Tag Archives: paul thissen

Final $2 billion tax deal merges 3 plans

Posted on by

Bakk, Thissen

By Don Davis

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

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

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

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

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

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

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

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

– Some corporate tax loopholes will be closed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted on by

Bakk

By Don Davis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

– Some business tax breaks would disappear.

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

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

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

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

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

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

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

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

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

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

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

Hann, Daudt

Budget outline released, with details to come

Posted on by

Thissen and other leaders

By Don Davis

 

Minnesota Democratic leaders plan to raise Minnesotans’ taxes $2 billion in the next two years, with much of the money going for education.

 

The governor and legislative leaders announced this afternoon, eight days before lawmakers must adjourn for the year, that they have an outline for how to spend $38 billion in the next two years and how to raise money they need.

 

“It’s too early to call a victory lap,” House Speaker Paul Thissen, DFL-Minneapolis, said, because most of the details are being left to House-Senate budget and tax conference committees that are to negotiate final details.

 

With Democrats controlling the House, Senate and governor’s office, three people are in charge of making most decisions about what will be presented to 201 lawmakers. Republicans have not been involved in budget talks.

 

Thissen, Gov. Mark Dayton and Senate Majority Leader Tom Bakk of Cook said they agreed on spending targets and will give conference committees a few other guidelines, such as:

 

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

 

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

 

– An income tax surcharge would be added for Minnesota’s richest of the rich, with proceeds going to help repay money the state has borrowed from school districts.

 

– Cigarette taxes would rise.

 

– Some business tax breaks would disappear.

 

– All-day kindergarten would be funded.

 

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

 

The size of tax increases and other details of the budget remain undecided.

 

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

 

The three Democrats said middle income Minnesotans would not pay more taxes other than for cigarettes. But when reporters pushed him on the subject, Dayton said that some of the business taxes could trickle down to consumers in higher prices.

 

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

 

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

 

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

 

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

 

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

 

Divide remains between rural Republicans, House leaders

Posted on by

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.

Legislative notebook: Lockout extension out

Posted on by

By Don Davis

Minnesota senators removed extended unemployment benefits for workers locked out by employers in labor disputes during a Friday bill debate

The provision was a Democratic response to a 20-month lockout by American Crystal Sugar Co., as well as a pair of Twin Cities orchestra labor disputes. American Crystal employees and performers in one orchestra recently voted to accept contracts their employers offered.

Sen. Bill Ingebrigtsen, R-Alexandria, used the American Crystal example, saying Minnesotans would pay if unemployment benefits were extended two years as the provision sought.

“We all know who pays for that,” he said. “You and I are going to pay for that at the store.”

Senators complained that professional athletes whose teams locked them out would have been covered by the additional unemployment payments.

Sen. David Tomassoni, DFL-Chisholm, offered to amend his bill to reduce the unemployment extension to a year and exclude pro athletes from added benefits. His effort lost 33-31.

The amendment to remove the lockout provisions from a larger bill passed 34-31. Rep. Paul Gazelka, R-Nisswa, offered the successful amendment.

A lockout provision remains active in a House bill, so it could return to the Senate next month embedded in another bill.

Tomassoni said locked out workers need help when their wages dry up: “They can’t put food on the table, they can’t pay for insurance, they can’t pay for the car.”

Current law normally gives locked out workers 26 weeks of unemployment payments.

Thissen names vet panel

House Speaker Paul Thissen has appointed a committee to recommend the next step in military veterans’ homes.

The Minneapolis Democrat took the action Friday at about the same time veterans’ organizations complained that the House public works finance bill did not fund a $54 million project to complete work on the Minneapolis Veterans’ Home.

A news release announcing the Thissen decision said: “The Select Committee on Veterans Housing will research, investigate and report on the current state of housing for Minnesota veterans and ultimately recommend policies to assure safe, high-quality and cost-effective housing options are available for Minnesota veterans.”

Thissen’s decision mirrors the wishes of Rep. Alice Hausman, DFL-St. Paul, who leads the House committee that recommends public works projects. She said on Friday that each bed in the Minneapolis location would cost thousands of dollars.

Earlier this month, Hausman said she wants a statewide study before decisions are made about where state funding should go for veterans’ homes. Legislators have proposals for at least three new veterans’ homes, in Montevideo, Brainerd and Bemidji.

State Veterans’ Affairs Department officials say their top priority is fixing the Minneapolis facility, but have no overall plans for new homes.

“This committee will dig into the details of this issue and come back with solutions that are in the best interest of our veterans throughout Minnesota,” Thissen said.

Members of the committee are Reps. Jerry Newton, DFL-Coon Rapids; Hausman; Mary Murphy, DFL-Hermantown; Karen Clark, DFL-Minneapolis; Tom Huntley, DFL-Duluth; Bob Dettmer, R-Forest Lake; Paul Anderson, R-Starbuck; Jim Abeler, R-Anoka; and Matt Dean, R-Dellwood.

The report is due next Feb. 1.

Public safety OK’d

The House overwhelmingly voted to fund public safety programs for the next two years.

On a 122-7 Friday vote, representatives decided to do things like replace an old computerized criminal history system, begin restoring cuts to the state Office of Justice and buy public safety equipment.

The bill also would establish a school safety center to help local districts prevent shootings like have been in the news lately.

Programs to serve crime victims would receive a boost in state funds.

Judicial budget up

Judges and other court workers would receive pay raises under a bill state representatives backed Friday.

Courts would get nearly $800 million under the bill that passed 71-59.

The bill would impose a $2 fee on each court filing, to be used to technology improvement, increase criminal and traffic surcharges and raise a graduated filing fee for conciliation court claims.

Rep. Steve Drazkowski, R-Mazeppa, said the bill’s $50 million increase from the current two-year budget cycle is too much.

“This bill is a classic example of the Democrats joy in spending other people’s money, Drazkowski said. “Instead of forcing government to live within its means, hard-working Minnesotans will be forced to pay millions of dollars in fee and surcharge increases over the next two years just so six-figure salaried judges can get a big pay raise.”

Earlier, Chief Justice Lori S. Gildea said in an interview that the court is losing workers because of an inability to raise salaries. Judge pay is behind what they receive in other states, she added.

House DFL outlines tax plan

Posted on by

By Danielle Killey

House Democrat leaders say they need to raise taxes on the richest Minnesotans’ incomes, alcohol and cigarettes to fund top priorities.

The extra $2.5 billion in revenue they would gain from new or expanded taxes would go to pay back state money owed to school districts and fund key areas such as early childhood and higher education, job creation and property tax relief, legislative leaders said Monday.

“Those critical investments are not free,” House Speaker Paul Thissen, DFL-Minneapolis, said.

Lawmakers also have to fill a $627 million projected deficit for the next two years.

House Majority Leader Erin Murphy, DFL-St. Paul, said a mix of new revenue, reforms and some cuts will pay for Democrats’ spending priorities, which she said some Republicans share.

The House Democrats’ tax plan would create a fourth tier income tax rate of 8.49 percent for couples making more than $400,000 a year in taxable income, up from the current top rate of 7.85 percent.

The plan also would create a two-year surcharge on couples’ income more than $500,000. That surcharge would be 4 percent of any income above $500,000. Democrat leaders emphasized the extra charge would “blink off” after two years.

“Our plan will make historic investments in education and pay for them responsibly and fairly by asking big corporations and the wealthiest Minnesotans to pay their fair share,” Murphy said. “We’re using all the tools available to us to get Minnesota on better financial footing.”

Gov. Mark Dayton and the Senate also likely will include higher taxes on top earners, though the rates and incomes differ. Support for the surcharge, however, is not strong outside the House.

Thissen said the proposed alcohol tax increase, expected to bring in roughly $350 million over two years, would be on wholesale products but essentially would equate to about 7 cents per beer, 47 cents per bottle of wine and $1.58 on a bottle of liquor.

Smokers would see a $1.60 per pack cigarette tax increase, pushing the tax to $2.83 per pack and likely bringing the state more than $400 million. Gov. Mark Dayton’s plan ups the tax by 94 cents.

Republican Rep. Greg Davids of Preston, former tax committee chairman, said the alcohol and cigarette taxes are problematic because they disproportionately affect low-income taxpayers.

The House plan does include some cuts, such as to the Health and Human Services budget.

“I think Minnesotans expect a balanced approach,” Thissen said.

Republicans said the plan will hurt Minnesotans and businesses.

“This proposal would force massive job-killing tax increases on our business owners and devastating regressive tax hikes on the poorest of the poor,” Davids said.

The House plan does not include changes to the sales tax, though the Senate proposal likely will. Dayton originally proposed expanding the sales tax to include more goods and services, such as clothing, and lowering the overall rate. But that provision was erased when he revised his plan.

The net revenue of the House tax plan would be about $1.5 billion, Thissen said.

About 1 million Minnesotans would see property tax relief under the plan, which includes a reworked renters’ credit and a homeowner’s refund, Democrats said.

The bill also would eliminate corporate tax loopholes for profits held overseas and put funds toward projects at the Mall of America, 3M and Mayo’s proposed Destination Medical Center.

Thissen said he expects the tax bill will be before the full House next week.

Political notebook: Taxes split DFL

Posted on by

Skoe

By Don Davis

Everyone knew taxes would be a prime discussion point this Minnesota legislative session, but it now appears to be less between Democrats and Republicans than among Democrats who control the House, Senate and governor’s office.

The GOP-DFL split is well known: raise taxes vs. cut taxes. But Democratic-Farmer-Labor divisions are less predictable.

Legislative Democrats appear to agree with Gov. Mark Dayton’s proposal to increase taxes on the richest 2 percent of Minnesotans. Beyond that, there is less agreement.

At the beginning of the year, Dayton wanted to increase sales taxes on goods and services, while lowering the overall rate. That idea fell with a thud, and he abandoned it last month.

Now, Senate Democrats propose something similar and Taxes Chairman Rod Skoe, DFL-Clearbrook, said he expects that to be in a tax bill he will unveil in a couple of weeks.

But Dayton does not plan to revisit his failed proposal.

“The governor has his own tax plan; he has no interest in an expanded sales tax proposal,” Dayton spokeswoman Katharine Tinucci said, stopping short of saying Dayton would veto the concept.

House Speaker Paul Thissen, DFL-Minneapolis, also is not interested in the sales tax.

On the other hand, a House plan to add a two-year income tax surcharge on the richest of the rich — on top of the Dayton tax on the top 2 percent — has little or no support in the Senate or governor’s office.

Democrats need more than $2 billion in new taxes over two years to fund increased spending they want in areas such as education.

“We don’t believe we need any tax increases,” Senate Minority Leader David Hann, R-Eden Prairie, said, citing a $145 million increase above projections in February and March revenues.

Busy time

Legislators have been talking budget since well before the November election, but now they get serious.

“It’s only going to get busier,” House Speaker Paul Thissen, DFL-Minneapolis, said.

Monday marks the first day the full House and Senate will debate budget bills. In the Senate, discussion will center on a bill to fund various state agencies, veterans and military programs. The House plans to delve into a jobs bill, including funding economic development programs.

Legislative leaders said they expect to meet every day Monday through Saturday, with all-day sessions possible late in the week.

The state budget is divided among various committees to deal with part of the spending plan. All of those committees are producing their final bills, sending them to the House Ways and Means and Senate Finance committees.

As those two committees wrap up work on each budget area, the bills are sent to the full House and Senate.

The goal is for final initial votes on each budget area by the end of April, giving conference committees time to combine House and Senate versions of the bills with proposals by Gov. Mark Dayton.

The Legislature must adjourn by May 20.

Mayo holding

Mayo Clinic’s dream of getting more than $500 million in state money needed some retooling in recent days as it ran into several roadblocks.

The original plan was for the state to sell bonds to finance $585 million in infrastructure and cultural improvements for Rochester, where Mayo is headquartered. Repayment of the bonds would be financed by taxes that Mayo’s $3 billion expansion is expected to bring in.

It was a complex plan, and could reduce the amount of bonds the state could sell for other projects. So the reworked plan is a bit smaller, less complicated and does not require the state to borrow money.

Senate Tax Chairman Rod Skoe, DFL-Clearbrook, said the revised plan released Thursday is only a partial proposal. He said more work is needed before his committee considers it.

“We are committed to doing this” during the current legislative session, Skoe added.

 Too quick work?

Republicans say Democrats have been rushing through major spending bills too fast, not letting them or the public know enough about the bills before committees vote.

Senate Republicans on the public education finance committee were especially upset.

They said they were called to a briefing about the bill on Wednesday night. The briefing included a spreadsheet containing budget basics, but GOP senators said Democrats would not allow them to take the spreadsheets out of the room.

Sen. Gary Dahms, R-Redwood Falls, said his first look at the bill itself was 8:30 a.m. Thursday. The committee approved the bill, with no Republican support, at 10 p.m.

That is not enough time to understand all that is in the bill, Dahms and other Republicans said.

Senate Finance Chairman Dick Cohen, DFL-St. Paul, said that the education finance committee got a three-hour mid-day break (with the full Senate meeting during some of that time) to examine the bill that would spend $15.6 billion in the next two years, the most of any budget area.

The song sounded much the same in the House.

Rep. Denny McNamara, R-Hastings, said information was tough to find in a measure funding environment, natural resources and agriculture programs “in the 46 hours we have had to look at this bill.” Like Senate Republicans, McNamara there were too many unanswered questions by the time the final committee vote came.

Stadium work expected

There appears growing interest in funding a backup plan to fund a new Vikings stadium this legislative session.

House Speaker Paul Thissen, DFL-Minneapolis, said Friday that it would be “prudent” for lawmakers to deal with the funding issue even though he does not think it is mandatory.

The problem arose when electronic pulltabs lawmakers authorized last year produced only a fraction of the state revenue, destined to the stadium, that has been predicted.

Many stadium opponents say it is time to delay stadium work until a better funding source is found. Opponents to that idea say construction planning already is underway, and a delay would cost the state more money.

Some, like stadium bill author Sen. Julie Rosen, R-Fairmont, say e-pulltabs will come around, it just takes time. Others want the Vikings to pay more toward the nearly $1 billion Minneapolis stadium.

Who’s to blame?

Legislative Republicans have unveiled a public relations campaign they call “30 days of wasteful spending.”

The third of 30 planned examples of wasteful spending is $840,000 the state Arts Board used to send artists on “exotic overseas trips” to places such as Bora Bora.

Democrats were all too happy to point out that the program was included in the budget Republican legislative majorities passed two years ago.

House Minority Leader Kurt Daudt, R-Crown, admitted the overseas artist program funding came from a GOP-passed bill, but said lawmakers did not specifically approve the Bora Bora provision. He called it “not the best use of tax dollars” and said legislators might need to do a better job of following how the Arts Board spends its money.

House DFLers set high education funding goals

Posted on by

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.”

April to be for state budget

Posted on by

By Don Davis and Danielle Killey

The Minnesota Legislature is famous for deciding major issues near the end of each year’s session.

Expect 2013 to be no different.

So far, Gov. Mark Dayton has signed just one major bill into law, and eight others, out of 3,172 that the 201 lawmakers have introduced. That means there will be a lot of public and private debate by the Legislature’s constitutionally mandated May 20 adjournment date.

“The budget will be the big push,” said Sen. Tony Lourey, DFL-Kerrick.

The budget, in fact, is the Legislature’s major job in odd-numbered years.

For nearly two dozen years, governors and legislators of different parties were forced to compromise as they worked on two-year budgets. This year, however, Democrats control the House and Senate, joining their fellow party member Dayton.

Those Democrats generally agree on a budget of about $38 billion for the two years beginning July 1, and their overall spending outlines look similar. Legislative committees that begin meeting when they return from an Easter-Passover break today will delve into tax and spend specifics.

“It actually will progress more smoothly,” House Speaker Paul Thissen, DFL-Minneapolis, said of budget work that in the past decade led to a couple of state government shutdowns. “Our focus in April is getting the budget out.”

The budget will be front and center while committees form it and the full House and Senate debate it. Legislative leaders say that in late April or early May, when House and Senate budget bills head to reconciliation in conference committee, contentious gun regulation and gay marriage bills may join other nonspending bills for full debate.

Many do not expect Democrats to show serious budget differences.

“Obviously, they have come to consensus among themselves,” said Sen. Bill Weber, R-Luverne.

Once a tax-and-spend deal is reached among the House, Senate and governor, a budget bill will return for final passage before lawmakers go home May 20 or sooner. Legislative leaders promise they will not need a special session to finish work.

Republicans, while they have little say in what passes this year, will talk a lot about DFL plans to boost taxes.

“I worry about the message we send,” Weber said about the plan to raise income taxes on individuals with at least $150,000 in taxable income and couples earning $250,000 or more.

He said a Minnesota company moving to lower-tax South Dakota is an example of what could happen.

While few bills have become law, the legislative pace thus far has been hectic, said Rep. Tim Faust, DFL-Hinckley.

Like many lawmakers, he said that when he sees full budget plans, he will look for “creating jobs and economic vitality.”

Adding $700 million to schools in the next two years, as legislative Democrats suggest, is one of the best economic development projects the state can offer, Thissen said.

From what Faust has seen so far, “areas like mine will be big winners,” he said about proposed budgets.

For instance, his district has only about 50 people who would be taxed at the higher rate, he said, so that plan would have less impact than in other areas.

Reinstating some version of the homestead property tax credit, as Democrats expect, should help his homeowners’ property tax bills drop, Faust added.

For many, a public works bill funded by the state selling bonds is considered a job producer. Dayton plans to ask for $750 million in bonding, including a large chunk of the $200 million-plus needed to renovate the state Capitol building. Many legislative Democrats are shooting for an $800 bonding bill.

Republican Sen. Dave Thompson of Lakeville said he does not support a sizeable bonding bill this year.

“I personally think we can wait,” he said. “We’ve gotten in a bad habit of doing it every year.”

Typically, lawmakers set the state budget and craft a public works borrowing bill in opposite years of a two-year session.

Thompson said he is open to funding Capitol renovation.

“I’m not focused on a bonding bill right now,” said Rep. Mary Franson, R-Alexandria. “I’m focused on making sure job providers have the tools necessary to succeed.”

Franson said she is concerned about a potential increase in the state’s minimum wage. Most provisions making their way through the Legislature suggest raising the current state minimum wage of $6.15 an hour to more than $9.

“That will hurt greater Minnesota,” she said. “It will be a major problem for the hospitality industry, bars, restaurants.”

Dayton, on the other hand, regularly says that a family deserves to earn enough to remain above the poverty line.

There are differences among Democrats.

House DFLers, for instance, want to put an income tax surcharge on the richest of the rich to be able to quickly repay schools the money the state borrowed from them in recent years. Dayton and Senate Democrats are content to let existing plans go ahead and repay the money over a few more years.

Thissen promised that the surcharge would last no more than two years.

—-

Here is where some issues stand as the Minnesota Legislature enters its home-stretch before a May 20 or earlier adjournment:

Bonding: Gov. Mark Dayton plans to announce his proposal for public works projects soon. He says he will suggest bonding for $750 million, including some for state Capitol renovation.

Border cities: At a recent town hall meeting in Moorhead, the governor said more help is needed to combat lower North Dakota taxes, but he has proposed little change from current local government aids to a few cities near the border.

Budget: the governor, House and Senate Democrats suggest spending about $38 billion in the next two years. The three plans are similar, but House and Senate committees still must produce details.

Capitol renovation: More than $200 million is needed to renovate the state Capitol building. The governor is expected to recommend at least $100 million of that to be in this year’s bonding bill.

Care attendants: In a bill that would allow child care workers to join unions is a lesser-known provision that also would allow those who care for the sick and disabled, including family members, to unionize.

Day care: Bills are moving through House and Senate committees to allow Minnesotans who care for children in their homes to join unions.

Education: Most attention to public schools this year has been to increase funding for the youngest students. Included in the initiatives are plans to fund all-day kindergarten; the governor’s budget plan would not fund every school district, but some legislative proposals would.

Gay marriage: Minnesota voters last November decided not to enshrine a same-sex marriage ban in the state Constitution and in about a month the full House and Senate are expected to vote on a proposal to remove an existing gay-marriage ban from state law.

Gun control: School and other shootings fanned a demand for gun control, but from early this legislative session it was apparent that banning so-called assault weapons and large-capacity ammunition magazine would go nowhere. The debate now is whether to expand background checks for gun buyers. There is widespread agreement that some measures are needed to keep guns away from people who should not have them.

Health care: Minnesota will be among a handful of states that operate a mostly Web-based marketplace where its residents can compare and buy health insurance policies. That is the only major law the governor has signed this year. In their budget plans, House and Senate Democrats call for cutting $150 million from health programs that serve the poor, elderly and disabled.

Higher education: The governor, House and Senate all want to raise spending for state-run colleges and universities, as well as a state student grant program, after years of financial struggles. The University of Minnesota hopes to receive enough funding to freeze tuitions.

Local aid: It always has been the suburbs vs. big cities and rural areas in local aid debates, but this year cities of all sizes and locations have come together on a new formula that would make state aid more predictable and, supporters say, more fair. Some suburbs that now get no state payments would get aid under the plan. Also, there seems to be an agreement among the governor and legislative leaders to increase money available to cities.

Lockouts: Bills are making progress to require companies that have locked out workers in labor disputes, such as one at American Crystal Sugar, to pay unemployment benefits for the duration of the lockout.

Mayo Clinic: The Rochester-based Mayo Clinic, with facilities across much of Minnesota, wants the state to borrow more than $500 million to help its home community improve infrastructure as the health organization undergoes a $3.5 billion expansion. The plan has faced strong bipartisan opposition, but remains alive in committees.

Methadone clinics: Hopes by some to increase regulation on clinics that prescribe the powerful painkiller methadone were dashed when no bills to do that passed by a March committee deadline. However, there still is a chance that a methadone provision could be inserted into a health and human services budget bill.

Minimum wage: Bills are progressing to raise the state’s $6.15 an hour minimum wage large employers must pay to more than $9 an hour. The proposal has the governor’s backing. Many Minnesota employers are governed by the federal $7.25 minimum wage.

Partisanship: Republicans admit they have little say in what happens since Democrats control the governor’s office and both legislative chambers for the first time in more than two decades. Democrats only need GOP votes if they are to pass a public works bill because selling bonds needs a super majority.

Rural Minnesota: House Republicans started the session upset that the speaker and majority leader are from Minneapolis and St. Paul and the person heading the committee dealing with agriculture spending is a strong environmentalist. Rural Democrats, meanwhile, could decide whether issues unpopular in their parts of the state, such as gun control and gay marriage, have a chance of passing.

Sand mining: Bills remain alive to study silica sand mining in southern Minnesota as well as placing a year-long moratorium on the controversial mining and processing plants.

Sex offenders: Measures are being considered to respond to a federal judge who has given Minnesota notice that it must change how it deals with serious sex offenders who have completed their prison terms. Now, many sex offenders are committed to a sex offender center that looks a lot like a prison, but bills offer ways for the offenders to be released to community facilities around the state.

Stadium funding: In a session when major stadium funding was not expected to be an issue, some legislators are not happy that electronic pull tab revenues so far have fallen short of promised made last year when they were picked as a funding source for a new Vikings stadium. But, so far at least, there has been no serious move to change the funding source.

Standard of care: Nurses came into the session hoping for a bill establishing a quota for how many nurses would be on duty at hospitals. After strong hospital opposition, bills dealing with the subject now center on studies of how many nurses are needed.

Sunday booze: Bills to allow Sunday sale of alcohol have gone nowhere, but supporters say a chance remains to insert a provision into other bills.

Taxes: Democrats want to raise more than $2 billion in new taxes in the next two years. It appears they have broad agreement among themselves to raise taxes on the top 2 percent of earners, but the governor’s plan to expand the sales tax to include most services hit a brick wall. House and Senate committees have yet to decide how they would raise taxes.

Wolf hunting: A five-year moratorium on wolf hunting remains in consideration.

House drops most background checks for gun buyers

Posted on by

By Danielle Killey

Gun control backers have given up controversial proposals in an effort to pass some measures aimed at curbing gun violence in Minnesota.

The House Public Safety Committee chairman dropped a plan to expand background checks to virtually all gun sales that was set for a vote Tuesday evening. He said there is a new agreement that will include only checks for purchases at gun shows.

Chairman Michael Paymar of St. Paul said he and fellow Democratic Rep. Debra Hilstrom of Brooklyn Center agreed to kill Paymar’s bill but include background checks for all gun show firearm sales in a new proposal they said will be ready later this week.

“Like any compromise, I think people will be disappointed on both sides,” Paymar said. But “we have an agreement the gun show loophole will be plugged,” which he called “a big step.”

Hilstrom’s plan, backed by the National Rifle Association, also would increase penalties for illegally possessing a firearm or buying weapons for those who cannot have them, known as straw purchases. It would add more to the existing background check system as well.

The lawmakers said the new bill needs to be ready for a committee hearing sometime this week to meet deadlines.

Paymar also lost a provision allowing law enforcement officials to deny gun permits to those who are a danger to themselves or others.

A Senate committee passed a bill last week that included expanded background checks.

Paymar’s original plan to do that drew significant criticism and likely would not have passed his House committee.

“I was prepared to actually lose the bill today,” Paymar said. Republicans and some Democrats on the committee had said they opposed the measure.

Paymar said House Speaker Paul Thissen, DFL-Minneapolis, urged the lawmakers to find some kind of solution.

“This is the best we could do,” Paymar said.

Rep. Tony Cornish, R-Vernon Center, said he still is not satisfied with the apparent compromise announced Tuesday night.

“The only way we can put an end to this thing is to fight it all the way,” he said. He added that the gun show “loophole” is an intentional exclusion from some gun control provisions.

“We need to look at crime control versus gun control,” NRA spokesman Chris Rager said Tuesday.

Opponents have said the background checks and other increased controls threaten Second Amendment rights.

Paymar disagreed.

“I think this is a minor inconvenience for a civilized society,” he said earlier Tuesday.

Rural Democrats have said they would have trouble supporting significant gun control legislation, including background checks.

Paymar said this agreement hopefully will garner more support.

No proposals that remain on the table include the more contentious measures banning assault rifles or high-capacity magazines discussed in Paymar’s committee earlier in the legislative session.

Lawmakers talked over a number of proposals and heard hours of testimony during the first few months of the session before the overall gun control bill was introduced.

The House committee discussed Paymar’s proposal Tuesday morning and planned to return in the evening to further talk about and vote on the bill. Cornish warned that the break was to allow for “bullying” and “twisting arms.”

“They’re desperate to get something passed,” he said of Democrats.

 

DFL House plan would raise taxes on rich for school aid

Posted on by

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.”

House DFL wants tax surcharge

Posted on by

By Don Davis

House Democrats today said they want to not only permanently raise income taxes on wealthy Minnesotans, but also add a temporary surcharge on the richest of the rich to repay schools.

DFL leaders provided no details, but said the surcharge would bring in $854 million needed to repay schools money the state borrowed from them over recent years. House Speaker Paul Thissen, DFL-Minneapolis, 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 Democratic Gov. Mark Dayton unveiled last week. Senate Democrats could release their plan as early as Wednesday.

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, with more than $2.4 billion in higher taxes.

Thissen said House committees will decide specifics about the budget, including what specific taxes would increase and how much. However, he said that Dayton’s proposed increase on the 2 percent of Minnesotans who earn the most is likely to be included, as well as the new surcharge.

Daudt, however, said that would hurt since 92 percent of Minnesota businesses pay their income taxes through personal returns.

Thissen said the biggest difference between the House plan and what Dayton proposes is the House wants to repay the $845 million to schools in the next two years.