Tag Archives: budget

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

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.

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.

Update: Dems release budget and tax guidelines with details to come

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Bakk

By Don Davis

Minnesota political leaders have spent months preparing state budget plans, and eight days before the Legislature must adjourn for the year they announced they have reached agreement on some tax and spend guidelines.

Included in the budget framework is that the state would not raise sales taxes on consumer goods, such as clothing, but probably would add taxes businesses pay on sales to other businesses. They plan to raise income taxes on the top 2 percent of Minnesota earners and put a surcharge on taxes paid by the richest of the rich.

Cigarette taxes would go up under the plan, and negotiators could raise taxes on alcoholic drinks, too.

“It is a budget that is going to work for Minnesota and put Minnesotans to work,” Gov. Mark Dayton said Sunday when he announced the agreement with Democratic legislative leaders on their $38 billion, two-year budget plan that aims to raise taxes $2 billion.

Dayton, Senate Majority Leader Tom Bakk, DFL-Cook, and House Speaker Paul Thissen, DFL-Minneapolis, briefed reporters on the budget deal Sunday afternoon. The Legislature must adjourn by May 20, and the trio of leaders said House-Senate conference committees will negotiate details, such as how much the various taxes would increase.

“On the tax side, the tax committee is going to work out all the details,” Bakk said.

Bakk said the budget outline will make sure two Minnesota priorities are met: more money for education and property tax relief.

When Democrat Dayton released his budget plan in January, he called for higher sales taxes at the consumer and business levels. The idea produced protests from many segments, so he dropped them from a revised plan and pledged to oppose Senate efforts to revive the concept.

Dayton said there is nothing in the tax plan, other than a cigarette tax hike, “that will affect middle income taxpayers.”

However, after reporters pressed him, he admitted that “any tax on business, economists will say, could filter down.”

Eventually, he added about the middle class paying more: “I can’t say they won’t.”

Some of the guidelines Dayton, Bakk and Thissen said they are passing to conference committees include:

– Education at all levels would receive more than $1 million more than under the current two-year budget.

– The sales tax would not rise on consumer goods, including clothing, but businesses could pay sales tax on goods sold to other businesses.

– Income taxes would go up on people in the top 2 percent of Minnesota earners, couples with $250,000 or more annual taxable income and individuals making $150,000 or more.

– An income tax surcharge would be added for Minnesota’s richest of the rich, with proceeds going to help repay money the state has borrowed from school districts. The level of the surcharge would not be decided until the current budget ends June 30.

– Cigarette taxes would rise and taxes on alcoholic drinks also could go up.

– Some business tax breaks would disappear.

– All-day kindergarten would be funded across the state.

– The state would spend $400 million in property tax relief, such as by increasing aid sent to local governments.

Thissen said legislative pay could be raised under the budget, but the leaders did not make that decision. There also was no decision on whether to raise the gasoline tax, as the Senate voted last week.

Also awaiting a decision is how to back up lagging Vikings stadium construction funding.

The three leaders said the tax conference committee will decide the stadium issue, but Dayton said that “we have a couple ideas.”

Taxes on electronic pulltabs are far short of expectations, and there has been a demand from legislators and others to find a more reliable source of funds.

“We are going to get a stable source that is more than sufficient,” Dayton promised, without giving a hint about how that might look.

An $800 million public works funding bill, to be financed by the state selling bonds, was included in the budget framework.

House Minority Leader Kurt Daudt, R-Crown, said Republicans are not interested in that large of a bonding bill. Many Republicans have said they support renovation work on the Capitol building, but little else this year.

Daudt and Senate Minority Leader David Hann, R-Eden Prairie, said that when all Democratic-Farmer-Labor taxes are added up they could approach $3 billion in the next two-year budget cycle.

If Democrats vote together, Republicans do not have the votes to stop any spending or tax bill other than bonding.

Hann, Daudt

Legislative notebook: Senate passes smaller minimum wage

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By Don Davis

The Minnesota Senate voted 39-28 Wednesday to approve a minimum wage far lower than the House and governor favor.

Senators approved raising the hourly minimum wage to $7.75 an hour in two years for large employers, up from the current $6.15. Small businesses could continue to pay $5.25 an hour.

The House has approved a $9.50 wage, in line with Dayton’s wishes.

House and Senate bills would automatically raise the minimum wage based on inflation after 2015.

A House-Senate conference committee will have to merge the varying plans.

“This strong workforce has delivered a high quality of life for Minnesotans, but, unfortunately, Minnesota has fallen behind,” bill sponsor Sen. Chris Eaton, DFL-Brooklyn Park, said. “It is time to stand up for these working families.”

She said she would like a higher wage, but was afraid it would not pass the Senate.

Eaton’s bill does not include a House-passed provision to require farmers to pay their employees overtime who work more than 40 hours a week. Under her bill, farm employees would continue to be paid overtime for working more than 48 hours.

Also missing from the Eaton bill is a House provision that would double the current requirement that new parents get six weeks of unpaid leave.

Republicans said that raising the minimum wage will hurt businesses, especially in rural Minnesota.

Sen. Gary Dahms, R-Redwood Falls, said he fears that a higher minimum wage would cause restaurants and other businesses that pay low wages to lay off staff.

“The (profit) margins are very slim” in many businesses that pay near the minimum wage, Dahms added.

Elections changes OK’d

Minnesotans would not need to give a reason for casting an absentee ballot under a bill the House approved 74-60 Wednesday.

Besides the no-excuse absentee voting, the bill is designed to reduce unlawful felon voting, would launch an electronic poll book pilot project and expand mail balloting.

“This bill takes common sense steps to protect the integrity of Minnesota’s election system while making it easier for more people to participate in the democratic process,” bill sponsor Rep. Steve Simon, DFL-Hopkins, said. “Our state has a proud history of leading the nation in voter turnout. We need to make sure that tradition continues into the future.”

Secretary of State Mark Ritchie said the bill would save Minnesota elections administrators money.

Stadium backup planned

Gov. Mark Dayton said he expects the Legislature to approve a back-up plan for funding the state portion of a nearly $1 billion Vikings football stadium.

The governor refused to reveal details of what he has discussed with legislative leaders, but said that taxing sports memorabilia is not an option now. Also, he said, asking the Vikings to pay more for their stadium is not in a plan.

Solar emphasized

The House passed a measure 70-63 late Tuesday requiring some Minnesota electricity to come from solar power.

The bill would require 4 percent of state electricity to come from solar by 2025 and increase the percentage of renewable energy in the state to be 40 percent by 2030 for investor-owned utilities. Renewable energy now is required to be 25 percent by 2025.

Budget goal

Legislative leaders and Democratic Gov. Mark Dayton say they hope to reach an agreement by week’s end about how much to spend and tax in the two-year, $38 billion budget they are considering.

“There are a number of unresolved issues,” Dayton said, and budget and tax differences among him and the House and senate are shrinking.

A key issue is paving over differences among Dayton and Democratic legislative leaders’ tax plans, but the governor said: “I like the direction we are moving in.” The key players will not talk much about it.

The governor did say that he does not expect the Legislature to pass a House-proposed income tax surcharge to repay schools for money the state borrowed from them.

Dayton plans to meet with Republican officials this morning after several meeting with Democrats who control the House and Senate in recent days.

The Legislature must adjourn by May 20 and pass a two-year budget by then.

Graduation test fails Senate test

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Sens. Hayden and Rosen

By Don Davis

Minnesota senators joined the House on Thursday night in voting to eliminate a law requiring students to pass a test before graduating high school.

The Democratic-Farmer-Labor education bill, spending nearly $15.7 billion in the next two years, passed 35-28 after Republicans refused to vote for 10 minutes when Senate President Sandra Pappas, DFL-St. Paul, did not call on two GOP members seeking to speak. Most Republicans eventually put up their “no” votes, but some sat in their seats and never voted.

Three Democrats joined Republicans in opposing the measure after a debate lasting more than nine hours.

The bill would eliminate the test high school students now must pass before graduating. Under the bill, students could graduate once they receive the required number of academic credits.

The Senate bill would require schools to work with students to make post-high school plans for college or a career. Students showing enough achievement by 11th grade would take a college entrance exam and be encouraged to attend college.

Students deemed not ready for college would receive remedial aid.

Republicans said the DFL plan would leave a question about whether students are qualified to receive a diploma. But Education Finance Chairman Chuck Wiger, DFL-Maplewood, said the bill requires graduates to successfully receive specific credits to graduate.

“It is more than seat time,” Wiger said.

Sen. Greg Clausen, DFL-Apple Valley, said all students should not be judged by the same test because they “have different abilities, different skills, different interests. … They don’t learn at the same pace.”

Sen. Branden Petersen, R-Andover, said students need to pass the standard test or they would “graduate from high school under false pretenses.”

Sen. Sean Nienow, R-Cambridge, said killing the test means Minnesota would have “a complete lack of standards. … They don’t have to prove they know anything.”

An amendment to restore the graduation test failed 34-31.

The overall bill would spend nearly $15.7 billion in the next two years, the largest single portion of the state’s $38 billion budget.

The Senate-passed bill is similar to what the House approved earlier this week and Democratic Gov. Mark Dayton wants. The three funding plans will go to a conference committee to work out differences before final House and Senate votes next month.

The Senate and House bills would provide funds for free all-day kindergarten for all Minnesota students.

Clausen said all-day kindergarten helps prepare students to eventually succeed in the workforce.

“All-day kindergarten provides a foundation for learning, improves student achievement and reduces achievement gaps,” Clausen said. “All students need to have access to quality all-day kindergarten programs.”

He said schools that now offer the option for a fee charge $300 to $400 per month, which is “creating educational winners and losers.”

The education bill also would:

– Provide $50 million in scholarships so 7,000 children in poor families may attend preschool.

– Increase per-pupil state aid by an average of $526 in the next two years.

– Require schools “to assist all students to explore college and career interests.”

– Continue mathematics, reading and writing tests, but not require passage to receive a diploma.

– Provide $150 million in property tax relief.

– Eliminate current requirement that teachers pass a test before being licensed.

– Require youths to attend high school until they are 17, one year longer than now required.

– Allow Tracy schools to levy remaining disabled access levy in the next two years.

– Let Norman County West levy up to $27,500 each of the next two years to repair an elevator.

– Permit Cyrus and Morris school districts to issue up to $1 million in bonds to demolish the Cyrus school building as the districts consolidate.

Reporter Danielle Killey contributed to this story.

State House poised to pass $15.7 billion education funding bill

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Marquart

By Don Davis

Education funding, the largest single part of the Minnesota budget, would rise $550 million in the next two years under a House Democratic plan being debated this afternoon and tonight.

Early-childhood education, including funding all-day kindergarten statewide, is the foundation of the $15.7 billion, two-year plan.

“We are going to get every single child to the starting line on time,” said Rep. Paul Marquart, DFL-Dilworth, House education finance chairman.

Among items in the bill representatives are expected to pass:

– Increasing per-pupil payments to school districts by $209.

– Adding $50 million to various early-childhood programs.

– Paying back schools $850 million in loans by adding a surcharge on the richest Minnesotans’ income.

– Replacing the existing graduation test with a new system of evaluation beginning in middle school.

Among the major goals Marquart laid out is to make sure every student graduates from high school by 2027.

Minnesota schools show a 76 percent graduation rate, the chairman said, but students of color achieve a far lower rate.

To increase graduation rates, the Marquart plan requires school districts to prepare plans with a goal of graduating every student. The state would check to see how districts are doing and if a district fails three straight years, the state could take over district administration.

The plan would replace current law that requires high school students to pass a test before graduating.

A coalition of businesses support the existing test and in a letter to representatives coalition leader Charlie Weaver called its elimination “devastating.”

Weaver called the Marquart plan “the elimination of state expectations for student achievement on the state’s reading, writing and math standards to earn a high school diploma.”

Half the states have such tests, Weaver said. “Minnesota is poised to return to the time when we had no common expectation for high school graduation.”

However, Marquart said, Federal Reserve officials say the state’s economy could get a $5 billion-a-year boost if what he sees as a more effective education system is implemented.

Eken deciding pay vote: ‘Not worth sacrificing good parts’

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By Don Davis

Kent Eken sat with 65 other Minnesota senators for several long minutes late Tuesday afternoon, waiting on the outcome of a vote that would approve state legislative and executive branch pay raises.

With two big voting boards in the Senate chamber showing a 33-33 tie on the measure, which would have defeated it, the Twin Valley Democrat changed from a “no” vote to “yes,” and acting President Sen. Jim Metzen, DFL-South St. Paul, quickly ended voting so the bill passed 34-32.

With his change of heart, Eken became the deciding vote for the pay raises and other state government funding in the bill.

“The one thing I didn’t agree with in this bill was the pay issue,” Eken told Forum News Service. “I originally voted no, but when I saw that the votes weren’t there to pass the bill I thought it wasn’t worth sacrificing all of the other good parts of this bill.”

Among items Eken said he supported was additional spending on veterans’ programs and a provision that would allow the state Veterans Affairs Department to open a veterans’ nursing home in Beltrami County. The bill does not appropriate money for the project and Veterans Affairs officials say their priority is to finish work on the Minneapolis Veterans’ Home before looking at opening new nursing homes.

After the vote, the first-year senator promoted a constitutional amendment proposal he made as a House member. It would remove pay decisions from the Legislature.

“I really do think it is a conflict of interest for us to be dealing with it,” Eken said.

Eken’s change left five Democrats and all Republicans opposing the bill.

The only mention of the raises in the Senate came when bill sponsor Sen. Tom Saxhaug, DFL-Grand Rapids, quickly described the bill. He did not provide specifics on the raises, but it is a politically sensitive subject and senators were well aware of it.

“It’s a tough vote,” Senate Majority Leader Tom Bakk, DFL-Cook, said.

The overall bill would spend $924 million in the next two years, funding the Legislature, executive offices and a range of departments from the Arts Board to Historical Society to Minnesota Management and Budget.

For lawmakers, the bill would increase salaries from the current $31,000, which has been the standard for nearly 15 years, to $42,000 in 2016.

Bakk said he supports the raises because without them the Legislature could be dominated by the retired, rich and those who cannot find other jobs.

“It is about the next generation of people who come to the Senate,” he said.

Democratic senators took an hour-long break during debate on the bill to talk privately. Bakk said they considered removing the pay provisions, but opted to leave them in.

Two Republican leaders decried the raises, saying they show how Democrats want to spend more money, but said they would accept the money if the Legislature eventually approves.

Democratic Gov. Mark Dayton said he would donate any raise to charity, but Senate Minority Leader David Hann, R-Eden Prairie, and Assistant Minority Leader David Thompson, R-Lakeville, said they would follow whatever law Democrats in charge of the Legislature pass.

“It was part of a larger bill,” Thompson said. “The focus needs to be is what are the Democrats doing here generally.”

“This is part of the DFL budget,” Hann said, hinting the higher pay could become a campaign issue.

A compensation council recommended the higher salaries for legislators, the governor, attorney general, secretary of state, auditor and judges. The Legislature and governor must approve.

The governor, whose $120,000 annual salary ranks 32nd in the country, would receive an increase to $128,000 in 2016. Other top state officials would receive similar-sized raises.

A similar pay raise is not in a related House bill, but a conference committee could insert it next month.

Also in the state departments finance bill:

– The Sunset Commission is killed. Legislators established the commission to review state agencies now and then to see if they should continue to exist.

– State and local officials on military duty would continue to receive their government pay.

– Red and white striped or red, white and blue striped barber poles only could be used by barbers.

– Cosmetologists, nail technicians and others would be required to take continuing education courses.

– House and Senate budgets would increase 9 percent.

Legislative notebook: Tax talk divided

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By Don Davis

A parade of lobbyists picked apart proposals by House and Senate tax committees Tuesday while others gave the plans their blessings.

Among dozens of testifiers was Frank Orton of Walker, whose company owns 15 northern Minnesota convenience stores. Ones in East Grand Forks and Moorhead would be hurt by a proposed $1.60 per-pack increase in cigarette taxes, he said.

“It is going to affect all border cities drastically,” he added, not just those bordering North Dakota like two of his stores.

“We are competing with two hands behind our back when competing with North Dakota,” Orton said, and if taxes increase “you might as well cut the hands off and our legs as well.”

Orton also told Gov. Mark Dayton about his concerns when Dayton visited Moorhead recently.

Minnesota liquor lobbyists complained that a House provision to raise alcohol taxes could add $2 in tax onto the cost of a 12-pack of beer.

Minnesota-based brewers would get a tax break, but imported drinks would cost an average of 7 cents more.

City leaders praised a provision to simplify and add money to Local Government Aid, a program that provides state funds to cities.

“This is, in our view, a very historic reform,” said lobbyist Tim Flaherty of the Coalition of Greater Minnesota Cities.

But Sen. Paul Gazelka, R-Nisswa, complained that the bill would reduce the percentage of LGA going to rural cities.

Flaherty said the formula is fair because it would give LGA to many suburbs that now receive none. But, he added, more money is needed than now is spent on LGA.

“We only support the formula with the additional $80 million,” Flaherty said. “To cement this reform into the future, we are going to need to see moderate increases in the future.”

Sen. Julianne Ortman, R-Chanhassen, complained that there has been no estimate about the full cost of a proposal to begin taxing clothing, a part of the Senate tax bill. She said if clothing is taxed, fewer people will visit Minnesota — especially Mall of America — which would affect other sales such as airline tickets and motel rooms.

911 calls protected

The Senate unanimously approved a bill to allow criminal charges against those who call 911 under false pretenses.

Sen. Susan Kent, DFL-Woodbury, said her bill “creates the option for a prosecutor to charge an individual with a felony if the individual intentionally reports a fictitious emergency with the intent of getting an emergency response, and if an emergency responder or someone else is seriously injured or killed as a result of the emergency.”

The bill also makes it a felony to use communications devices to interfere with, overload or otherwise prevent the emergency call center’s system from functioning properly.

Education bill advances

A bill increasing public school spending has passed the House Taxes and Ways and Means committees.

The bill by Rep. Paul Marquart, DFL-Dilworth, supports a goal of by 2027 reaching 100 percent high school graduation, 100 percent literacy by third grade and 100 percent career and college readiness by graduation.

The bill would provide money for all-day kindergarten statewide and appropriate $50 million for pre-school scholarships. Also, basic state school funding would increase 4 percent.

“This bill is going to have a significant positive impact on the economic future of this state,” Marquart said. “Investments in proven programs like all-day kindergarten and early childhood scholarships combined with additional resources for our schools will put our children on the path to the world’s best workforce.”

The full House is to vote on the bill next week.

Judiciary funded

Senators Tuesday approved 47-18 spending nearly $1.8 billion on judicial, corrections and related purposes for the next two years.

That is $88 million more than is being spent in this budget cycle. The increase includes giving judges and justices 3 percent raises on July 1 and 4 percent increases the following year.

Funding also includes new personnel for the Tax Court and increased technology spending.

The Corrections Department, which operates state prisons, would get $487 million of the budget.

Border city aid

The House tax bill moving through committees includes $1.5 million to help Moorhead, Dilworth, Breckenridge, East Grand Forks and Ortonville compete with lower-tax North Dakota.

For years, the cities have received help to lower taxes for new and expanding businesses. For instance, businesses could receive sales tax exemptions for new equipment investments, get tax credits for hiring new workers or expanding facilities and receive property tax credits on new or expanded facilities.

“Our border communities are in a very unique situation,” said Rep. Jay McNamar, R-Elbow Lake. “Obviously, we are working hard to provide options for all of the communities in Minnesota, but when you’re neighboring another state, you deal with a whole different set of circumstances.”

Decker highway named

Gov. Mark Dayton Tuesday signed a bill naming a portion of Minnesota 23 in Stearns County as Officer Tom Decker Memorial Highway.

The bill was brought by Rep. Jeff Howe, R-Rockville, and Sen. Michelle Fischbach, R-Paynesville, to honor the police officer who died in a Nov. 29 shooting. Decker, whose family attended the bill signing, was a six-year Cold Spring Police Department veteran.

Businesses want test

A coalition of businesses is buying broadcast, online and other advertising urging lawmakers to keep a test high school seniors must pass before receiving their diploma.

“We don’t like to get rid of the consequence,” said Charlie Weaver, representing the coalition.

Legislative Democrats propose doing away with the test that first was required in 2000. Known as the Basic Skills Test, Weaver said it especially helped minority students graduate.

Weaver said businesses are concerned because they are worried about having enough educated employees. He said the businesses are spending “six figures” to finance the statewide campaign.

Legislative notebook: Bills would keep Sanford out of U hospitals

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By Don Davis

Two Minnesota lawmakers are offering legislation to prevent Sanford Health from controlling University of Minnesota hospitals.

Sanford, headquartered in South Dakota and North Dakota, is looking at taking over Fairview Health Services, which operates the university hospital system.

“If we need to pass legislation to protect our University of Minnesota hospitals, then that is absolutely what we should do,” Rep. Dan Schoen, DFL-St. Paul Park, said Monday. “The U of M hospitals are too important to our state’s education system, our economy and our health care market to not be controlled by a Minnesota entity.”

The legislation comes on the heels of a Sunday hearing called by Attorney General Lori Swanson about the potential takeover.

Rep. Joe Atkins, DFL-Inver Grove Heights, wrote Fairview Chairman Chuck Mooty a letter on the situation.

“It should not surprise you that I, along with most of my colleagues in the Minnesota House, have heard from many people with deep concerns that an institution of such great importance to Minnesota might be controlled by a board in Sioux Falls, S.D.,” Atkins wrote.

The Atkins-Schoen legislation would place a one-year moratorium on an out-of-state organization buying Fairview. Atkins plans an April 17 hearing on the bill and he asked that Mooty be there.

Atkins told Mooty that among his concerns is that even as the company has acquired health systems throughout several states, “its center of gravity has very much remained in Sioux Falls.” Only three of Sanford’s board members are Minnesotans, the lawmaker said, while six of the 15 live in Sioux Falls.

In response to Sanford’s proposal to take over Fairview, the University of Minnesota has proposed a similar action of its own.

Gov. Mark Dayton said he does not know of anything the state needs to do about the situation now. “This process will go on for months,” he said.

However, because of the “huge public impact” hospital decisions could make on the university and Minnesotans, he is watching the situation. He said he was happy to hear that Mooty said he would not proceed with a Sanford merger if the university objected.

Dayton said he thinks the university can run its own hospital system, but wants to make sure before he takes a firm position on the merger issue.

“It’s a big, big financial commitment to the U and the state,” he said of the university taking over its hospital system.

Stadium money talk

Gov. Mark Dayton is inviting key lawmakers to discuss how to plug Vikings stadium funding shortfalls.

Electronic pulltab profits are bringing in far less than projected last year to pay the state’s portion of a nearly $1 billion downtown Minneapolis stadium. Dayton said he is not worried, but action is needed before lawmakers adjourn for the year by May 20.

“I think this has been blown so far out of proportion,” he said Monday.

Bonds the state planned to sell in August, for the first stadium construction costs, cannot be let then, he said. “Given all of the turmoil … we can’t issue the bonds.”

The public and legislators demand that “we put this thing to rest,” Dayton added.

A Minnesota Lottery official’s comment that his agency could introduce a slot machine-like game would be “part of the discussion,” the governor said.

In the meantime, Republicans who opposed the e-pulltab stadium funding solution are offering their ideas.

Sen. Roger Chamberlain, R-Lino Lakes, said that he is looking at a couple of things discussed last year, including taxing seats and items sold at the stadium. Another possibility he said he is examining would tax businesses in the area of the stadium that benefit from the new facility.

The state would need to repay $20 million to $40 million in stadium loans annually over the next several years. Dayton said that is not significant given the state’s $38 billion, two-year budget.

Transportation bill delayed

Democratic legislative transportation leaders delayed announcement of their transportation funding plan soon after Gov. Mark Dayton said Monday that he does not support increasing the gasoline tax.

Leaders planned to roll out their plan, including a tax increase, at 1 p.m. Monday. Now, they plan to announce a proposal on Wednesday, after seeing what Dayton could support.

“I don’t support a gas tax,” Dayton said. “I don’t think the people of Minnesota support it.”

Still, Dayton said, more money is needed for highways and other transportation projects. He said the past three governors, two Republicans and an Independence Party member, have not provided needed funds.

Wire fraud opposed

The Minnesota House on Monday approved legislation aimed at protecting older Minnesotans from scams.

Thousands of Minnesotans have lost millions of dollars after being scammed into transferring funds. The scam artists often target the elderly, convincing them the money is going to help a relative in need.

“These scams, (which) include posing as a victim’s relative or falsely promising large lottery winnings and cash prizes, predominantly target the elderly.” AARP State Director Michele Kimball said. “They require the victims to send funds through wire transfers, but instead of going to help a grandson who is supposedly in trouble, the money goes to crooks in places like Jamaica.”

Living on minimum

Rep. Jason Metsa plans to live on minimum wage for a week, an effort to highlight legislation aimed at raising the wage.

“I can’t possibly know the reality of the day-to-day struggles faced by people living on minimum wage, which is currently $7.25 an hour,” the Virginia, Minn., Democrat said. “But as (the bill) is considered by my fellow lawmakers, this is an attempt to better understand an economic situation many of us have never been exposed to.”

The legislation would raise the minimum wage to $9.95.

Federal failure costs state

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By Don Davis

The federal government’s failure to agree on how to fix its debt problem could cost Minnesota more than $90 million this year.

Early numbers show schools and health programs could be among those most affected, a legislative committee learned Friday.

Still, many questions remain, such as when funds will be cut, what restrictions will be placed on state agencies and just how much money will be lost.

The committee, composed of legislative leaders and financial chairmen, heard from their fiscal experts and the state budget director, but did not get all the answers they want.

“There are a lot of unknowns that remain,” Budget Director Margaret Kelly said.

While preliminary numbers from Washington show Minnesota losing $90 million, the number will be higher, Kelly said. “The final amount of reduction is unknown.”

Rep. Diane Loeffler, DFL-Minneapolis, said the consequences could be severe. Sixty percent of the state Health Department’s budget comes in federal funds, she said, so the ability to respond to emergencies could be severely impaired.

For schools, House fiscal analyst Bill Marx said, the impact could be a loss of $10 million from special education programs and nearly $2 million from a program to improve teacher quality. Another $13 million that local education agencies expected may not appear.

Head Start funds for young children also would be cut.

Lots of health and human services programs also would be trimmed if Congress and the president do not resolve their differences quickly.

Medicaid administration would lose $35 million. Medicaid, which Minnesota calls Medical Assistance, funds health care for the poor.

Half of a children’s insurance program would be chopped, costing the state $11 million.

The Medicare cuts would especially hurt rural hospitals because a higher percentage of their patients are elderly, hospital lobbyist Mary Krinkie said.

The 2 percent Medicare cuts to health care providers — including hospitals and doctors — come at a time when hospitals fear state lawmakers will add a surcharge on their bills.

In rural hospitals, more than half of the patients receive federal Medicare payments, Krinkie said.

In previous Medicare cuts, she added, rural hospitals were exempt, but not this time.

Since the 2 percent cut just started Monday, Krinkie said it is too early to know how it will affect health care providers.

More than 800,000 Minnesotans are on Medicare, which provides the elderly with health insurance.

Sequestration was written into a federal law designed to force Congress and the president into fixing a soaring debt. But no deal was worked out, so sequestration has begun to make automatic cuts in most federal programs.

Political notebook: Boomers to cost

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Marquart

By Don Davis

Baby boomers will make writing the state budget harder, reduce the Minnesota labor force and cause state health care spending to soar, State Demographer Susan Brower said.

“Aging pressure” is how Brower termed the issue.

The demographer said aging boomers will “place new pressures on the state budget, especially in the areas of health and long-term care.”

An older population means more money would be needed for a Medicare supplement program, she said, as well as programs that fund health care needs of elderly, poor and disabled Minnesotans.

One of the big issues will be state funding for long-term care, such as nursing homes. Brower presented numbers showing that a third of baby boomers do not know how they would pay for long-term care and nearly 20 percent expect to just rely on government-paid programs.

If the state is to pay health expenses, she said, legislators need to understand that those costs rise dramatically as a person ages. Annual health care costs are $6,500 for those ages 45 to 64, she said, but soar to $10,700 for those older than 65.

While baby boomers head to retirement and wait in doctors’ offices for care, they will leave behind a gap in the state workforce.

Brower said the nearly 1.5 percent annual growth in the workforce size from the late 1990s will shrink to 0.2 percent by 2025. As that creates a worker shortage, Brower said, education needs to pick up the slack to train more efficient workers.

Rep. Paul Marquart, DFL-Dilworth, said what population growth there is will come from minorities such as Hispanic and black Minnesotans, so the state education system needs to make sure they learn as well as white students.

“That will be huge for economic competitiveness,” Marquart said.

 Budgets coming

The rest of April will be packed with numbers as House and Senate Democrats release their budget plans piecemeal.

In coming days, the Senate will announce its state department, transportation and judiciary budget plans.

The House expects to see its health and human services funding bill soon, too.

“We’ve shifted into high gear on the budget,” said Senate Majority Leader Tom Bakk, DFL-Cook.

The way things work at the Legislature, each budget committee chairman is in charge of drawing up a budget in his particular area after legislative leaders decide how much is available to spend.

There is general agreement among Democrats who control the Legislature and Democratic Gov. Mark Dayton to spend about $38 billion in the next two years. But they differ on specifics about how much to spend in each area.

Bakk said the DFL budget outlines, being filled out this month, are good starts, but not the end of budget changes. “This is going to take more than one budget cycle to get us where Minnesotans want us to be.”

 Bonding announcements set

Two of the three public works funding bills are due out soon, with plenty of questions about whether they can pass.

Gov. Mark Dayton plans to let Minnesotans know early in the week how he would spend money borrowed for public works projects around the state. The House expects to release its public works plan Tuesday, but senators’ suggestions will come later.

Their bills are expected to propose spending $750 million to $800 million, to be paid by the state selling bonds.

Republicans say a bonding bill is about the only place where they have a say since Democrats control the Legislature and governor’s office, and they generally do not want to borrow the money. The state constitution requires bonding bills to pass with a three-fifths vote, meaning Democrats cannot pass the bill on their own.

Dayton is expected to ask for more than $100 million to begin a state Capitol renovation project that eventually is expected to cost more than twice that.

Republican leaders said Friday that they want the Capitol work, but would not commit to supporting a bonding bill this year.

“The bonding project I want to do is the Capitol,” said Senate Majority Leader Tom Bakk, DFL-Book.

 Hospital changes eyed

Minnesota officials are keeping a close watch on proposed changes to Fairview Health Systems.

Attorney General Lori Swanson scheduled a Sunday hearing about South Dakota-based Sanford Health’s proposed Fairview takeover. The next day, University of Minnesota President Eric Kaler set a meeting to discuss the possibility of the university running Fairview.

Fairview is home to the University of Minnesota Medical Center and clinics.

“We are looking closely,” Deputy Senate Majority Leader Jeff Hayden, DFL-Minneapolis, about the situation.

However, he added, it is too soon to know if the Legislature needs to get involved. “It’s a fluid situation.”

Beyond the university situation, Swanson is investigating the nonprofit health organization. Nearly a year ago Fairview said it would hunt for a new chief executive officer, but that position remains open, Swanson said.

Swanson, who regulates charities, said she is concerned that a Minnesota charity could be run by an out-of-state organization.

Sanford operates hospitals, clinics, nursing homes, pharmacies and other health-related facilities in South Dakota, Nebraska, Iowa, North Dakota and Minnesota.

Bakk likes work

Senate Majority Leader Tom Bakk’s recent vacation made him realize he is not quite ready to retire.

Bakk and his family traveled to Argentina over the Easter-Passover break and the end of March, where he said he and his wife had a successful hunting excursion — including him shooting a water buffalo.

He said the vacation was great but also made him realize how much he loves his job.

On his way home, Bakk took time to reflect. At nearly 59, he said thoughts of retirement hover, but he realized he was looking forward to getting back to work.

“I started thinking, ‘If I didn’t have a job to go back to, what would I do?’ ” Bakk said. “I think I’ll quit thinking about retirement.”

Social media frustrating

Former U.S. Sen. Norm Coleman says social media take too much time.

“I must confess to almost giving up on Facebook,” he wrote on his Facebook page. “Between all the obligations of the real world — family, work and life — as opposed to the virtual world — Facebook and Twitter become so, so time consuming. My humble apologies to all my Facebook friends for not being very responsive.”

Danielle Killey contributed to this report.