Tag Archives: paul marquart

Divide remains between rural Republicans, House leaders

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Murphy, Marquart

By Danielle Killey

House Majority Leader Erin Murphy and Rep. Paul Marquart stood side-by-side Tuesday introducing House Democrats’ education funding plan.

Murphy, DFL-St. Paul, praised Marquart’s work as education finance chairman: “He has done such a fantastic job.”

Indeed, politics can make unexpected allies.

Marquart, DFL-Dilworth, had challenged Murphy to lead the House Democratic-Farmer-Labor caucus after last November’s elections. Rep. Paul Thissen of Minneapolis was elected House speaker, and Marquart said he wanted to make sure rural Minnesota was represented in leadership.

Marquart lost the leadership contest, but said he was pleased to land the job as education finance chairman. His committee decides the budget for the state’s largest spending area.

Marquart said he was relieved when he saw many other rural members named to committee leadership spots as well, allaying some concerns about a lack of input from greater Minnesota that many members outside the Twin Cities metropolitan area raised as the legislative session began.

“I thought, ‘here’s where the balance is,’” Marquart said.

Some rural lawmakers still are not convinced.

“I think we’re left behind, definitely,” Rep. Debra Kiel, R-Crookston, said of rural Minnesotans under Democratic budget plans.

She said the proposals do not address real needs outside the Twin Cities area and could hurt small businesses and farmers.

“I think they need to re-examine their priorities,” Rep. Rod Hamilton, R-Mountain Lake, said of Democrats. “I definitely have concerns.”

Many rural Republican lawmakers cited recent approval of the environment and agriculture finance bill, which included water usage fee increases, an example of plans they say will disproportionately impact greater Minnesota.

Before the legislative session began, Republican lawmakers said agriculture funding would be overshadowed by other issues when it was joined with environment and natural resources for finance talks, and they were not happy with the result.

The bill passed without any Republican votes.

“I think this is one of the first times we have had a lack of bipartisan support there,” Rep. Paul Anderson, R-Starbuck, said. “I just don’t think this is a common-sense approach to how things work in rural Minnesota.”

Murphy said Democrats intentionally aimed for significant rural committee leadership overall to ensure those voices would be heard and said the budget plan reflects that.

“I think Minnesota as a whole will experience the benefits,” Murphy said. “We pay a lot of attention to different areas of the state.”

“We said we’re not going to play games with the budget anymore,” Marquart said. “That leads to balancing it on the backs of rural Minnesota often.”

Marquart said those Republicans concerned about rural Minnesota should look at the difference from the past two years, when the GOP controlled the Legislature.

“Rural Minnesota took a hit,” Marquart said. “We reversed some of those things.”

“I think the overall budget is excellent for rural Minnesota,” he added, citing his education finance bill, property tax relief and a 3 percent increase in funding for nursing homes. “I would say, look at the results.”

Thissen said a possible public works borrowing bill also would include funding toward important projects in rural Minnesota.

Kiel acknowledged some rural cities might see more state funds from changes to Local Government Aid and property tax relief plans. But she said proposed alcohol and cigarette taxes, the water fee increases, education requirements and other policies would cost more than any benefit those communities might see.

“Even if we raise LGA, we’re going to turn around and spend it and charge more money,” she said.

Kiel said other Democratic proposals such as raising the minimum wage will hit rural Minnesota harder than the metro as well. “That’s going to be detrimental to businesses.”

Leaders “truly think they’re trying” to keep rural Minnesota in mind, Kiel said.

Murphy grew up around agriculture and said she has farmers in her family. She said she understands the ag industry’s strength is essential to the state’s success.

But top concerns are different from rural to metro areas, Kiel said, and it is hard to advocate for both.

“If everything’s a priority, nothing’s a priority,” Hamilton said.

Marquart said he thinks Thissen and other leaders have “made a concerted effort to make sure the results are beneficial for rural Minnesota.”

“We know if greater Minnesota succeeds, we’ll all succeed,” Thissen said.

Hamilton said the final results of the session remain to be seen in the last few weeks, and Democratic leaders still will be in place next year, the second of a two-year legislative session.

More policy issues likely will come up then, Anderson said, and the impacts on the state outside the metro area might be clearer.

“There could be a lot more issues that are near and dear to rural Minnesota,” Anderson said. “It’s kind of a two-year trial here.”

 Reporter Don Davis contributed to this story.

Update: Education debate about more spending, better economy

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By Don Davis

A debate about education funding goes beyond helping individual students: There is widespread agreement that a better education system would help the economy.

However, there is less agreement about how to achieve those improvements.

Rep. Paul Marquart, DFL-Dilworth, tied the economy and education together Tuesday as the Minnesota House voted 83-50 to approve a $15.7 billion, two-year funding bill for schools. Many Republicans opposed the bill, saying it would place too many mandates on schools and remove a state law requiring students to pass a test before graduating.

Much of the $550 million of increased spending would go to early-childhood education, including all-day kindergarten, a concept that Marquart said is the basis of improving Minnesotans’ education.

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

Education does not end there, he said. “When our students leave high school, on Day 1 they will be ready for success.”

Marquart, whose bill picked up some Republican votes but mostly was backed by Democrats, said the vote was for historic education finance reform. “No ambition is too bold, no goal is too high.”

The chairman quoted Federal Reserve officials as saying the Minnesota economy could get a $5 billion-a-year boost if what he sees as a more effective education system is implemented. And, he said, the early years are when to start strong education practices.

“Economically speaking, early childhood programs are a good investment …” Fed Chairman Ben Bernanke said in a speech last year. “Studies show that the rest of society enjoys the majority of the benefits, reflecting the many contributions that skilled and productive workers make to the economy.”

A coalition of Minnesota businesses agrees with Marquart and Bernanke that early-childhood education is important for the economy, but has taken to the airwaves fighting the House bill’s provision overturning the graduation test.

Coalition leader Charlie 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.”

Added Rep. Sondra Erickson, R-Princeton: “I think we are dumbing down the diploma.”

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

Minnesota schools carry a 76 percent graduation rate, the chairman said. The Marquart plan would require school districts to prepare plans with a goal of graduating every student.

The state would check progress districts make to graduate all students, have all students reading by third grade and see better achievements for minorities. If a district fails three straight years, the state could take over school administration.

Marquart said the current graduation test is not working, citing a large number of college students who need to take remedial classes.

His bill would require school districts to begin in middle school preparing students for college or a job by the time they finish high school.

The House bill provides enough money for every school district that wishes to establish all-day kindergarten with state funds.

However, Rep. Dean Urdahl, R-Grove City, said some districts do not have the room for all-day kindergarten, so they would be left out.

Overall, Rep. Kelby Woodard, R-Belle Plaine, was not happy with the House bill, saying it includes too many mandates. “We need to stop acting as the state school board.”

Erickson said the bill makes the Minnesota Education Department a “command and control center.”

Education spending, the largest single part of the Minnesota budget, would rise $550 million in the next two years under the House Democratic plan.

Among items in the House bill are those:

– Increasing per-pupil payments to school districts by $209, which is 2 percent more in the school funding formula each of the next two years.

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

– Taking steps to close the gap between districts that have high revenue and those with less revenue potential.

– Preventing schools from firing a coach purely on parental complaints.

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.

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.

House DFLers set high education funding goals

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Marquart

By Don Davis

Goals of 100 percent high school graduation, every third-grader being able to read, ending an achievement gap and all students being ready for careers or college after graduation are lofty, but House Democrats say their sights are set on those accomplishments by 2027.

Rep. Paul Marquart, DFL-Dilworth, said Tuesday that the $15.7 billion House Democrats want to spend on education in the next two years would “actually make a difference in the life of every single student of this state.”

The House education financing plan closely follows one released by Democratic Gov. Mark Dayton, but takes a new approach to improve education.

Marquart said schools would be required to submit plans to show how they would achieve the major goals. Once approved by state officials, schools then would be required to make annual progress toward the goals.

If a school did not make good progress in meeting the goals three straight years, the state could step in and maybe even take over a school.

Marquart said state Education Department officials would be the judges about whether schools are making adequate progress.

Schools would receive an additional per-student payment of $104 each of the next two years “to give schools the resources … they need to meet those goals,” Marquart said.

The plan calls for spending $15.7 billion in the next two years, the largest part of a proposed $38 billion budget, a bit more than in Gov. Mark Dayton’s budget plan. The Senate has yet to announce its school budget.

Current education spending is $15.5 billion.

Rep. Kelby Woodard of Belle Plaine, the top House education Republican, said Democrats are off to a good start, but tax increases they propose are not needed to fund schools.

“It is disappointing, however, Democrats propose spending new money to create new layers of government bureaucracy while thrusting even more unfunded mandates on our schools,” Woodard said. “Those are key areas we need to address before we gain wholesale bipartisan support.”

House Speaker Paul Thissen, DFL-Minneapolis, said that education improvements, especially for young children, are “the best way to build a strong middle class.”

Minnesota used to be the top education state, House Majority Leader Erin Murphy, DFL-St. Paul, said. “We have slipped to the middle of the pack in the last 10 years.”

Marquart, House education finance chairman, said his bill would fix the problems Murphy mentioned. He said proven tactics would be used by Minnesota educators, particularly new efforts in early-childhood education.

About $50 million would go to providing scholarships to families with 3- and 4-year-olds to attend public or private preschools, Marquart said. They would need to have incomes less than 185 percent of the federal poverty level to qualify for the state-issued scholarships.

Marquart estimated that 8,000 students would get the scholarships, but that only is a quarter to a third of those who need them. The average scholarship would be $7,400 a year.

Marquart said he expects every Minnesota school district to take advantage of the all-day kindergarten money.

New general money available to schools could be used as districts wish, but Marquart said they would need to use it to reach the main education goals.

The portion of the education plan to require continual progress should be treated like coaching, Marquart said. “It is coaching and working with the excellent staffs in the state.”

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.

DFL House plan would raise taxes on rich for school aid

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Marquart

By Don Davis

Minnesota schools would be the biggest beneficiaries of a state House Democratic budget proposal that goes beyond the governor’s plan to increase taxes on the rich.

Minnesota House Speaker Paul Thissen, DFL-Minneapolis, unveiled a budget outline Tuesday that accepts Democratic Gov. Mark Dayton’s plan to boost taxes on the richest 2 percent of Minnesotans, and he went further by suggesting a temporary surcharge, probably on those earning more than $500,000.

DFL leaders said the surcharge would bring in $854 million needed to repay schools money the state borrowed from them over recent years. Thissen said the surcharge would disappear in two years.

House Republican Leader Kurt Daudt, R-Crown, said he was reminded of an old saying: “There is nothing so permanent as a temporary tax.”

The budget outline House Democrats released Tuesday is similar to a budget plan Dayton unveiled last week. Senate Democrats plan to release their plan today.

Democrats control the House, Senate and governor’s office for the first time in more than 20 years.

The House plan calls for a $37.8 billion, two-year budget.

Education Finance Chairman Paul Marquart, DFL-Dilworth, said that $700 million added to all levels of education is vital to improving the state’s economy. He said funds would especially help all-day kindergarten and other early childhood programs.

“When you invest early, you raise the graduation rate,” he said.

The House plan calls for enough money that every school district could institute all-day kindergarten. Dayton proposes some funds, but not enough to allow every school to be involved.

The DFL plan would boost public school funding by $550 million to $15.7 billion in the next two years. Higher education programs would get $150 million more, $11.2 billion total.

Most suggestions in the plan call for modest budget increases, but Democrats would cut $150 million from the $11.4 billion human services budget.

The biggest controversy likely will be around the proposal to increase taxes on the richest Minnesotans.

“Just as the state’s economy is beginning to recover, the House leadership is proposing increasing taxes to astonishing new levels, up to a rate of 11 percent on the state’s top wage-earners,” Senior Vice President Laura Bordelon of the Minnesota Chamber of Commerce said. “Roughly 20,000 small- and mid-sized businesses in Minnesota that pay their taxes through the personal income tax will be subject to these significant increases. We question how this proposal will improve economic competitiveness and job creation in Minnesota.”

Thissen, however, said Minnesota’s rich need to pay “their fair share.” Had they done that over the years, he said, schools would not be short of money.

He said Dayton’s proposal to raise taxes on couples with a $250,000 annual income and individuals earning $150,000 “is not enough” to raise enough money for what Democrats want to spend.

Thissen could not say exactly which taxes would increase, but said he expects elimination of what some see as loopholes corporations use to avoid taxes.

The speaker said that he would not expect a major sales tax increase like Dayton originally proposed, but he left open the possibility of some sales tax hikes.

The return of a homestead tax credit, which lowers most homeowners’ property taxes, is one of the Democrats’ priorities.

Tax increases would hurt Minnesotans, Republicans said.

“They would definitely show up in the budgets of average Minnesotans,” said Rep. Mary Liz Holberg, R-Lakeville.

Daudt said that more money for education could come from cutting other budgets. “What we showed the last couple of years is you can do things without tax increases.”

Taxes remain topic as Minnesota budget deficit shrinks

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Schowalter

By Danielle Killey

Talk of tax increases continues even as economists anticipate a smaller state budget deficit.

“Tax reform is important for Minnesota’s future,” Senate Majority Leader Tom Bakk, DFL-Cook, said. “I don’t think this will even slow that down.”

Bakk’s comments came shortly after Minnesota Management and Budget reported Thursday the state will face a $627 million shortfall in the next two years, down from $1.1 billion predicted in late 2012.

The state also has a surplus of $295 million for this year, most of which will go to repay money the state borrowed from public schools.

Democratic Gov. Mark Dayton and lawmakers will use Thursday’s budget forecast to set the state budget during the final three months of the legislative session.

“The forecast really sets the table for where the issues are,” Commissioner Jim Schowalter of Minnesota Management and Budget said.

House Speaker Paul Thissen, DFL-Minneapolis, said the forecast is positive, but there is work to be done.

“We still have a deficit,” he said. “We still have a big chunk to deal with just to get back to zero.”

Republicans argued the lower deficit means Dayton should rethink plans to increase taxes.

“If Gov. Dayton and DFL legislators are looking for a reason to raise taxes, they won’t find one in this budget forecast,” House Minority Leader Kurt Daudt, R-Crown, said.

Dayton suggested the better outlook could lead to tax cuts, such as an increased renters’ credit. He did not say he will change proposals to raise income taxes on the richest Minnesotans or sales tax changes. The income tax increase is expected to bring in an extra $1.1 billion and sales taxes changes would result in a $2 billion net increase in revenue.

The governor’s original budget proposal would spend $38 billion over the next two years. He said he will make more concrete decisions about his budget in the coming days and release an updated plan the week of March 11.

The forecast Thursday included about $297 million more than previously expected from income taxes.

Daudt said that is evidence the state’s economy is improving.

“You don’t need to raise the rate to raise revenue,” he said. “You need to get more people back to work.”

Sen. Dave Thompson, R-Lakeville, said Republican policies of not raising taxes and “restraining the size of government” have contributed to the better outlook.

“I’m hoping the governor adjusts his path,” he said, adding tax increases are not only unnecessary but “damaging.”

Dayton said the forecast was good news for Minnesota and a step in the right direction, but “it is not progress anyone is satisfied with.”

Schowalter said the economy is being hurt, in part, because federal budget issues remain unresolved. The economy is “making steady progress, but not nearly enough,” he said.

“We have a new forecast, but a relatively old story,” Schowalter said.

Thissen said he hopes lawmakers can get out of the cycle of deficits.

“We also need to raise new revenue if we want to invest in the things that will improve the quality of life for Minnesota families: education, infrastructure and property tax relief,” Bakk said.

State Economist Tom Stinson downplayed the economic impact of massive federal budget cuts due to begin Friday, but said it could slow state economic growth.

“There’s more going on than just Minnesota policies,” Stinson said.

A state budget must be set by July 1 to avoid a state government shutdown. Democrats, who hold the majority in the House and Senate, have said they will not allow a shutdown.

The state technically is not allowed to have a deficit, so it would have to offset that by raising taxes, cutting spending or a combination.

“Over the coming days and weeks budget discussions will pick up and the task of improving our education system and future workforce will continue,” Rep. Paul Marquart, DFL-Dilworth, said.  “We need to think big again and go in a new direction that puts the middle class first.”

“Today’s forecast is good news, but our state is still not on stable financial footing,” Rep. Mary Sawatzky, DFL-Willmar, said. “Minnesotans deserve an honest budget balanced without gimmicks that funds our priorities and lays the foundation for a stronger economy, a stronger middle class, and a stronger future.”

“The improved forecast is definitely better than the alternative,” Rep. Roger Erickson, DFL-Baudette, said. “But we can’t let this small improvement cover up the fact that we’re still faced with a $600 million budget deficit. The only way we can move forward from this past decade of budget deficits is to help make a fair tax system that lets us invest in things like education, property tax relief and job creation.”

“I’m pleased that our deficit is shrinking, but it’s still another in our decade of deficits,” Rep. John Ward, DFL-Baxter, said. “Minnesotans deserve a budget that is balanced honestly without gimmicks, one that funds the things we value as Minnesotans and keeps us economically competitive.”

“We have less of a mess to clean up, but a mess nonetheless,” Rep. Joe Radinovich, DFL-Crosby, said. “We need to close this deficit and begin re-investing in Minnesota’s future.”

“Today’s forecast numbers are encouraging, but we must remember the need for a sustainable and honest solution,” Sen. Roger Reinert, DFL-Duluth, said. “With these numbers in hand, the real budget work begins.”

“Overall, this is encouraging news,” Sen. Kent Eken. DFL-Twin Valley, said. “It shows Minnesota continues to move in the right direction and that our economy keeps improving. But it also highlights the work we still have to do. The next few months will consist of looking closely at every penny of spending.”

“It’s vitally important the Legislature make responsible budget decisions to ensure we don’t disrupt this positive economic progress and that we keep Minnesota on the right track,” Sen. Lyle Koenen, DFL-Clara City, said. “Using a sensible balance of spending cuts, responsible new revenue and targeted government reforms is the combination needed to solve the deficit and support continued economic recovery.”

“With Minnesota’s budget outlook greatly improving, Gov. Mark Dayton has lost all justification for raising taxes on haircuts, car repairs and certain clothing items,” said Ben Golnik, Republican activist and Minnesota Jobs Coalition chairman. “The bottom line is that Minnesota’s deficit is now manageable enough to solve without raising taxes on anyone.”

“While today’s news shows improvement, the state still faces a $627 million budget shortfall,” Minnesota DFL Chairman Ken Martin said. “Leaders need an honest budget that gets Minnesota off the financial roller coaster of the last decade and makes investments to move Minnesota forward.”

Dayton budget plan features more funds for young children

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Marquart, with Melcher watching

By Don Davis

Adding money to early childhood education and all-day kindergarten programs, as Gov. Mark Dayton suggests, is important to Minnesota’s future, the state House education finance leader says.

“Those two programs really pay dividends into the future,” Rep. Paul Marquart, DFL-Dilworth, said Tuesday before he presented the Dayton budget proposal to his committee.

Dayton’s $15.5 billion two-year education budget proposal would be about $1 billion more than for two years ending June 30. Nearly a third of the new money would go to early-childhood education and pre-kindergarten.

Public school funding would be 41 percent of all spending from state tax money.

Much of the increase would go to pre-first grade education and increasing per-pupil state aid $52 next year. The new pupil aid would give school districts an average of $5,276 next year.

The budget also would spend $10.5 million more for schools with declining enrollment. However, the Dayton plan does not provide specific funds to districts, especially in rural Minnesota, that have less ability to raise money.

The budget plan “does not create any huge changes in distributions of dollars targeted to low-revenue districts,” Tom Melcher of the state Education Department said. “There is some movement in that direction, but we are not seeing a dramatic change.”

Rep. Glenn Gruenhagen, R-Glencoe, said he has heard rural school officials complain that urban districts get far more state aid than rural schools, and he does not want to see that difference grow.

Melcher said Dayton looked at the situation, but “there would have been a significant cost associated with that.”

The Education Department’s Kevin McHenry said provisions Dayton suggests, such as reducing paperwork requirements, could especially help rural schools. “We are trying to provide some more flexibility.”

Marquart, an outspoken proponent of rural Minnesota, called the Dayton plan “a good starting point.” While he said the final school funding bill likely will be similar to the Dayton plan, changes will be made.

Among provisions in the Dayton plan are:

– A requirement that schools districts offering pre-kindergarten education to test children to ensure they are ready.

– More funding for all-day kindergarten, although state money would not fully fund the optional program.

– Funds to keep at least the same amount of money flowing to schools as they now receive.

– Programs to help low-achieving students do better.

Dayton emphasizes education, jobs

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Dayton

By Don Davis and Danielle Killey

Nearly $730 million more would be available to education and jobs programs under a budget Gov. Mark Dayton proposes for the next two years.

The plan Dayton released Tuesday would increase taxes about $2 billion. The state would raise and spend nearly $38 billion in the two years beginning July 1 under the Dayton plan.

About half of the new money would plug the state deficit, with the other half upping spending in areas such as education and jobs.

The Democratic governor said the budget, if legislators approve, would fulfill one of his key promises. “I made a commitment to increase state (education) support every year: no excuses, no exceptions.”

A better funded education system would help Minnesotans get jobs, he said.

He also said more jobs would be available if lawmakers approve his economic development plan, which provides business loans, tax breaks and other incentives.

Dayton said his combination of tax increases and higher spending is a more balanced approach than Republicans have allowed in the past decade.

“It ends the fiscal games, accounting gimmicks, payment delays and other financial manipulations of the last 10 years,” Dayton said.

Republicans were not happy with what they saw.

House Minority Leader Kurt Daudt, R-Crown, said he thinks the plan will push jobs out of Minnesota and that it is too heavy on new taxes rather than cuts.

“These are things that are not going to help Minnesota’s economy grow,” he said.

Dayton’s fellow Democrats control the Legislature, and generally agree with his ideas.

“This is a bold plan,” Senate Majority Leader Tom Bakk, DFL-Cook, said.

Bakk and other Democratic-Farmer-Laborite leaders would not discuss specifics of the plan.

“I think this budget positions us well for the next generation,” said Assistant Majority Leader Sen. Katie Sieben, DFL-Cottage Grove, specifically citing education funding as a positive piece of the budget.

“This is the best state budget for education the state has seen in decades,” House Speaker Paul Thissen, DFL-Minneapolis, agreed.

Dayton suggests $118 million in new public school funding, an average of $52 per student, and $125 million more for special education.

More money would be spent on early learning and all-day kindergarten, which would be optional for schools across the state.

Public schools would receive $15 billion under the Dayton plan, with the state’s two higher education systems getting nearly $3 billion, $80 million more each.

The House education finance chairman was happy with Dayton’s plan.

“For too many years we’ve failed to make the necessary investments to help our economy and middle class grow,” Rep. Paul Marquart, DFL-Dilworth, said.

Marquart added his voice to other lawmakers who said that Tuesday’s budget proposal is not the end as lawmakers prepare to dig into it beginning today.

University of Minnesota President Eric Kaler called the Dayton plan good news. Among other things, the funding increase would allow the university system to freeze tuition, he said.

The governor’s proposed budget will enable us to invest in research and innovation to fuel the state’s industries where great strength exists,” Kaler said.

Dayton wants to increase payments to cities and counties $120 million to help keep down property taxes.

That is good news, Executive Director Jim Miller of the League of Minnesota Cities said. “It is hard to not at least be pleased.”

However, he added, cities need to wait to see how the money will be divided before knowing how valuable it will be.

An $86.5 million boost in economic development funding should create jobs, Dayton said, but he could not say how many.

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Taxes

Changes Minnesota Gov. Mark Dayton proposes in taxes include:

– Sales tax rate reduction from 6.875 percent to 5.5 percent, but tax more items, including most services, such as haircuts and auto repairs, and clothing items that cost more than $100

– A new income tax rate of 9.85 percent for married couples making more than $250,000, individuals who make more than $150,000

– A drop in the corporate income tax rate from 9.8 percent to 8.4 percent

– A property tax credit of up to $500 for homeowners

– A 94-cent per-pack increase in the cigarette tax

– A two-year freeze on state property taxes for businesses

Spending

New spending the governor proposes include:

– $120 million aid for cities and counties

– $86.5 for economic development programs designed to create jobs

– $118 million in school funding, $52 per student

– $125 million for special education programs and $40 million for all-day kindergarten

– $80 million for the state grant program, providing funds for low- and moderate-income college students

– $80 million each to the University of Minnesota and Minnesota State Colleges and Universities

– $10 million more for teacher evaluations and other education programs

– $9 million for English language learning

Savings

The governor says his budget will save:

– $1 billion in better managing health care

– By eliminating a “loophole” afforded some corporations

– $890 million by requiring state agencies to absorb inflation costs

Source: Governor’s office

 

Early bills show what is important

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By Danielle Killey and Don Davis

Taxes, education funding, constitutional amendments and health care top Minnesota lawmakers’ priorities for the 2013 legislative session, according to some of the first bills introduced.

Most of the early bills are from Democratic-Farmer-Labor lawmakers, who control the House and Senate, and feature topics such as increasing the minimum wage that always are among their prime concerns.

This year’s session, which began Tuesday, will concentrate on drafting the state’s two-year budget, but most work on that will not begin until after Gov. Mark Dayton releases his budget plan Jan. 22.

Senate Majority Leader Tom Bakk, DFL-Cook, said the budget is the biggest issue for the current session, but there are other topics important to lawmakers as well.

The first four state Senate bills introduced would create a Minnesota health insurance marketplace, provide state funding for voluntary all-day kindergarten in public schools, raise and automatically increase the minimum wage and make it harder for constitutional amendments to be put on the ballot.

Early House bills include a plan to repay money owed to Minnesota schools, changing a property tax credit and providing grants to small businesses.

So far, 20 bills have been introduced in the Senate and 54 in the House. They are a tiny preview of what is to come; lawmakers introduced 6,710 in the last two-year Legislature.

Taxes are popular topics.

One bill proposed this year would remove Minnesota’s long-standing sales tax exception on clothing purchases above $200. Another would tax clothing, but would give a clothing tax credit on Minnesotans’ tax returns.

A measure would remove an income tax exception some foreign companies receive, long a thorn in the side of Democrats. Another idea that often has been discussed now is in a bill to tax Internet sales.

Introducing a bill early gives it little advantage, other than being in the public eye longer than a bill offered later in the session. However, lawmakers take a certain amount of pride in authoring a bill with a low number.

Rep. Paul Marquart, DFL-Dilworth, has his name among the authors of the first three House bills: beginning to pay back schools, starting a new homestead tax credit to lower property taxes and setting up a program to give grants to small businesses.

Since all three of those bills require money, they could change dramatically after the governor releases his budget plan and lawmakers learn more about the economy.

“We don’t know it will be the final version,” Marquart said homestead credit bill.

Looking at early Senate bills, Senate Minority Leader David Hann, R-Eden Prairie, said he does not see much help for the economy and jobs creation.

A constitutional amendment proposal, carried by Bakk, would require a three-fifths majority in each chamber of the Legislature to put a proposed constitutional amendment before voters.

Similar proposals are being put forward in the House.

“I think those were the most divisive issues,” Bakk said of the constitutional amendments voters faced last fall.

Hann said that despite the Legislature passing the amendments last year, they failed in front of voters, so making amendments harder to pass is not needed.

The plan for Minnesota’s participation in the health care exchange, part of national health care legislation known as Obamacare, already has been a topic of discussion at the Capitol after legislators rolled out a proposal Wednesday.

Republican Sen. Dave Thompson of Lakeville said he is not surprised the plan is one of the first bills proposed given a March deadline. But, he added, “I think we need to proceed with extreme caution.”

Thompson said he is concerned that proposals such as the one to raise the minimum wage will hurt Minnesota businesses and contribute to unemployment rather than stimulate the economy.

But Sen. Chris Eaton, DFL-Brooklyn Center, said that “putting more money in the pockets of minimum wage-earners is good for the whole economy.”

One of the few early bills by a freshman came from Sen. Greg Clausen, DFL-Rosemount, who is an author on the bill to fund all-day kindergarten.

Rep. Mary Sawatzky, DFL-Willmar, also a freshman, wants to increase Minnesota World Trade Office funding from $1.78 million to $2.5 million the next two years.

“Helping our businesses grow jobs should be one of our top priorities in the legislative session,” Sawatzky said. “My bill seeks to expand the reach of the Trade Office and to open up markets for small- and medium-sized Minnesota businesses to sell their products. This will help local businesses and farmers in our area and throughout greater Minnesota.”

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Some of the first bills introduced into the Minnesota Legislature:

– Begins paying back money the state borrowed from school districts.

– Establishes mostly on line health insurance marketplace.

– Increases renters’ property tax rebates and restores a homestead property tax credit that would base property tax refunds on a person’s income.

– Establishes and finances all-day kindergarten.

– Provides state grants to small businesses.

– Sets up minimum wage to automatically increase.

– Increases minimum wage to $9.38 an hour in large businesses and $8.01 in small businesses.

– Establishes a northern Minnesota veterans’ home.

– Expands Medical Assistance eligibility.

– Makes it harder to amend the state Constitution by requiring two-thirds or three-fifths of the House and Senate to approve a proposed constitutional amendment before it goes to voters (several bills, some would accomplish it by amending the Constitution, others by just passing a law).

Budget to dominate session, but other issues will surface, too

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Money dominates conversation as Minnesota legislators prepare to begin their 2013 session at noon today.

It is such a dominant part of the session that when caught rushing to a midday Monday appointment, Rep. Paul Marquart, DFL-Dilworth, could not think of an important non-budget issue. In fact, Marquart said he has told fellow state representatives that the budget is so important that they should not consider issues such as gay marriage and gun control this year.

Down the hall and around the corner in the State Office Building, Rep.-elect Dan Schoen, DFL-St. Paul Park, sat with a resident of his southwestern Twin Cities area and just came up with one non-budget issue: A provision that would help police warn domestic violence victims if a partner’s actions could become life threatening.

“First and foremost is the budget,” said Rep. Erin Murphy, DFL-St. Paul, who will become House majority leader when the new crop of lawmakers is sworn in today.

The state Constitution requires that the session must end by May 20. It also mandates lawmakers to pass a budget for two years beginning July 1.

The budget, which faces a $1.1 billion deficit, likely will be more than $35 billion.

A new dynamic is that Gov. Mark Dayton and legislative majorities are all Democratic for the first time in three decades.

Two men who were re-elected Nov. 6 will not be sworn in today. Rep. Terry Morrow, DFL-St. Peter, resigned Monday to take a job out of state. Also, Rep. Steve Gottwalt, R-St. Cloud, leaves after accepting a lobbying job.

Special elections will be held for both seats.

With 24 hours to go before today’s opening ceremony, the Capitol and State Office Building were quiet.

Marquart hosted a meeting as he began preparations to write an education budget and try to reform how education is funded. It was the first time he and Education Commissioner Brenda Cassellius met face-to-face since he was named chairman.

Other than an occasional lawmaker setting up an office, things were quiet around the Capitol. However, lawmakers were busy elsewhere later in the day since under state law at noon today they must stop political fundraising until May. They attended several fundraisers Monday and Monday night.

Only formalities are expected today, and little is planned for the rest of the week.

For many, a slow day or two would come in handy. Schoen, for instance, had no assistant or neighbors to help him get settled in.

“I’m still trying to learn how to work this thing,” he said, picking up his telephone receiver.

Senate Majority Leader-elect Tom Bakk, DFL-Cook, has said for weeks that lawmakers need to focus on the budget, putting off Democrats who strongly believe in issues such as gun control and gay marriage.

However, incoming House Speaker Paul Thissen, DFL-Minneapolis, said last week that lawmakers can do more than one thing at a time, not ruling out many of the issues being discussed.

Marquart said he does not want gun, gays and other social issues to get in the way of budget work. Besides, he said, rural lawmakers may not be able to support some of those causes.

“No doubt those are difficult issues in rural Minnesota,” he said, “and ones we should not focus on.”

Murphy, who beat Marquart as No. 2 leader in the House, refused to say what other issues may arise in the next five months.

“There will be lots of ideas that come to the Legislature via various members,” Murphy said. “Some of them are going to be considered and some of them won’t be considered.”

Among issues expected to be discussed are:

– Taxes. Dayton long has wanted to raise taxes on the rich and is expected to propose that when he releases his budget on Jan. 22. But the governor and lawmakers are expected to look at other changes, too, including ways to slow the rise in property taxes.

– Gay marriage. After Minnesotans rejected putting a gay marriage ban in the state Constitution, same-sex marriage supporters are pressing Democrats who control the Legislature to take the ban out of state law.

– Guns. The December Connecticut school shooting has driven some Democrats to call for stricter gun control, but many Republicans and rural Democrats oppose the move.

– Education. Changing how education is funded is one of the issues being discussed, although a full overhaul probably would involve more money than likely will be available this year.

– Jobs. Every year lawmakers talk about how to improve the job climate, and more talk about that is expected.

– Higher education. State-run colleges and universities have been among institutions to feel the deepest budget cuts in recent years, and there is a move to change that.

– Transportation. Rural and city lawmakers call for more transportation funding, but that probably would involve tax increases that Republicans oppose.

– Labor. Democrats generally support allowing home day care workers and personal care attendants to form unions.

– Medical marijuana. Bakk told reporters last month that he supports a bill that would allow patients to use marijuana for pain control.

– Fracking. Mining sand to be used by oil and natural gas industries for hydraulic fracturing is a controversial topic, especially in southeastern Minnesota. Many lawmakers say they favor some type of regulation, and some want a full moratorium on the mining.