Judge wants change, Minnesota sex offender program remains same

By Don Davis

A federal judge’s pressure on Minnesota officials to change how the state deals with sex offenders does not appear to be producing results.

Gov. Mark Dayton said Thursday that he does not expect this year’s Legislature to act on the situation, and legislative leaders Friday showed no indication the governor is wrong.

That comes after Judge Donovan Frank wrote in a court order: “The time for legislative action is now.”

If state leaders do not take action, Frank could take control of the Minnesota sex offender treatment program, where serious sex offenders are kept in prison-like settings after serving their prison sentences. Former Minnesota Chief Justice Eric Magnuson and others who are urging lawmakers to act say Frank could order changes in the program — changes that could result in much higher costs to the state — or he could order release of at least some sex offenders.

Just one sex offender has graduated from the program, leading to a lawsuit by others who say the program is more prison than treatment.

House Speaker Paul Thissen, D-Minneapolis, downplayed the possibility that Frank will take over the program. He said that Frank’s order for the state to fund four experts’ study of the program should take some time, and lawmakers may not need to act right away.

However, he and House Majority Leader Erin Murphy, D-St. Paul, said they hope for a bipartisan agreement on the issue.

That does not appear close. House Minority Leader Kurt Daudt, R-Crown, said he thinks the current treatment program is constitutional, although he could support some changes.

Since Democrats control the House, Senate and governor’s office, Daudt said, they are the ones who should lead on the issue.

Murphy said that state leaders not agreeing on the solution hurts their efforts.

“When people chose to politicize this issue, it tends to confuse Minnesotans,” she said.

Dayton blamed House Republicans for failure to come together, adding, “I don’t think anything else is going to happen this session.”

“It is not going to proceed without broad bipartisan support,” Dayton told reporters Thursday. “It is just not going to happen now. … We will come back next session, if I am still around.”

However, he added, Frank could take away Minnesota’s options before next year.

Daudt said Democrats may not have come up with a plan, but he thinks he knows their desire: “They seem set on letting these people out.”

Frank issued his latest order five days before the Legislature convened last month.

“If the evidence requires it, the court will act,” Frank wrote. “But it is the Minnesota Legislature that is best equipped to develop policies and pass laws — within the limits of the Constitution — that both protect public safety and preserve the rights of the class.”

How to deal with sex offenders has been a major state Capitol issue since University of North Dakota student Dru Sjodin was kidnapped from a Grand Forks, N.D., mall on Nov. 22, 2003. The next April, her body was found near Crookston, Minn. A sex offender who had served his prison time was convicted of her kidnapping and murder.

The crime set Minnesota politicians on a quest to find ways to keep sex offenders behind bars longer. One of the ways was to make more use of an existing program that allows county prosecutors to ask judges to put offenders into the treatment program.

The program is housed at state hospitals in Moose Lake and St. Peter.

House passes $500 million tax cut; Dayton wants more cuts, Senate less

Lenczewski, Murphy

By Don Davis

The Minnesota House passed a $500 million tax cut Thursday and the governor announced he wants to trim taxes $616 million, but the Senate is headed for smaller cuts.

Democrats said the bill representatives passed 126-2 would provide tax relief to nearly 1 million Minnesotans, in a large part by matching most Minnesota tax law to federal law. That “federal conformity” means $301 million less Minnesotans would pay.

Federal conformity would lower taxes on married couples $115 on average because federal law taxes married couples less than Minnesota law. That would go to 650,000 couples, mostly those who earn less than $75,000 annually.

The bill also would provide an average tax cut of $300 to low-income Minnesotans who file for the working family credit.

The House voted to cancel taxes placed on businesses last year: warehouse storage, farm equipment repair, some business equipment repair and telecommunications equipment.

The bill also simplifies and cuts the estate tax and provides some tax credits to people who invest in new companies and high-technology businesses. Gov. Mark Dayton would like to add a few more tax cuts.

House Democrats and Democrat Dayton said their tax-cut plans especially help middle-class Minnesotans.

Money to fund the tax cuts comes from a $1.2 billion budget surplus state financial officials announced a week ago. Dayton on Thursday said he wants half of that surplus to be used as tax cuts, $162 million for what he calls additional “essential” spending and the rest going to enlarge the state budget reserve.

House Tax Chairwoman Ann Lenczewski, D-Bloomington, said her tax bill mostly deals with taxes being collected now, or soon will be. She and Dayton said that is why quick action is needed.

“This is the time-sensitive stuff we need to do right now,” she said.

Dayton said he will keep the pressure on senators for quick action.

House leaders said a second tax bill may include further tax cuts, including some property tax relief.

Not so fast, Sen. Rod Skoe, D-Clearbrook, said.

While it is important that the state match federal law, the Senate Taxes Committee chairman said, there is no need to rush.

“I would rather move a little slower to make sure we get things right,” Skoe said.

Skoe said the Senate could pass a tax-cut bill by the end of the month.

However, he does not agree with House leaders and the governor who want a second tax-cut bill. In fact, he added, the House $500 million bill cuts too much.

Skoe said he was especially happy with Dayton’s proposal to increase the state budget reserve $445 million, to more than $1 billion.

“We have had 10, 12 years going from one deficit to another,” Skoe said, and a bigger reserve is needed in case that happens again.

Skoe would not say what tax cuts he wants to see in the Senate bill.

House Republicans criticized Democrats for raising taxes $2.3 billion last year, and coming back this year with a $500 million tax cut. They said that still is a $1.8 billion net tax increase.

Rep. Kurt Zellers of Maple Grove, a GOP governor candidate, said a gift tax enacted last year hurt farmers who wanted to hand farms down to their children. He said that lack of consistency is hard on Minnesotans.

Even though they complained about Democratic taxes, Republicans liked the cut.

“The best thing we can do with this surplus is to put it back in the pockets of those who need it most,” House Minority Leader Kurt Daudt, R-Crown, said.

House Majority Leader Erin Murphy, D-St. Paul, said last year’s tax increases, mostly on rich Minnesotans, allowed the state to increase education funding and provide more aid to local governments. The changes improved the state economy, Democrats said.

“Today, we have the opportunity to take another step forward,” Murphy said.

The only two who voted against the bill were Democratic Reps. Jason Metsa of Virginia and Ryan Winkler of Golden Valley.

Metsa said he voted against the bill because he would rather see money spent for property tax relief, nursing homes and state aid to local governments. For Winkler, the vote was because “the tax cuts were too large and not the right priorities for Minnesota this year.”

Analysis: Election-year politics never will be far from Minnesota legislators

House last year

By Don Davis

Politics and legislating always are intertwined, but they could be even more so in the Minnesota Legislature this year.

Minnesota’s 201 state lawmakers return to St. Paul today for a shorter-than-normal 2014 legislative session (they must be done by May 19), with a relatively short must-do issues list.

Democratic House leaders, facing re-election this year, appear happy to meet for less than three months as they try to sidestep controversial issues that could hurt them at the polls. Republicans, never for long sessions, can use their minority status with little say in what happens in the Capitol to take issue with most Democratic initiatives.

Among Democrats, there is a sense of unease in the Capitol as the House and governor’s office are up for election this year (senators are safe from the ballot box for a couple more years). In the 2010 election, Republicans took both chambers of the Legislature (the Senate was GOP for the first time in 38 years) and then two years ago Democrats snatched them back.

As Democrats try to keep their hold on the House, Senate and governor’s office, all signs are that their leaders will try to avoid more tax increases this year at all costs, after a $2 billion hike a year ago. Republicans are trying to make hay with that increase, and by emphasizing that in 2013 Democrats also began the troubled MNsure health insurance marketplace.

Competition for rural and suburban House seats will be fierce since voters in many of those districts could opt for either party. So laying out a middle-of-the-road sales campaign could help Democrats.

In his sales effort aimed at some of those rural Minnesota districts, Democratic House Speaker Paul Thissen of Minneapolis sought a Forum News Service interview about his set of rural initiatives for the session.

Sure, it makes sense to ask a reporter who writes for newspapers that cover much of rural Minnesota in to talk. But it is not common: In at least 15 years, no speaker has delivered a similar invitation to discuss a session’s rural issues. And certainly no Minneapolis lawmaker has done that.

“I think we have a pretty good story to tell,” Thissen began, starting with what he sees as last year’s rural-issues progress.

With the House up for election, it appears to be up to Thissen to temper expectations from liberal DFL activists, many of whom want more taxes and more spending in a variety of areas. More taxes and spending could alienate voters who tend to be moderates.

The House and Senate transportation finance chairmen recently proposed two new taxes: a motor fuel sales tax and another one on crude oil transported through Minnesota. Thissen tried to squelch talk of either tax, at least for this year.

Thissen said he does not support taking up controversial issues such as copper-nickel and sand mining this session. And he said he wants more information before signing off on constructing a $63 million Senate office building, another controversial item.

House Democrats and Democratic Gov. Mark Dayton like the idea of repealing some controversial taxes they approved last year, including one on farm implement repair and another on warehouse storage.

House Minority Leader Kurt Daudt, R-Crown, agreed with Democrats that the state economy is improving, but disputed DFL claims that their policies are responsible.

“It wasn’t raising taxes that got us out of this situation,” Daudt said of economic woes.

Republicans say their policies in 2011 and 2012 helped businesses and, thus, the economy. Talk like that and attacking MNsure health make it clear the GOP will continue to run on issues that put the party in power four years ago: lower taxes and smaller government.

Many Republicans say Democrats are running away from what they did when in power last year, predicting they will try to downplay tax and spending increases. Sen. David Osmek, R-Mound, said that the opposite could happen. If Democrats begin to think they may lose House control, he said, they could begin passing all of their priority bills, regardless of the needs and consequences.

Session to be short but full

Legislative leaders

By Don Davis

Expect a minimum wage increase, but no tax increase, when Minnesota legislators return to St. Paul for the year at noon Tuesday.

Expect widespread agreement on borrowing $840 million for public works projects, but not so much agreement on where to spend that money.

Expect movement toward increased long-term care funding, but not a requirement to pay bottle and can deposits.

Most importantly, expect Minnesota’s 201 legislators to pack everything they can into a sort legislative session that may not feature as many headline-grabbing bills and long, dramatic debates as in recent years.

Each lawmaker has bills he or she wants to pass. More than 1,800 bills remain available to debate from last year, and House members have introduced nearly 300 more before the session even begins.

They will not have much time.

The state constitution requires that the session beginning Tuesday (sessions often begin in January) end no later than May 19, and legislative leaders say they will take a 10-day Easter-Passover break in April.

In an interview, Gov. Mark Dayton said there could be problems “if they try to do everything.”

When Minnesota became a state, legislators met every other year. When they began meeting annually, the second year was to handle any leftover business and fund public works projects.

“Now it has become a complete session unto itself,” Dayton said. “It does concern me.”

A proposal to increase the minimum wage has received the most hype in the run-up to this year’s session. Democrats generally agree it needs to go up, and they control the Legislature and governor’s office, but they differ on details.

Rural Republicans are especially concerned that a $9.50-an-hour minimum wage is a dangerous reach.

“For rural Minnesota, $9.50 is way too high,” said Sen. Paul Gazelka, R-Nisswa.

Gazelka said he fears rural jobs would be lost if the wage were raised that much.

Senate Majority Leader Tom Bakk, D-Cook, has similar concerns, especially for nursing homes. At a Forum News Service-sponsored forum, he said he supports a higher wage, but insists on raising nursing home workers’ wages first.

“I’m going to push a green button for a minimum wage bill …” Bakk said. “What I don’t want is to find out that the nursing home in the city of Ely is going to close.”

Supporters say thousands would see a pay increase.

The state’s current minimum wage is $6.15 and the federal wage, which because it is higher governs most employers, is $7.25.

“I hope we can move it out in the first couple weeks of the session,” said House Speaker Paul Thissen, D-Minneapolis.

An issue not likely to move fast is the bonding bill that funds public works projects with money borrowed by the state selling bonds.

GOP and DFL legislative leaders agreed at the pre-session forum that $840 million is a good figure for bonding.

But they have two disagreements, even as they agree on spending $126 million to finish funding Capitol building renovation.

First is what projects should be funded. Republicans tend to shy away from city civic centers, while Democrats like to fund them. House Minority Leader Kurt Daudt, R-Crown, said bonding should focus on things like fixing buildings and transportation needs, not building new facilities.

The second disagreement arose at the forum when Bakk and Thissen suggested that some of the state’s expected surplus could fund projects above what is spent in the bonding bill. They suggested projects such as transportation improvements and the Capitol renovation, while GOP leaders wanted to limit public works spending to $840 million.

Legislative leaders agreed that many decisions, such as bonding, depend on what they learn Friday when state officials release what economists expect the state’s revenue picture to look like in the next few months.

Thissen appears to be taking tax increases off the table, including a tax legislative transportation finance chairmen want to add to motor vehicle fuel sales. Dayton also said he does not support a fuel tax increase.

Dayton, Thissen and Republicans support ending a tax on farm equipment repair that passed last year. The governor and Republicans also want to eliminate other taxes, including those on warehouse storage and on telecommunications equipment.

The governor said he wants to cut some middle-class taxes while only raising spending a little. He will release a plan for budget changes after he knows more about projected revenues.

Thissen rejects the transportation chairmen’s proposal to tax crude oil transported through Minnesota to raise funds for emergency personnel to be trained to fight oil fires. The speaker said surplus money could be used for that. Dayton also favors surplus money, if available, for oil disaster preparedness.

The news service forum produced bipartisan agreement among leaders about the need to increase funding for long-term care. However, like many other spending issues, supporters of that will have to wait until after Friday’s revenue report to see their chances.

“It is a priority,” said Senate Minority Leader David Hann of Eden Prairie.

Other areas that may or may not be issues this year:

– Thissen said there will be no vote, this year or maybe ever, on a proposal to require deposits on bottles and cans.

– The House rules committee in the next few days will discuss whether to allow a $63 million Senate office building to be constructed. Also part of the project is $27 million for parking, to be funded by charges for using the facilities. “There hasn’t been a full public hearing on this,” Hann said.

– No action is expected on frac sand mining, which has become a big issue in southeastern Minnesota, where several local governments are trying to slow the growth of the mines due to environmental concerns.

– Allowing Sunday alcohol sales will be a tough sell, Thissen said, since a bill to do that received only 20 House votes last year.

– Democrats, who control the House and Senate, do not expect any action on MNsure, the troubled health insurance exchange. Republicans, meanwhile, would like to change its administrative structure or get rid of MNsure.


Key Minnesota Legislature dates

Tuesday: Annual session begins at noon.

Feb. 28: State revenue forecast released, informing lawmakers how much money they have available to spend.

March 21: First committee deadline: The last day committees in the chamber where policy bills originate can approve them.

March 28: Second committee deadline: The last day committees can act on policy bills that met the other chamber’s deadline.

April 4: Third committee deadline: The final day to act on major spending bills.

April 11-21: Easter-Passover break.

May 19: The final day the state Constitution allows the Legislature to meet in regular session.

Note: Tax-related bills have no deadlines. Also, even if a bill misses a deadline, rules committees in the two chambers may allow it to advance. Bills that failed in committee still may be attached to other bills in the form of amendments.


The 2014 Minnesota Legislature gathers Tuesday in a short session that should feature financing public works projects, but it take up of a lot of issues.
Bonding: Gov. Mark Dayton proposes spending about $1 billion on new construction and repair work, money most obtained by the state selling bonds. State and local projects ranging from park improvements to new community centers will be considered, and much of the money likely will go to state-run colleges and universities to keep facilities up to date. Democratic legislative leaders lean toward selling about $840 million in bonds and paying for other projects in cash if it is available.
Budget: Minnesota lawmakers and Gov. Mark Dayton last year approved a $38 billion, two-year budget. Other than some tweaks, little new spending is expected to be approved this year.
Bullying: Efforts are underway to strengthen the state’s anti-bullying law.
Constitutional amendments: Not many proposals to change the state Constitution have gained traction this year. But Senate Majority Leader Tom Bakk, D-Cook, plans to push one that would require a super majority of legislators to approve putting an amendment in front of voters. Now, a simple majority is needed. Another proposed amendment would trim the number of judges on Minnesotans’ ballots, but Bakk gives it less of a chance to pass this year.
Construction zones: Bills have been introduced to outlaw mobile telephone use and increase speeding fines in highway construction zones.
Elections: Secretary of State Mark Ritchie established an online voter registration process last year, but many legislators say he does not have that authority. So legislative election leaders say they plan to pass a bill approving online registration, which at this point appears to have little opposition.
Gay marriage: Opponents of same-sex marriage plan to offer a bill that would make it clear businesses owned by people who oppose such marriages are not required to service gay weddings.
Gender equality: Ways to improve women’s pay and other aspects of their lives will be discussed. The fact that they earn less than men in the same jobs is a prime topic.
Homelessness: A statewide homeless coalition wants the Legislature to approve $100 million to build affordable housing. That is twice the amount the governor recommends.
Legislative offices: Republicans and many House members say a proposed $63 million Senate office building is too pricey and the issue will come up for debate.
Medical marijuana: Allowing some Minnesota patients to use marijuana to relieve extreme pain has been discussed in the session’s run-up, and likely will be a topic of hearings. Just before the session is to begin, there are signals that a compromise is possible between medical marijuana supporters and law enforcement groups that have opposed it.
Mining: House Speaker Paul Thissen promises that no mining-related legislation will pass this year. The main bill being discussed had been one requiring high financial contributions by owners of proposed copper-nickel mines to ensure that any environmental damage caused by mines would be fixed after they close. Legislative leaders said they also do not expect any frac sand mining bill to receive a vote.
Minimum wage: Unions have led the charge in campaigning for a higher minimum wage. While proponents want it upped to $9.50 an hour, from the current $6.15, Senate Majority Leader Tom Bakk’s concern that such a wage will hurt nursing homes looking to hire people could keep the wage lower. If Congress does not act to raise the wage and the state does, the higher Minnesota number would govern most wages in the state.
Payday loans: Religious and other groups want a clamp-down on payday lenders that they say charge high interest rates and take advantage of poor Minnesotans.
Politics: State House and governor elections this year will influence what happens. After raising taxes more than $2 billion last year, Democrats who control the House, Senate and governor’s office fear voters could retaliate against them if they raise taxes any more. Republicans likely will talk about the tax increases often, as well as problems faced by MNsure, the state’s troubled online health insurance marketplace. Electoral politics never will be far from the surface as the governor and all House districts are up for election.
Propane: Recent shortages and high prices of propane are likely to drive efforts to increase storage in Minnesota so the fuel may be bought in the summer when it is cheaper and stored in the state for use during fall grain drying and winter heating seasons.
Public notice: Legislation is expected to be considered to relax a requirement for local governments to print legal notices in newspapers, and counties could post it on their websites only. Local governments say that would save money, but newspaper industry leaders say fewer citizens would see information about government.
Sex offenders: A federal judge says the Legislature must change the state’s sex offender program. If not, he could take control of it. He has ruled that the state should not continue its practice of committing sex offenders to indefinite treatment in state hospitalS after they complete their criminal sentences.
Synthetic drugs: Lawmakers probably will pass bills making synthetic drugs, items such as bath salts, more difficult to buy and to educate Minnesotans about their dangers.
Taxes: Tax and spending work occurred last year, but some tax adjustments could come in 2014. Most legislators appear to favor eliminating a tax on farm implement repairs. Many also have discussed getting rid of other taxes lawmakers passed last year, such as a tax on storing goods in a warehouse someone else owns and one on technology equipment.
Transportation funding: A broad coalition of Minnesota organizations proposes, with key legislators’ backing, to raise taxes on motor vehicle fuel as a way to better fund road and transit projects. But House Speaker Paul Thissen, D-Minneapolis, said the new taxes will not pass this year.
Transportation safety: Transportation accidents and spills of crude oil, mostly from western North Dakota, prompted House and Senate transportation finance committee chairmen to propose a fee on oil transportation to fund improved training and equipment for emergency personnel. The House speaker says no new taxes are needed, but the state could find ways to help local officials deal with the issue.

Dayton works at home after surgery

By Don Davis

Hip surgery will crimp Minnesota Gov. Mark Dayton’s style as the Minnesota Legislature convenes for the year Tuesday.

In his first three years in office, Dayton frequently met with rank-and-file legislators from both parties about a great many issues. But since his Feb. 10 hip surgery, and his Valentine’s Day release from Mayo Clinic in Rochester, Minn., Dayton has been in a brace and confined to the official governor’s residence in a swanky St. Paul neighborhood. And he likely will remain there for a while.

“I expect I will be involved and as time goes on I will be involved more,” the 67-year-old governor said during a Forum News Service telephone interview.

“I wish I could be at the Capitol,” he said, adding that he hopes people understand he cannot do that due to surgery.

Only his mobility is affected, not his thinking, Dayton said.

“Fortunately, none of my brain cells reside in my hip,” he said.

Dayton predicted he will talk to legislators via telephone rather than in person early this legislative session.

The early part of the session may be busier than usual. With a short session this year, after starting later than usual, legislators face a March 21 deadline to pass many of their bills. Committee schedules in the first few weeks of session are full and some committees already plan night meetings, something usually reserved for later in the session.

Dayton said he has a Monday meeting planned with House Speaker Paul Thissen, D-Minneapolis, and Senate Majority Leader Tom Bakk, D-Cook.

One of his priorities may take a hit because he cannot lobby lawmakers in person: his concept of an “unsession.”

Dayton long has said he wants the Legislature to undo things this year that are not needed, like repealing obsolete laws. But at a Forum News Service-sponsored forum with legislative leaders fellow Democrats did not appear to have the unsession enthusiasm that Dayton shows. It was not on a DFL session priority list.

“I don’t remember that the unsession was my initiative,” Bakk said when asked about it.

Bakk said that the governor’s unsession proposal poses a political danger. A bill that overturns an outdated gun law, for instance, could end up being amended with a controversial provision that would force long, complex political debates with no public input on bills that were supposed to be routine.

The Senate leader said he told Dayton in November that he needed to “be ready to go” with unsession proposals since lawmakers do not plan to stick around long. In the interview, Dayton said he would unveil his plans in early March.

While Republicans have not rejected the unsession concept, House Minority Leader Kurt Daudt, R-Crown, echoed what many in the GOP say is their idea: “Go back and fix the mistakes of the last session.” In Republican eyes, that include eliminating some tax increases approved in 2013, as well as killing the state’s MNsure health insurance marketplace, besieged by problems since its October launch. Democrats, however, support MNsure and say such talk politicizes the unsession concept.

Thissen said that he supports efforts to repeal 40 of 160o state boards that do not function or are inactive.

“I hope that the bipartisan support for it isn’t taking your pet policy project and putting it in an unsession bucket,” Thissen said.

State to consider oil disaster aid

Leaders meet the media

By Danielle Killey

Local emergency responders say they want the state’s help handling safety concerns as crude oil travels on railroads, highways and pipelines through their communities, but the Legislature has little time to act on the issue this year and many questions to answer.

The Minnesota Legislature’s 2014 session begins Tuesday, and committees must initially pass bills less than a month after they convene. On Wednesday, legislative leaders could not give any specifics about what the state can do to help.

Senate Majority Leader Tom Bakk, DFL-Cook, said lawmakers need more information about local entities’ response capabilities and necessities before determining the next steps.

“We need to inventory what’s out there,” he said during a 90-minute Forum News Service-sponsored meeting in which legislative leaders briefed reporters from around the state about issues expected to arise during the session.

Goodhue County Sheriff Scott McNurlin said local agencies are doing that research as well and are in the initial stages of looking into what kind of specialized plans and equipment would be needed in an emergency situation, such as a December train derailment and fire in Casselton, N.D.

“It’s just one of those new challenges that, quite honestly, a year or two ago we didn’t face,” the sheriff said.

The state has a limited capacity for managing rail safety, lawmakers said.

“A lot of the regulation of the railroads, in particular, are at the federal level,” House Speaker Paul Thissen, D-Minneapolis, said. “But it still seems to me that a place the state can step in is making sure we are prepared to respond adequately if an unfortunate event … were to happen.”

“We need to make sure that our emergency responders are ready to respond,” House Minority Leader Kurt Daudt, R-Crown, said.

The issue was one of many discussed in the Forum News Service briefing. Gov. Mark Dayton did not attend because of hip surgery last week. He turned down an invitation to call in to the briefing.

Democratic leaders said they think lawmakers will vote to increase the minimum wage this session.

Leaders also discussed plans for a public works borrowing bill, citing infrastructure as a key need, as well as the possibility of repealing business-to-business taxes passed last year.

A proposal from Rep. Frank Hornstein, D-Minneapolis, and Sen. Scott Dibble, D-Minneapolis, presented last week would establish a 0.01 cent per gallon tax on all crude oil transported in Minnesota to help fund improved safety. The money would be used to help local agencies fund equipment and training to respond to situations such as oil spills.

“There’s going to have to be some kind of funding stream” to help cover planning, training and any needed specialized equipment, McNurlin said, but the question remains whether that should come from the oil, rail and pipeline companies; or state, federal government and local governments.

“These are all questions that need to be answered,” he said. “This is all relatively new to us.”

Legislative leaders weren’t sold on the tax, though some said funds for state support could come from other places, such as a budget surplus.

Rail cars have been transporting hazardous materials for years, but concerns have increased after recent incidents, including the North Dakota derailment and a Canadian Pacific train leaking a trail of about 12,000 gallons of crude oil earlier this month between Red Wing and Winona.

“The public safety folks in a small community or a large community aren’t necessarily equipped to address that,” Thissen said.

McNurlin said local leaders want the state to help them navigate the situation and deal with federal regulations.

“It’s going to take several layers of bureaucracy and government getting on the same page,” he said.

MNsure executive resigns


By Don Davis

A Costa Rican vacation gave MNsure’s executive director a permanent break from her job.

April Todd-Malmlov handed her resignation to the MNsure board Tuesday night after publicity about the trip she and another state official took before Thanksgiving. The trip came at a time when her agency was entering the final few weeks that Minnesotans could buy health insurance so it is effective Jan. 1.

The vacation was just one of several problems Todd-Malmlov faced in recent weeks. MNsure computer problems since the program launched Oct. 1 have drawn regular headlines as Minnesotans reported that they could not buy insurance.

The board named Scott Leitz, assistant commissioner of the Department of Human Services, to be MNsure’s interim chief executive officer.

A nationwide search is planned for a permanent MNsure leader.

“MNsure must do better,” Leitz said in a statement. “If there are problems or mistakes, we will acknowledge them and fix them.”

MNsure board Chairman Brian Beutner said a chief executive officer was needed to better run the agency.

“Leitz will oversee operational improvements to ensure the exchange works for Minnesotans and address the organization’s long-range planning needs,” a MNsure news release said.

Leitz, who has 16 years’ experience in state and private health care positions, said his first priority will be to make it easier for Minnesotans to obtain health insurance through MNsure by Jan. 1.

MNsure critics said they have warned about multiple MNsure problems.

“With less than a week before the critical enrollment deadline for Minnesota families, zero insurance policy cards have been issued and the MNsure help line is anything but helpful,” House Minority Leader Kurt Daudt, R-Crown, said Tuesday night. “Tonight’s news offers no comfort to hardworking Minnesotans who are still unsure if they’ll have insurance coverage on Jan. 1″

Democratic Gov. Mark Dayton said MNsure’s change in leadership is good news, calling the board’s move “strong action.”

“As I have said before – and have made emphatically clear to the MNsure board – now is a critical time for Minnesotans, who are relying on this exchange to purchase good quality, yet affordable, health insurance,” Dayton said. “The recent problems some have experienced with MNsure are completely unacceptable. I am hopeful that this new leadership will lead to their swift resolution.”

The MNsure board is scheduled to meet this afternoon, but hastily scheduled the Tuesday night meeting to deal with Todd-Malmlov. It was held behind closed doors.

Most damaging to Todd-Malmlov, 36, may have been a conservative blog’s revelation that she and a top Minnesota Medical Assistance (Medicaid) official took a two-week Costa Rica vacation together.

The Medicaid official, Jim Golden, works with a program connected to MNsure. Golden and Todd-Malmlov live together in St. Paul.

MNsure and Department of Human Services officials say there is no problem with the relationship, but critics say it was a bad choice for them to vacation during a busy time for MNsure.

It has been a rough few months for MNsure and Todd-Malmlov.

Dayton and the Democratic-controlled Legislature approved MNsure this year to meet a requirement in the federal health law known as Obamacare. Supporters said it would be better to sell insurance on a state-run site than letting the federal government run the online health insurance sales program.

MNsure sells insurance online, and with the help of people who provide assistance. Customers have a choice of insurance companies and plans that provide different services and prices.

All policies for sale online are provided by private companies; the state does not provide insurance.

MNsure gives Minnesotans a way to buy private insurance and is the only way for those who use state and federally funded medical care to obtain insurance coverage under Medical Assistance and MinnesotaCae programs.

Setting up the so-called health care exchange in a short time was a massive task for computer experts, MNsure officials said.

One of the issues that received publicity was when an employee accidentally emailed private insurance broker information. The legislative auditor said the state did not even need to collect some of that information.

Since MNsure went live Oct. 1, technical and other glitches have been common.

Minnesotans found it difficult much of that time to buy insurance online. And with a deadline of next Monday for people who want new policies by Jan. 1, the website would not accept new information Monday and part of Tuesday.

While people cannot buy insurance by telephone, more than 90 operators have been hired to answer questions and direct callers to people who can help consumers buy insurance. However, phone waits of up to an hour were reported, and in the last couple of days it came to light that the phones actually hung up after an hour if MNsure did not answer.

Todd-Malmlov was hired to run MNsure after 15 years of experience in the public and private health care sectors. She served as Minnesota’s state health economist and was responsible for monitoring the health care market and informing state health policy related to health care access, cost and quality.

She also has worked at UnitedHealthcare.

Web woes near deadline are latest MNsure problems

MNsure’s Website

By Don Davis

Minnesotans who want new health insurance on Jan. 1 have a week to buy policies through the state-run MNsure program, but problems continue to surface as that deadline nears.

On Monday and this morning, for instance, people wanting to sign up on the MNsure website were greeted with: “We are currently experiencing issues with new applications requesting 1/1/14 plan coverage. We are working to resolve this issue.”

MNsure spokeswoman Jenni Bowring-McDonough said she did not know the problem’s cause.

She said that anyone who signs up and pays for insurance by Dec. 23 will have coverage Jan. 1.

The web issue is one of a number of problems that plague MNsure, issues ranging from nearly hour-long waits to getting anyone to answer the MNsure telephone to its director taking a two-week Costa Rica vacation last month during what Gov. Mark Dayton called a critical time for the insurance-sales agency.

“It’s up to the governor now,” House Minority Leader Kurt Daudt, R-Crown, said as he and Senate Minority Leader David Hann, R-Eden Prairie, urged Democrat Dayton to fix the problems.

MNsure is a separate agency and the governor has no direct control over it, but Daudt and Hann said Dayton is the one who must take action.

Fellow Republican Scott Hounor, a governor candidate, said there is nothing Dayton can do. Honour was especially upset about the executive director’s Costa Rica trip last month.

“Normally, I’d call on the governor to replace the director, but the Obamacare exchange law he helped create and signed puts MNSure beyond oversight of the governor or the Legislature,” Honour said. “Gov. Dayton’s MNSure doesn’t answer to anyone.”

Dayton Press Secretary Matt Swenson said that his boss “has been very clear that the current state of the exchange is unacceptable.”

MNsure’s website has had issues from the beginning as many Minnesotans could not sign up for new policies. Some of the woes were blamed on problems with a federal computer system, which MNsure must use to determine whether applicants qualify for price breaks.

With so many problems, the exchange has nearly doubled the number of people answering questions via telephone, (855) 366-7873. More than 90 people are on MNsure phone duty.

The wait time for people calling Monday afternoon was 45 minutes, down from nearly an hour at times last week.

The website itself always is open for “window shopping,” Bowring-McDonough said, and people now have an extended time of 6 a.m. to midnight seven days a week to create accounts and buy insurance.

Bowring-McDonough said that MNsure advices customers to pay for insurance via credit card on the MNsure website for the quickest service.

On Sunday, KSTP-TV in the Twin Cities reported that MNsure Executive Director April Todd-Malmlov vacationed in Costa Rica with Jim Golden, who leads the Minnesota Medical Assistance program. They work for different agencies, but policies available on MNsure cover Minnesotans receiving MA benefits.

MNsure and the Department of Human Services, where Golden works, said there was no conflict of interest in their relationship. The Star Tribune reports that they live together in St. Paul.

MNsure officials indicated that Todd-Malmlov’s vacation was fine with them. A MNsure statement said: “Members of the MNsure Board were aware of her absence. She was available via phone and email and communicated with staff on a daily basis, providing leadership and direction as needed.”

One in five Minnesotans eventually will buy insurance from private companies through MNsure. Some are those who now buy private insurance; others are on Medical Assistance (Minnesota’s version of Medicaid) and MinnesotaCare (state-subsidized insurance).

Dayton and Minnesota legislators created MNsure earlier this year in response to the federal Affordable Care Act, which requires a web-based insurance policy purchasing option. While 36 states opted to let the federal government establish their online sales presence, Minnesota MNsure supporters said they preferred an insurance marketplace that could better serve their state’s residents.

Most Minnesotans will not use MNsure because nearly all companies that now provide employees with insurance are expected to continue to do so.


MNsure numbers (through end of November):

– 50,000 accounts created

– 32,000 health insurance policy applications finished

– 14,405 signed up for federally funded Medical Assistance

– 10,200 signed up for state-subsidized MinnesotaCare

– 50 was median age for those buying commercial insurance

Special session decision: school payments vs. farmer tax

GOP leaders Hann, Daudt

By Don Davis

Republicans who essentially set the agenda for a special legislative session said Wednesday that it was more important to repay schools than to overturn a new tax affecting farmers.

So a Sept. 9 Minnesota Legislature special session will only deal with funding disaster recovery, leaving intact a tax that began July 1 on farm implement repairs.

The session’s goal is to pass an estimated $4.7 million in aid for 18 counties scattered around the state affected by June 20-26 storms and floods and another $1 million for Nobles and Rock counties in southwestern Minnesota that need more money after a massive April ice storm.

Democratic Gov. Mark Dayton insisted that the four top legislative leaders, Democratic and Republican, sign off on the agenda for the special session. All agreed about the disaster aid, but Republicans wanted to overturn several taxes the Democratic-controlled Legislature passed in May.

Dayton said he would consider the broader tax action only if Republicans gave him specific places they would get money to replace revenue lost if taxes were eliminated. Republicans, meanwhile, said they were ready to do that, but they decided Democrats were not serious about getting rid of the taxes.

Because GOP leaders would not sign off on the farm tax repeal, the decision to limit the session to disaster aid came down to them.

House Minority Leader Kurt Daudt, R-Crown, said the final decision was between giving farmers a $2 million-plus tax break a month and putting that money toward repaying schools funds the state borrowed from them.

“There really isn’t enough money to pay for both,” he said.

Dayton had said he wanted the farm tax elimination to be retroactive, so taxes paid so far would be refunded.

On Wednesday, the governor said he did not know if he could seek refunds if the tax is repealed when legislators return to regular session Feb. 25. In fact, he said he needs to check future revenue forecasts before deciding if he can support overturning any of the taxes enacted this year.

The special session is to begin at 10 a.m. Sept. 9 and wrap up by the end of that legislative day, which law defines as 7 a.m. Sept. 10. Legislative leaders said hearings on the disaster relief bill will come in the days before the session.

New on Wednesday was the decision to include $1 million for the southwestern Minnesota ice storm.

The storm was April 9-11 and layered the Cottonwood, Jackson, Murray, Nobles and Rock counties with ice. That, coupled with a subsequent snowstorm, left much of the area without power for days, and in some cases, a week. Up to 50 percent of trees in Worthington alone were affected, with many being cut down.

Lawmakers already put $1.75 million of state money into ice storm recovery efforts. Federal dollars are covering most of the damage, estimated at more than $26 million.

The main work of the special session is to fund the state’s portion of recovery from the June storms in Benton, Big Stone, Douglas, Faribault, Fillmore, Freeborn, Grant, Hennepin, Houston, McLeod, Morrison, Pope, Sibley, Stearns, Stevens, Swift, Traverse and Wilkin counties. Preliminary surveys show nearly $18 million in damage to public infrastructure.

The federal funds are limited to state and local governments, not for home or business damage.

When legislative leaders announced the special session deal Wednesday, they refused to say why the farm tax repeal fell of the table. But it did not take long for that to change as the two sides blamed the other.

Senate Majority Leader Tom Bakk, DFL-Cook, said Republicans would not sign an agreement setting up a special session with just one tax overturned.

House Speaker Paul Thissen, DFL-Minneapolis, first suggested that the farmer tax, which began July 1, be repealed during the special session. Bakk and Dayton soon agreed.

Republican leaders also said the tax should be repealed, but wanted a variety of other new taxes also killed.

Prime among the GOP targets was a tax due to begin in April on goods stored in warehouses. Republican and business leaders said the tax, even though it has not begun, was forcing some firms to delay business decisions.

Reporter Aaron Hagen contributed to this story.

Dayton shares draft special session agreement

By Don Davis

Gov. Mark Dayton has given key lawmakers a proposed agreement to lead to a special Minnesota legislative session to fund disaster recovery and eliminate a farm implement repair tax.

The draft agreement Dayton released Tuesday night calls for the session to begin at 2 p.m. Sept. 9 and adjourn no later than 7 a.m. the next day. He requires the four legislative leaders, Democrats and Republicans, to sign it before he will call a special session.

The governor asked leaders to sign the agreement by Friday.

It is common for governors to require an ironclad deal to keep legislators from taking up other subjects.

The draft agreement comes a day after House Minority Leader Kurt Daudt, R-Crown, complained that he had not been consulted about the session, only told what the governor planned to do.

Eighteen Minnesota counties are eligible for federal disaster assistance after June 20-26 storms and floods. The special session is being called mostly to provide state funding to match federal money.

The state is expected to spend more than $4 million on the disaster.

After Dayton said he would only consider calling a session for disaster relief, he announced he also would allow lawmakers to vote to overturn a tax he and lawmakers enacted in May on farm implement repair. He said he would like the action to be retroactive, so farmers could receive refunds on taxes they paid since the law began July 1.

Revenue Commissioner Myron Frans said farmers are expected to pay $2 million a month with the new tax.

The agreement Dayton wants would not allow any amendments to either bill after he and legislative leaders agree to them.

Republicans, especially, want another tax repealed during the special session: one that would tax goods stored in warehouses. Minnesota Chamber of Commerce leaders want more taxes repealed, and Rep. Ryan Winkler, DFL-Golden Valley, wants the special session to increase the minimum wage.

Dayton said last week that he refuses to consider other items.

Late Tuesday, GOP leaders said they still want the warehousing tax vote, but did not specifically say they would refuse to cooperate without him agreeing.

Daudt said he asked the governor to meet in person with the four legislative leaders and Dayton agreed.

Notebook: GOP leader wants tax change done in open

By Don Davis

The Minnesota House Republican leader says he wants to make sure that overturning a tax on farm implement repair is done in the open, unlike when lawmakers and Gov. Mark Dayton approved the tax in May.

Rep. Kurt Daudt, R-Crown, said on Monday that during or before a special legislative session next month that tax committees should hold public hearings on the plan to take the tax off the books.

Daudt said the tax was slipped in without any House hearings last May.

“He didn’t know what was in the bill,” Daudt said about Dayton, who last week said the tax should not have been passed. “If it is a mistake, let’s fix it in the light of day.”

The governor said at Farmfest last week that he thought the farm implement repair tax should be reversed in the special session and money farmers already have paid should be returned.

Daudt said a tax on goods stored in warehouses also should be overturned in a special session tentatively planned for Sept. 9. The session is being called to appropriate money to help communities affected by June storms and floods.

Dayton agreed that the warehouse tax should be eliminated, but at Farmfest he said that tax change can wait until the Legislature returns to its regular session on Feb. 25. The tax does not begin until April.

Dayton says all four legislative leaders, both Democrat and Republican, must agree on a special session agenda before he will call one. But Daudt said that he has heard nothing from the governor.

“They haven’t reached out to me,” Daudt said.

Dayton spokesman Matt Swenson disputed that. He said Dayton’s office has been in regular contact with all four legislative leaders’ offices about the session for weeks.

Daudt, however, said the governor’s office has not sought input in the four emails they sent to the House Republican staff. A meeting of the governor’s staff and legislative leaders’ staff members is planned for this week.

“I feel like the four leaders and the governor should sit down and talk about it,” Daudt said.

Unions OK contract

The two largest unions serving state government workers voted to accept a contract giving them 3 percent annual pay raises.

American Federation of State, County and Municipal Employees and Minnesota Association of Professional Employees approved the contract, which also requires state workers to pay more for their health insurance.

MAPE announced the pact passed with more than 97 percent support that last through 2015. AFSCME did not report the vote

AFSCME represents 19,000 workers; MAPE has 13,000 members.

State revenue down

State individual and corporate income tax receipts were down in July, while sales taxes were up, as Minnesota officials Monday reported an overall decrease of $20.7 million from projections.

The forecast predicted $956 million in revenue, but just $936 million came into the state treasury.

Individual income taxes fell $13 million below expectations and corporate taxes were $12 million below. Other revenues were down nearly $18 million, but sales taxes were up more than $22 million.

State officials generally have reported more revenue than expected in recent months, but warned that there could be “wide swings” from month to month for a variety of reasons.

‘Repeal taxes’

The Minnesota Chamber of Commerce wants the Legislature to overturn all businesses taxes approved in May.

The action should come during a special legislative session tentatively set for Sept. 9 to appropriate money for communities affected by June storms and floods, the chamber said.

Gov. Mark Dayton told reporters last week at Farmfest that he supports overturning a law taxing farm implement repairs, which is costing farmers $2 million a month. He called for that action to come during the special session.

He also said he supports eliminating a law taxing goods stored in warehouses, but said that should come next year because the tax does not begin until April.

The chamber asked Dayton and legislative leaders to remove labor taxes for business equipment repair, warehousing and telecommunications equipment purchases.

“We are aware of situations where expansion plans are now on hold or where companies are considering relocating some of all of their operations to other states,” chamber President David Olson wrote to Dayton and lawmakers.

Money comes in

A conservative group received enough donations last week to remain alive.

Minnesota Majority told supporters if it did not raise $20,000 last week that it would have to close. On Monday, President Dan McGrath announced that goal was met.

“I’m overwhelmed by the outpouring of support from our grassroots members,” McGrath said. “Over the last several days, we have been receiving a steady stream of mostly small contributions, ranging from $5 to $25 each.”

Still, McGrath said, there are financial challenges ahead. “For now, we will continue to innovate and provide value to our members while we work on reconnecting with donors and activists.”

Minnesota Majority has been active in fighting the unionization of home childcare providers and exposing what it calls voter fraud.

MN notebook: Sides disagree on property tax future

By Don Davis

Minnesotans may receive lower property tax bills next year or local officials may keep those taxes the same.

It all depends on who you ask, and neither side knows for sure.

Republicans and Democrats continued their fight over taxes Tuesday as Democratic Gov. Mark Dayton announced property taxes are expected to fall 1.5 percent in 2014.

“This is reversing a decade-long trend,” Revenue Commissioner Myron Frans said.

But the projection that taxes will fall $121 million statewide next year is just a best guess, Frans admitted. Since local officials make almost all property tax decisions, the Dayton administration has little say.

Republican leaders Sen. David Hann of Eden Prairie and Rep. Kurt Daudt of Crown said they never have seen property taxes go down, even when the state sends local governments more state aid as happened this year.

“These are local decisions,” Hann said, so state officials have no way of knowing what will happen to property taxes now, months before local budgets are written.

Hann and Daudt also said that all Minnesota taxpayers will pay higher taxes under the Democratic budget, after they cut taxes when they controlled the Legislature.

Neither side could produce facts to back up the predictions.

Dayton brought up himself that his Revenue Department is not always right, citing last year’s projection that allowing electronic pulltabs and bingo in Minnesota bars would bring in plenty of revenue to fund a new Vikings stadium. He found out this year that the revenue was falling fall short of what is needed.

Hann and Daudt avoided commenting when asked about the fact that taxes actually increased when they approved tax cuts two years ago.

Dayton and Frans asked reporters into the governor’s office to tout a new report that they said shows an expected property tax decrease.

They credited Democratic initiatives such as increasing state aid paid to cities, counties and townships. The two said that property taxes have gone up 86 percent since 2002, and next year will be the first time they have decreased in more than 10 years.

Frans said that without the Democratic tax changes, property taxes would go up $180 million next year.

Dayton promised reporters that his staff would forward information about how accurate projections such as he released Tuesday have been over the years. Nothing arrived Tuesday, and a Revenue Department spokesman said such a comparison would take days.

It did not take days for Republicans to discredit the projection. Like Dayton, they compared Tuesday’s report to the stadium funding miscalculation.

“They are from the same source,” Hann said.

Daudt called the governor’s announcement a “gimmick.”

Financial status better

A key financial company has improved Minnesota’s financial ranking.

Moody’s Investors Service upped the status from a “negative” to “stable” outlook, Minnesota Management and Budget reported Tuesday.

“We have turned a corner,” Commissioner Jim Schowalter of Management and Budget said. “This action affirms that the state’s financial management is headed in the right direction.”

Schowalter pointed to a balanced budget and repaying schools money the state has borrowed from them as good signs.

Good state financial rankings can lower interest rates the state pays when it borrows money for construction projects. Those ratings have fallen in recent years.

Dayton leaving state

Gov. Mark Dayton flies out of Minnesota today “regarding a possible economic development opportunity for Minnesota.”

It is the second time in two weeks that he has flown out of state. Last week, he met with top officials of a company looking to expand in Minnesota.

At mid-day Tuesday, Dayton refused to tell reporters specifics about last week’s trip, saying making it public would endanger negotiations. He did not mention that he planned another trip today, but a few hours later his schedule listed the trip.

It was not known if he was revisiting the same company or on a new mission.

Dayton plans to return to the Twin Cities in time to speak late tonight at a Minneapolis gay marriage ceremony.

Commissioner Katie Clark Sieben of the Department of Employment and Economic and a staff member will accompany Dayton today.

Dayton said notes on his daily schedule, without listing specifics, fulfill his promise to tell the public about out-of-state trips.

The governor said that earlier this year he made a trip not listed on his public schedule to Hudson, Wis., to lure Valley Cartage to move its headquarters to Lake Elmo, Minn.

Minnesota offered a $940,000 package of incentives, including tax breaks, to the company. Valley accepted the Minnesota offer.

Dayton said the state has made no incentive offers to the business he visited last week.