund projects such as state Capitol renovations, repairs at colleges and state parks and local bridge and road projects. The $109 million Capitol provision is the largest single item in the bill.

Republicans said they did not want to vote on the bill before the state budget is set.

“We need to get our priorities straight,” House Minority Leader Rep. Kurt Daudt, R-Crown, said.

“Why we would at this time borrow another $800 million to spend more money, before doing our budget work, is perplexing,” Rep. Matt Dean, R-Dellwood, said.

Various budget bills have begun to be heard by the House and Senate, but most major pieces remain to be debated.

Southwestern Minnesota Republicans said they were upset because aid to their area affected by storms last month was in the bonding bill and would have been more likely to pass on its own.

“I truly hope the Democrats aren’t going to play politics with an act of God,” Rep. Joe Schomacker, R-Luverne, said before the vote.

Rep. Rod Hamilton, R-Mountain Lake, also worried the disaster relief could be in danger as part of the bonding bill.

“Democrats are holding this funding hostage because we did not support $800 million in additional state borrowing,” Hamilton said. “We have always helped our disaster victims during their time of crisis, and I can only hope the Democrats will do the right thing and bring this bill forward in the next few days.”

Hausman argued that all the projects in the bill are important.

“Why is one community and its need more noble than anyone else’s?” she asked.

Hausman told reporters after the vote that the bonding bill is finished for the year. However, Gov. Mark Dayton and leaders of the Democratic-controlled House and Senate could bring the bill up for debate again.

Republicans have said they could accept a bonding bill that includes Capitol work and any disaster funding, but not other projects.

Hausman said she thinks a Capitol-only funding bill will not come up this year, though without it repairs will be delayed, she said.

“In today’s highly partisan political atmosphere, the bonding bill is one example where legislators can work together for their communities and the good of the state,” Hausman said. “A great disservice was done today by those who wanted to make a political point.”

She said the bill would have made a difference in communities throughout Minnesota.

“I couldn’t have asked the people of Minnesota for more help,” Hausman said, relaying letters, calls and emails from people throughout the state asking for projects to be included. “We’re all in this together.”

Hausman said the bill was an agreement among the Senate, House and governor’s office.

Hausman said at least eight Republicans promised votes, though she would not say who. Dean said no GOP members promised to vote for the bill. Three Republicans did join Democrats in the vote.

House defeats bonding bill … for now

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Reps. Tom Hackbarth, left, and Rod Hamilton

By Don Davis

The Minnesota House defeated a public works funding bill this afternoon, but even with a Monday adjournment deadline looming it still could come back up.

Bill author Rep. Alice Hausman, DFL-St. Paul, said today’s vote would be the only chance representatives would have to pass her $800 million bill, to be funded by the state selling bonds. In past legislative sessions, major bills such as the bonding bill have been defeated in the final days, but have come back before the midnight Monday constitutional deadline.

The House vote was 76-56, with 81 votes needed for the state to sell bonds.

Southwestern Minnesota Republicans said they were upset because aid to their area affected by storms last month was in the bonding bill, which was less likely to pass than if the bill were a stand-alone measure.

“I truly hope the Democrats aren’t going to play politics with an act of God…” Rep. Joe Schomacker, R-Luverne, said. “With four days left in session, there is absolutely no excuse to not hear this (disaster relief) bill, approve it and send it to the Senate.”

Rep. Rod Hamilton, R-Mountain Lake, also worried that the disaster relief could be in danger.

“Democrats are holding this funding hostage because we did not support $800 million in additional state borrowing,” Hamilton said. “We have always helped our disaster victims during their time of crisis, and I can only hope the Democrats will do the right thing and bring this bill forward in the next few days.”

The overall bonding bill would fund projects such as state Capitol renovation work, repairs at state facilities ranging from colleges to state parks and providing funds for communities to improve sewer treatment plants. The $109 million Capitol provision is the largest in the bill.

Many Republicans said they could not support the bonding bill until the state budget is finished. Various budget bills have begun to be heard by the House and Senate, but no major spending bills have been debated.

Hausman told reporters after the vote that the bonding bill is finished, but Gov Mark Dayton and leaders of the Democratic-controlled House and Senate could order the bill to be debated again.

There has been talk this year that Republicans could accept a bonding bill that includes Capitol work and any disaster funding needed, but not other projects.

Final $2 billion tax deal merges 3 plans

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Bakk, Thissen

By Don Davis

The Minnesota House, Senate and governor’s office agreed to a tax plan Thursday night, four months after the Legislature started and four days before lawmakers must wrap up work for the year.

The tax plan is a merger of what the Democratic-controlled House and Senate and Democratic Gov. Mark Dayton wanted. It is a refinement of a tax and budget deal announced Sunday.

The tax increase would bring in $2 billion in new revenue to help support a $38 billion, two-year budget.

While legislative tax negotiators still need to fill in details, here is what Dayton, Senate Majority Leader Tom Bakk, DFL-Cook, and House Speaker Paul Thissen, DFL-Minneapolis, announced Thursday night:

– The top 2 percent of Minnesota earners will pay 9.85 percent of their income in taxes, up 2 percentage points from the current top rate. The tax affects couples with at least $250,000 in taxable income and individuals earning $150,000.

– Sales taxes will not rise on consumer goods such as clothing, but some businesses will pay sales taxes on services and goods provided by other businesses. Included will be electronic equipment and repair and warehousing.

– Cigarette taxes will rise $1.60 a pack to $2.52 a pick, the same as Wisconsin charges and higher than any other Minnesota neighbor.

– Minnesotans should see about $400 million in property tax relief due to higher city aid payments and dropping a requirement that cities and counties pay sales tax. Also, property tax refunds would be enriched.

– Some corporate tax loopholes will be closed.

“There are a lot of details for the tax committee to work out,” Thissen said.

Bakk said the rest of the state budget should fall in place quickly now that the tax deal is in place.

“This is the lynchpin of the session,” Bakk said.

Dayton said the latest agreement fulfills promises Democrats have made to improve education funding and make other changes without using financial gimmicks.

Democrats said they are imposing no new taxes on middle-class Minnesotans. However, Republicans disagreed.

“Every Minnesotan will pay more,” said House Minority Leader Kurt Daudt, R-Crown.

Senate Minority Leader David Hann, R-Eden Prairie, said the business sales tax Democrats propose will filter down and be paid by average Minnesotans.

The DFL leaders dropped a House plan to place a surcharge on the richest of the rich to repay money the state has borrowed from schools.

Dayton and legislative leaders said they will pass a $400 million Mayo Clinic request, even though Senate Tax Chairman Rod Skoe, DFL-Clearbrook, and House Tax Chairwoman Ann Lenczewski, DFL-Bloomington, said they do not place a priority on the project. Mayo seeks state aid to prepare Rochester for a $3 billion Mayo expansion.

Lenczewski said “we have paid far too much time” on the Mayo plan this year. “I’m at my limit.”

She said that as the session’s end approaches, members should not rush through a plan.

“I’m willing to wait until next year,” Lenczewski said.

Skoe said he had his staff working on “more important issues” than the Mayo plan.

Dayton and legislative leaders said tuition at state-run colleges and universities will be frozen.

Democrats have enough votes to pass all of the provisions without Republican help.

Education is the largest single portion of the two-year budget that begins July 1. Negotiators continued to write that bill Thursday night, but the second-largest bill, funding state health programs, appeared close to wrapping up.

The first of nine budget bills — dealing with public safety and jobs — began showing up in the House and Senate Thursday after conference committees negotiated differences and rewrote bills passed earlier.

On the House floor today will be an $800 million public works bill to be funded by the state selling bonds. Other budget bills also are expected in both chambers.

With the state constitution setting Monday as the last day lawmakers can meet this year, unless the governor calls a special session, plans are in place to meet Saturday and Sunday.

On Saturday, the House is expected to take hours debating a bill allowing child care providers and personal care attendants to join unions. The Senate took a modern-day record 17 hours to debate the measure earlier this week.

Update: Smokers, corporations to provide stadium funding backup

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Frans

By Danielle Killey and Don Davis

Smokers will provide the backstop to Viking stadium construction funding, the governor and legislative leaders announced Thursday night.

If that is not enough, eliminating corporate tax loopholes will be a second backup to electronic pulltabs and bingo, which have failed to generate as much state revenue as expected.

Confirming a proposal Revenue Commissioner Myron Frans unveiled earlier in the day on behalf of the governor, the Democratic leaders said they agree on the plan. Gov. Mark Dayton, House Speaker Paul Thissen, DFL-Minneapolis, and Senate Majority Leader Tom Bakk, DFL-Cook, told reporters Thursday night that the proposal will be part of a tax bill expected to pass before Monday’s legislative adjournment deadline.

A cigarette tax increase and closing what some see as a corporate tax loophole would be backup sources if other revenue sources continue to fall short, though supporters say they hope money from electronic pulltabs and bingo will be enough to fund stadium construction.

Frans said the tax increases already were being discussed, but the money now would be earmarked to fund the Vikings stadium if needed.

About $24.5 million estimated to come from a cigarette tax increase would go to plug a possible deficit in stadium funding for the next two years.

The plan would raise the cigarette tax from $1.23 per pack to $2.52. That is the same as Wisconsin’s rate, the highest of Minnesota’s neighbors.

Republicans, who were not involved in drawing up the backup stadium finance plan, complained that the Dayton proposal would take money away from schools and other state needs.

Sen. Dave Thompson, R-Lakeville, said Dayton promised not to use general tax dollars to fund stadium construction. The funds from the cigarette tax and closing tax loopholes would go to the state’s General Fund, where Thompson said schools and other state programs get money.

“Why are we talking about the stadium now?” said Senate Minority Leader David Hann, R-Eden Prairie, with the end of this year’s session coming Monday.

When asked about the GOP allegations, an angry Dayton said the taxes are earmarked for a stadium and do not take money away from other needs.

“They want to screw up the project,” Dayton said of Republicans.

The stadium, replacing the downtown Minneapolis Metrodome, already is producing jobs, the governor said. Had the new stadium not been approved, a $400 million project with two office towers and other development would have gone to Des Moines, Iowa, Dayton said.

He called Republican opposition “political grandstanding.”

The law enacted last year to approve a nearly $1 billion stadium pinned the state’s $348 million contribution on electronic pulltab and bingo tax revenues.

“We’ve been disappointed with the rollout and how long it’s taken,” Frans said, but “we hope the original source will continue to grow.”

Closing the corporate tax loopholes would bring in about $26 million in the first year and $20 million annually after that, Frans said. Businesses now can avoid some state taxes by attributing sales to affiliates in other states, he said.

“It may never be used,” Frans emphasized of the new taxes. “The primary source still is charitable gambling.”

Legislative notebook: Economic development bill passes

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Rep. Mary Murphy chats with former Sen. Roger Moe

By Don Davis

Minnesota legislators voted to increase funding designed to produce jobs.

The House voted 73-59 for the jobs and economic development bill that for the next two years provides $100 million for economic development, more than twice spent in the current two-year budget.

Of that, $54 million is for two major job-creation programs. The Department of Employment and Economic Development will use the funds to offer financial incentives to encourage companies to set up shop in Minnesota.

“This may well be one of the most significant economic development bills to come before this chamber in many, many years,” Sen. David Tomassoni, DFL-Chisholm, said.

Senators were expected to pass the bill, but debated it well into Thursday night.

The bill increases funding for the state Trade Office, which aids Minnesota businesses in exporting their goods. The money will allow the state to add offices in three countries besides China, where an office already exists.

A $346 million tax cut is included, with about $150 per employee benefit.

Folded into the jobs bill is an energy provision that requires 1.5 percent of electricity in 2020 to come from solar cells.

The bill appropriates $10 million to attract television shows and movie production to Minnesota.

Employees that employers lock out in a labor dispute would be able to double how long they could collect unemployment benefits. Existing benefits last 26 weeks.

Also, the bill forbids any business other than barbers to use a barber pole to attract customers.

Democrats praised the bill, but Republican opposed it. Among GOP complaints is that requiring solar energy will increase utility costs.

“Democrats passed energy mandates tonight that will result in higher energy costs for hard-working Minnesotans,” Rep. Pat Garofalo, R-Farmington, said. “Democrats are forcing consumers to use energy that nobody wants, everyone will pay for and no one can afford.”

Rep. John Persell, DFL-Bemidji, said the bill should create good jobs.

“Minnesota needs to help create jobs for working families across our district,” Persell said. “This bill will help local communities bring in new businesses that can offer those jobs.”

Rep. Jay McNamar, DFL-Elbow Lake, said many of the provisions will help his constituents.

“A lot of these investments are going to be available for businesses in our area,” McNamar said. “This gives our communities a chance to bring in new jobs and new economic development.”

Tourism funding is increased in the bill, Rep. John Ward, DFL-Baxter, said.

“In our area, tourism affects nearly everyone directly or indirectly,” Ward said. “By expanding our Explore Minnesota marketing program, we can make Minnesota a priority destination. We need to do what we can to help keep our tourism industry growing and prosperous because it grows jobs and generate new tax dollars.”

No minimum wage?

An effort to raise the Minnesota minimum wage may be over for the year.

That is what Senate Majority Leader Tom Bakk, DFL-Cook, said Thursday.

Unions were not happy to hear that.

“If the Legislature adjourns without a meaningful minimum wage increase this year, it will be extremely disappointing to hundreds of thousands of low-wage workers who could use a raise and the countless small businesses that would have benefitted from increased consumer spending,” said Minnesota AFL-CIO President Shar Knutson.

The House calls for a $9.50 an hour wage, while the Senate approved a $7.75 level. The federal minimum wage is $7.25.

Gov. Mark Dayton supports a wage in the area of the House bill.

Drinking immunity

People under age 21 would have immunity from alcohol citations if they call 911 to help another drinker under a bill the Minnesota House passed 124-8.

“We want to encourage a responsible choice even when the choices up to that point have not been so responsible,” bill sponsor Rep. Tina Liebling, DFL-Rochester, said. She said it will encourage friends and peers to call for help during a medical emergency without the fear of getting in trouble for drinking.

The bill only would provide immunity from underage consumption and alcohol possession charges, she said, and not other offenses such as drunk driving.

Rep. Dan Schoen, DFL-St. Paul Park, said the bill would give law enforcement officers more direction and help young people make the right decision.

“I want everybody to know that it’s OK to ask for help,” said Schoen, a police officer.

Rep. Tim Kelly, R-Red Wing, said while college students might use the immunity to make the right decisions, others could abuse it.

“I’m afraid that the high school students will see this as a way to simply get out of something,” he said.

Abortion provision OK’d

Minnesota senators have voted to forbid insurance companies from covering elective abortions when the new MNSure health insurance marketplace begins Jan. 1.

Sen. LeRoy Stumpf, DFL-Plummer, offered the amendment, which was approved on a voice vote.

While state law already bans elective abortion coverage, abortion opponents said it was necessary to clarify that it also applies to the new health insurance sales program set up under the federal Affordable Care Act, better known as “Obamacare.”

“Including this reference in statute is critical to establish once again that insurance companies operating in Minnesota do not have to pay for abortions,” said Andrea Rau of Minnesota Citizens Concerned for Life.

Reporter Danielle Killey contributed to this story.

Smokers would help fund Vikings stadium construction

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Stadium drawing

By Don Davis

Minnesota legislative tax negotiators tentatively approved a plan today to use cigarette tax increase funds and close corporate tax loopholes to provide backup Vikings stadium construction funds.

Gov. Mark Dayton, who opposed cigarette tax increases when he campaigned for office, offered the plan to 10 legislative tax negotiators this morning.

Revenue Commissioner Myron Frans said Dayton does not support taxing sports memorabilia and stadium seats as part of the solution.

Also this morning, a key tax negotiator said she would be comfortable waiting until next year to decide how to help Rochester prepare for a $3 billion Mayo Clinic expansion.

The stadium funding question arose when the prime source of state revenue to repay construction loans fell far short of predictions. The law enacted last year to approve a downtown Minneapolis stadium depended on electronic pull tab and bingo tax revenues.

Dayton’s plan, to be further discussed by tax negotiators as the 2013 legislative session winds down by Monday, calls for increasing cigarette taxes to $2.52 per pack, up from the current $1.23.

The new tax would be the same as Wisconsin, which has the highest rate of any state around Minnesota.

A one-time stock fee on cigarettes to get to the new tax amount would go to fill in stadium funding deficits.

Other than the cigarette tax funds, the Dayton plan would close what some consider tax loopholes on corporations to bring in more revenue in future years if needed.

Pulltab and bingo tax receipts still would be the primary funding system, with the cigarette tax being used to back that up.

Also today, hopes dimmed for Mayo Clinic to get aid it has sought in preparing for a major Rochester expansion.

House Tax Chairwoman Ann Lenczewski, DFL-Bloomington, said that “we have paid far too much time” on the Mayo plan this year. “I’m willing to wait until next year.”

Senate Tax Chairman Rod Skoe, DFL-Clearbrook, said he has his staff working on “more important issues” than the Mayo plan.

Mayo wants millions of dollars to help Rochester improve infrastructure as the world-famous clinic would attract more patients.

Legacy funding debate splits urban and rural senators

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By Don Davis

Rural and urban Minnesota senators battled Wednesday night about how to divide outdoors and arts program funding.

Rural senators won, but just barely.

Sen. Scott Newman, R-Hutchinson, said rural Minnesota is “under assault once again” with an amendment by Sen. Chris Eaton, DFL-Brooklyn Center, that would have reduced the amount of parks money spent in greater Minnesota by millions of dollars.

“The issue is about equity and fairness,” Eaton said before her amendment failed 33-31.

Once the urban-rule debate ended, the overall bill passed 55-10.

The money is part of $485 million to be spent on outdoors and arts projects across the state. It comes from a sales tax increase voters approved in 2008, setting up the “legacy” funding program.

“This is one of the most controversial issues that crosses party lines,” Sen. David Tomassoni, DFL-Chisholm, said about rural-urban divisions, adding that there is much more state-owned park land in rural areas.

“We need balance,” Eaton said. “The current bill is not balanced. Members, we are just asking for more fair distribution of legacy money.”

The overall bill divided parks money: 40 percent to Twin Cities parks, 40 percent to rural parks and 20 percent to state parks. Eaton wanted to move it to 43 percent to the Twin Cities, taking it away from rural parks.

Eaton said Twin Cities taxpayers are funding rural parks. “The money is not coming from the rural funds.”

Sen. John Pederson, R-St. Cloud, said many Twin Cities residents visit parks in rural areas because the three urban state parks do not offer experiences that can be enjoyed outside the metropolitan area.

Senate Majority Leader Tom Bakk, DFL-Cook, said that when the legacy constitutional amendment was being discussed in 2008, much of the talk was about a need “to maintain our very, very valuable natural resources.”

Forestry and parks programs are the “stepchildren” of the Department of Natural Resources, Bakk said. “We have a responsibility to preserve them.”

While Bakk said the Twin Cities have plenty of taxes available to pay for parks, urban and suburban lawmakers disagreed.

Sen. Foung Hawj, DFL-St. Paul, said residents in his district cannot afford to visit state parks outside the Twin Cities, let alone pay for rural parks.

Legacy bill sponsor Sen. Richard Cohen, DFL-St. Paul, was a rare urban opponent of the amendment to spend more funds in the Twin Cities.

Cohen said some of his best memories come from spending time in rural state parks. “I cannot, obviously, get that experience in the Twin Cities.”

The legacy spending plan senators debated Wednesday night would spend $95.6 million on outdoors projects such as conservation. Another $191.2 million would be spent to clean Minnesota’s water — projects such as drinking water protection, monitoring streams and reducing pollution.

Parks and trails would receive $83.5 million in the next two years, while arts and culture projects would get $115 million.

Nearly 100,000 acres would be affected by the legislation, and its funds would pay 47 workers.

Senators unanimously approved a provision to ban out-of-state travel by people funded with money from the arts portion of the legacy program. News stories have reported about expensive trips artists have made to other countries.

A bill that divides legacy money differently than the Senate would already has passed the House, so negotiators likely will try to produce a compromise bill in the next few days.

No tax solution yet as Minnesota legislative session winds down

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Capitol visitors want more transportation money

By Danielle Killey and Don Davis

Taxes remain a key issue as the Minnesota House, Senate and governor’s office negotiate a final budget deal in the last days of the 2013 legislative session.

House-Senate tax conference committee members exchanged a number of proposals Wednesday, but did not come to a solution. They have agreed to raise about $2 billion in new revenue, but differ on how to do it.

Members are slowly coming closer to creating a new fourth-tier income tax bracket for the richest Minnesotans, likely to land somewhere between 8.94 percent and 10.6 percent. The current top tier rate is 7.85 percent.

The House also still wants a surcharge on those making $500,000 or more for up to two years, to repay schools for money the state borrowed from them. That would add up to nearly $900,000 on top of the $2 billion.

Committee members still disagree on alcohol and cigarette tax increases. The House proposes an alcohol tax, but the Senate does not include it, and they had not landed on a final cigarette tax increase amount by Wednesday evening.

House Taxes Committee Chairwoman Ann Lenczewski, DFL-Bloomington, said the House will propose Gov. Mark Dayton’s plan to fund a shortfall in Vikings stadium construction money, but the governor’s plan has not been released.

The members also are exploring sales tax changes such as expanding it to warehousing and storage, which primarily would affect businesses. The House proposed a 13 percent sports memorabilia tax to bring money to the state’s general fund as well.

Former tax chairman Rep. Greg Davids, R-Preston, said no matter where the committee lands, the total amount they plan to raise is too high for Republicans. “It’s so far gone for anyone in our caucus to support.”

Davids acknowledged that Republicans have little say in the final plan because Democrats have enough votes as the majority in the House and Senate to pass it.

“When you have no balance, this is what you get,” Davids said.

The Minnesota Constitution requires legislators to wrap up their work for the year Monday, and while tax debate continues, the first negotiated budget bills are headed to final votes.

A jobs and economic development bill was merged with one setting solar energy standards and was due for a late Wednesday House debate.

Major finance conference committees with work remaining Wednesday included those dealing with public school education, health and human services, environment and agriculture, transportation, public safety, higher education and state departments.

The House and Senate have passed their own versions of finance bills, and conference committee negotiators are merging their work with a budget plan offered by Dayton.

With most conference committee work expected to be done by Friday night, the end of the session likely will be busy with lawmakers passing the entire $38 billion, two-year budget in its final hours.

Republicans have said Democrats might struggle to meet their deadline.

“We’ve got several moving parts,” Davids said. “I don’t know if they can get done on time.”

Earlier this week, Senate Majority Leader Tom Bakk, DFL-Cook, worried aloud that Republicans could filibuster and delay progress on spending bills that make up the budget.

“It is possible they could talk things to death and run out the session,” Bakk said.

Democrats control the House, Senate and governor’s office and can pass nearly every bill without Republican help. However, a proposed $800 million public works finance bill does need some GOP votes, and the party’s legislative leaders have not been very supportive.