Senate OKs tax cut

By Don Davis

Senators took a day to read a 62-page bill that would cut taxes $432 million, then passed it this afternoon.

After senators approved the bill 58-5, the House planned to take it up later today. That would provide time for Revenue Department workers to make changes so Minnesotans filing income tax returns before the April 15 deadline will not have to amend their returns.

The action came a day after Republican senators delayed debate on the bill, saying they only received the bill an hour before debate was to begin.

Even before the Thursday delay, senators waited two weeks after the House passed its tax bill.

“We took a little bit of time to look at the ramifications so we could make some improvements,” Senate Tax Chairman Rod Skoe, D-Clearbrook, said. “And we did.”

Skoe said one of the major improvements senators made was to increase the Working Family Credit that helps low-income Minnesotans.

The Senate vote came after three-and-a-half hours of debate. Two conservative Republicans and three liberal Democrats opposed it.

Sen. Patricia Torres Ray, D-Minneapolis, said she voted against the bill because she favors more education spending instead of the tax cuts.

More cuts may be coming. “We are not done yet,” Skoe said, adding that he expects a second tax bill.

Skoe argued against deeper tax cuts now, and putting more in the state budget reserve, because the last time the state was in good financial condition then-Gov. Jesse Ventura led the charge to send tax rebate checks to Minnesotans. Soon after that, Skoe said, the state began running into financial problems.

A rush was on to pass the tax bill as soon as possible as the income tax deadline nears.

Revenue Commissioner Myron Frans said that “every day counts” as taxpayers increasingly are filing tax returns.

Frans said that his staff will work through the weekend to update documents to take into account changes in the bill that affect returns now being filed. The Revenue Department also will work with tax preparers and tax software companies to help them make needed changes.

Later today, Frans was expected to give taxpayers guidance about whether they should go ahead and file tax returns or wait until the changes can be implemented. Senate Majority Leader Tom Bakk, D-Cook, said on Thursday that some should wait until next week to file.

The tax bill rewrites some state tax laws to conform to federal law, which would lower thousands of Minnesotans’ income taxes. It also would overturn business sales taxes approved last year, including those placed on farm equipment and other commercial repair work and on some on technology sales, as well as a warehousing tax that was to take effect April 1.

During Friday tax debate, several GOP senators offered amendments to take money from a planned $150 million budget reserve increase to support other tax breaks. All failed.

GOP senators unsuccessfully tried to kill a planned $63 million Senate office building.

Republicans frequently reminded Democrats that they increased taxes more than $2 billion last year, but only want to cut taxes $432 million this year.

“It is not often that we get a second chance to recover once we have jumped off the ledge,” Sen. Paul Gazelka, R-Brainerd, said, adding that many mistakes were made last year when business taxes were increased.

He said he would vote for the bill “in hope that we will do more in the future.”

Taxes for up to 500,000 Minnesotans could fall under the bill. More than $200 million in income tax breaks for individuals would happen because state law would match federal tax law and another $200 million-plus in sales tax reductions would be delivered to businesses.

The bill makes more than 50,000 low-income families eligible for larger benefits under the Working Family Credit designed provide work incentives. More than 280,000 students would qualify for new student loan deductions.

The legislation would provide tax breaks for adoptive parents, homeowners facing foreclosure and teacher classroom expenses. More breaks would be available to investors in greater Minnesota, women-owned and minority-owned businesses.

It also eliminates a gift tax passed last year and easing the burden of the estate tax, both of which made it costly to pass small businesses and farms to the next generation.

The House passed a $503 million tax cut March 6 and Dayton wanted taxes cut $616 million. Another tax bill is expected yet this legislative session, which must end May 19, and it could include deeper cuts.

Senate tax bill holds for a day

Skoe, Bakk (Senate Media Services photo)

By Don Davis

Tax cuts may come to those who wait.

Democrats who control the Minnesota Legislature were fired up and ready to cut taxes Thursday, but Senate Republicans refused to allow a $432 million tax-cut bill come up for a vote, saying they and the public had not had time to read it.

“I think as a senator, I have the right to read the bill,” said Sen. Scott Newman, R-Hutchinson, saying he first saw the bill an hour earlier when the 62-page bill still was hot off the copy machine.

“Folks, they want us to do it and do it right,” Sen. Bill Ingebrigtsen, R-Alexandria, told fellow senators about the desire of Minnesotans that lawmakers know what is in the bill before voting. “We need more than a couple of hours; Minnesotans expect that.”

Both senators and representatives are expected to vote on the bill today.

Revenue Commissioner Myron Frans said his department had been working on making the many changes needed as more and more taxpayers file returns ahead of their April 15 deadline, but that work stopped Thursday when the tax bill stopped.

“Every day matters,” Frans said, adding that he could not give specifics about how the day delay will affect taxpayers.

About 40 percent of Minnesota taxpayers file their income tax returns between April 1 and April 15, and on Thursday, Frans said so many changes in tax laws are contained in the stalled bill that his department, tax preparers and software companies face a mountain of work to keep up.

Minnesotans who already have filed returns may need to amend them if they want new tax cuts contained in the bill.

Senate Majority Leader Tom Bakk, D-Cook, suggested that taxpayers who think they might benefit from the changes should wait until next week to send in their returns. Frans and Gov. Mark Dayton refused to make any such recommendations.

Most cuts in the Senate bill center on two areas:

– Rewriting some state tax laws to conform to federal law, which would lower many Minnesotans’ income taxes.

– Overturning business sales taxes last year’s Legislature approved, including those placed on farm equipment and other commercial repair work, some on technology sales and a warehousing that was to take effect April 1.

House and Senate bills would make more than 50,000 low-income families eligible for larger benefits under the Working Family Credit designed provide work incentives. More than 280,000 students would qualify for new student loan deductions.

The legislation would provide tax breaks for adoptive parents, homeowners facing foreclosure and teacher classroom expenses.

During a hastily called news conference, Dayton thanked Bakk and Senate Tax Chairman Rod Skoe, D-Clearbrook, for trying to pass the tax bill Thursday, which was a day after a deadline the governor had given lawmakers.

Two days earlier, Dayton chastised Democratic Senate leaders for delaying the bill. He said Bakk refused to bring up the tax bill until lawmakers approve a new Senate office building.

On Thursday, Bakk accompanied Dayton to the news conference as they criticized Republicans for delaying the bill.

A two-thirds majority of senators was needed to suspend the rules, and without GOP votes, there were not enough Democrats to begin the tax debate. The vote was 38-28.

“There are provisions in this bill that some of our members have not seen…” Senate Minority Leader David Hann, R-Eden Prairie, said. “We think tomorrow is just fine.”

The Senate is to take up the tax bill when it convenes at 9:30 a.m. today, and if it passes, the House expects to take it up later in the day. House Republicans gave no indication they plan to delay the bill.

The Senate Taxes Committee passed the bill Thursday morning, minutes before the full Senate convened.

Skoe said that the bill balances a desire to trim taxes with the need to increase state budget reserves.

“The state is in the best financial state it has been in since 1999 and I do not want the state to return to the financial uncertainty of the 2000s,” Skoe said.

Skoe also has been part of a Senate effort to increase state budget reserves $150 million to provide a cushion in case there are fiscal problems.

The House passed a $503 million tax cut on March 6 and Democratic Gov. Mark Dayton wanted them cut $616 million. Another tax bill is expected yet this legislative session, which must end May 19, and it could include deeper cuts.

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Key points of a Minnesota Senate tax bill include income and business tax cuts.

– Total net tax cuts: $432 million.

– Change state tax law to match federal law and increase Working Family Tax Credit: $226 million.

– Repeal business tax cuts passed last year: $232 million.

– Repeal gift tax and increase estate tax threshold: $30 million.

Note: Individual tax cut figures do not add up $432 million because bill also includes some minor revenue increases.

Hann

Senate tax bill arrives after Dayton lobs stalling complaint

Dayton

By Don Davis

Minnesota Gov. Mark Dayton on Tuesday used his first public appearance since Feb. 8 to accuse fellow Democrats who lead the Senate of stalling a tax-cut bill until they won approval for a new Senate office building.

An hour and a half later, Senate Majority Leader Tom Bakk of Cook and Tax Chairman Rod Skoe of Clearbrook showed off a tax bill they hope senators pass Thursday, without a building agreement. They denied that Dayton’s comments changed their plans.

Dayton, who has been in a body cast since Feb. 10 hip surgery, walked to a podium aided by crutches Tuesday afternoon and began to rip Bakk for telling him and House Democratic leaders that he would not allow a tax bill to pass until the House rules committee approves a new Senate building.

“I’m very, very, very disappointed they would not pass a bill,” Dayton said.

The House passed a $500 million tax cut March 6. It would stop three sales taxes businesses pay as well as conform to federal tax laws.

Dayton and Revenue Commissioner Myron Frans said that tax cuts needed to be finished by today or Minnesotans would struggle to get tax breaks that come from matching state and federal laws.

Skoe had been saying that senators wanted more time to investigate implications of various tax provisions, and they would wrap up a bill by month’s end.

Democratic and Republicans senators must agree to suspend Senate rules before the Thursday vote will occur.

When Bakk and Skoe sat down with reporters after Dayton’s comments, they began talking about the tax bill, not mentioning Dayton. Bakk did not directly answer the question, asked multiple times, about whether in meeting with Dayton and House Speaker Paul Thissen he linked the tax bill with a new building.

Thissen, D-Minneapolis, agreed with Dayton that Bakk linked the two.

“We have all along urged the House rules committee to act …” Bakk said when asked about the tax-building link. “We don’t understand why the House rules committee hasn’t acted.”

The only action needed before a new Senate office building is constructed is House rules committee approval. However, House members have joined Dayton in expressing reservations about the building.

Bakk said it is needed.

Due to an extensive Capitol renovation project, Bakk said, senators will not have offices or a chamber in which to meet in 2016 if something is not done. Construction will continue at least through 2016.

The renovation is stealing space from the Senate, and doubling what the governor’s office occupies, and there will not be enough room for senators and staff in the finished building, the majority leader said.

Bakk said the Senate will lose 38,000 square feet to renovation.

While representatives have not decided whether a new building is even needed, Dayton said he thinks a modest one should be built. But he was not happy that Bakk linked lower taxes with it.

Dayton said he returned to the Mayo Clinic in Rochester on Monday to have the body cast removed, a week earlier than planned, because he needed to get back to the Capitol to fight for the tax cuts. “It was time for me to come back because of the deadline.”

“I can’t kick any field goals for a while,” he said, but other than using crutches most of the time he is doing well.

He may not be kicking field goals, but he kicked senators’ tactics. “These are DFL legislators, I’m sorry to say. … It’s just inexcusable.”

Dayton said an entire half-hour meeting earlier Tuesday was about the Senate building because the Senate insisted on discussing it before taxes.

“I need to take this to the people of Minnesota,” Dayton said, adding that he plans to start meeting with legislators about taxes today.

Thissen said Bakk wanted to include Senate building approval in the tax bill. Skoe and Bakk said there is no mention of the building in their bill, which they would not give to reporters Tuesday night.

Bakk said that taking up the tax bill by Thursday would be an “extraordinary accomplishment.” A second bill, including some tax cuts, is expected before lawmakers adjourn for the year in May.

The Senate bill will would cut taxes nearly $70 million less than the House, but would add $150 million to the state budget reserve, Skoe said.

Bakk, Skoe

Lawmakers divided on priorities for $1.2 billion state budget surplus

Kalambokidis

By Don Davis

Good economic news looks like it will lead to a few Democratic squabbles over how to spend a budget surplus, with Minnesotans wondering if they will see taxes fall or state spending increase.

“I’m happy to be here to deliver this budget forecast, not the weather forecast,” Commissioner Jim Schowalter of Minnesota Management and Budget said Friday, as snow began to fall in St. Paul.

He announced that the state has a $1.2 billion budget surplus, up $408 million in the past three months.

The news means state leaders must decide what to do with the money: give it back to Minnesotans via tax cuts, increase spending or boost the budget reserve. They likely will do a bit of all three, but Democrats who control the House, Senate and governor’s office do not fully agree on the split.

House Speaker Paul Thissen, D-Minneapolis, and Gov. Mark Dayton put priorities on a $500 million tax cut and spending cash on some public works projects that the state usually borrows money to fund.

Senate Majority Leader Tom Bakk, D-Cook, said it may be too late for some of the House’s $500 million tax-cut bill to help people filing this year. He doubted that software could be upgraded in time to include any state tax changes before April 15.

Bakk and Assistant Majority Leader Katie Sieben, D-Cottage Grove, did not reject tax cuts and higher spending, but indicated their priority is putting more money into the reserve.

The debate over how to use surplus money has not been common in recent years. The $1.2 billion surplus is the biggest projected since February 1999. Since then, the twice-a-year budget forecasts often have shown deficits.

The report shows revenues up $366 million above earlier projections in the budget that ends June 30, 2015. Individual income tax led the way with a $188 million increase, followed by sales taxes up $167 million.

A 0.1 percent spending decrease and lower-than-expected interest rates on bonds sold to finance a new Vikings stadium also helped the financial picture.

Schowalter and State Economist Laura Kalambokidis warned that good times are not guaranteed. For one thing, harsh winter weather could have a more long-lasting impact than predicted.

While many legislative Democrats credit the surplus to a $2.3 billion tax increase and spending changes they passed last year, fellow Democrat Dayton did not. Republicans took credit because of budgets they wrote or heavily influenced in recent years, saying the economy could not turn around in eight months since Democrats’ budget started.

Schowalter and Kalambokidis said there is no evidence that the 2013 tax increase affected the economy.

Kalambokidis said the harsh winter weather influenced the 2014 economy to begin on the soft side, but predicted that it will pick up.

All aspects of the state economy are improving, she said, other than federal government employment and manufacturing.

Dayton singled out figures in the report that showed Minnesota employers added 3,500 jobs a month in 2012 and 3,800 last year.

Schowalter, who favors a bigger budget reserve because it provides a “shock absorber” for the state budget, said the state has about 2.3 percent of its budget set aside now, but financial agencies prefer to see 4.9 percent. He is expected to recommend that to Dayton, who hinted he is unlikely to recommend that big of a reserve.

The governor plans to release his proposal for budget and tax changes next week, a document legislative leaders will use to craft their own proposals.

The Legislature and Dayton approved a $39 billion, two-year budget last year and only need to make minor changes this year.

There is widespread legislative support to spend some of the surplus on nursing homes and other long-term care programs, with a goal of increasing worker pay.

A group pushing for more elderly and disability aid said the forecast bolsters their chances. The 5 Percent Campaign is seeking $80 million to help 92,500 Minnesotans.

“A rate increase for home and community-based services is the major issue that wasn’t addressed in 2013,” bill sponsor Sen. Kent Eken, D-Twin Valley, said Friday. “Today’s forecast tells us we have the resources to address this priority in 2014.”

Other than long-term care spending, Senate Minority Leader David Hann, R-Eden Prairie, said: “We think we need to give it back.”

Budget surplus up to $1.2 billion

By Don Davis

Minnesota’s state budget surplus is growing.

A report released this morning shows the state has a $1.2 billion surplus, $408 million more than predicted in early December. Minnesota Management and Budget reports that revenues are up $366 million from December projections and spending is falling slightly.

A $2.6 billion surplus is predicted for 2016-2017.

The report opens the door to increased spending requests, deeper tax cuts and, perhaps, adding more to the state budget reserve during the legislative session that began Tuesday.

Details of the budget forecast, including predictions about the state’s economy, were to be released later today.

A similar December budget and economy report, known as a budget forecast, showed the state with about a $1 billion surplus, which shrunk to $825 million after the state repaid schools money it had borrowed from them in recent years.

The forecast is important because it shows Gov. Mark Dayton and legislators how much money they have available this year.

In the third day of the legislative session, Thursday, the House Taxes Committee approved a bill sending $500 million back to businesses and middle-class Minnesotans, eating up a good portion of the surplus they thought they had at the time.

Before the forecast was released, Senate Majority Leader Tom Bakk, D-Cook, said he would wait to make decisions about spending, taxing and whether to add to the state’s budget reserve until after the forecast. Bakk said he remembers the days during Gov. Jesse Ventura’s administration when the state sent rebate checks to the public, with the state soon running into economic problems and running low on money.

Senators are not up for election this year, but all House districts are elected every two years and leaders of that chamber are eager to show their willingness to cut taxes this year after last year raising them more than $2 billion.

The Legislature and Dayton approved a $38 billion, two-year budget last year and only need to make minor changes this year.

Dayton planned to wait until after the forecast to announce plans to tweak the existing budget.

The governor and legislative leaders warn groups against asking for money this year, saying that even with a surplus the state cannot afford expanding the budget. However, groups ranging from those supporting expanding high-speed Internet service to those behind better long-term care are asking for money. Most groups say that funds could come from the surplus.

House Speaker Paul Thissen, D-Minneapolis, said before the forecast that he cannot support proposed transportation tax increases made by fellow Democrats. However, he added, funds could come from surplus money.

Bakk floated a plan to use surplus funds to increase spending on public works projects. He said, for instance, that the $100 million-plus needed to finish the state Capitol renovation project could come from cash, opening the regular public works funding bill for more projects.

Dayton considers adding cash to public works bill

By Don Davis

Using Minnesota’s budget surplus to expand the number of public works projects, ranging from repairing the Capitol to updating college buildings, is being considered, Gov. Mark Dayton said Tuesday as the Legislature began its 2014 session.

Dayton said he received $3 billion in requests for public works projects, normally funded by the state borrowing money by selling bonds. He proposed a nearly $1 billion bonding list, but legislative leaders last week agreed that $840 million is more likely to pass.

Senate Majority Leader Tom Bakk, D-Cook, suggested at a Forum News Service-sponsored forum that items such as a state Capitol renovation project and repairing state highways could be funded by cash from what last December was declared a $1 billion budget surplus.

On Tuesday, Dayton said that adding to public works funding is one of three ways he could propose using $400 million surplus money. The other $600 million would go to tax cuts, which in state bookkeeping is figured as spending.

The other two options Dayton gave for the money are adding to the state budget reserves and putting cash into a Corridors of Progress program to help the state transportation system.

However, Dayton said, he will wait until after Friday’s update about the state budget before deciding how he would use the surplus.

A surplus following budget deficits like Minnesota has experienced is like giving a starving man a hot dog, Dayton said, and then putting a steak on a plate in front of him. “All of a sudden he is not interested in the hot dog.”

But, the governor said, Minnesota groups need to understand the state cannot increase on-going spending to the extent some would like even with a surplus.

Dayton spoke to reporters from his official state residence via telephone because a recent hip surgery left him in a body cast and unable to work at the Capitol.

“I would like to get back there,” Dayton said. “My recovery is going well. I have no pain in my hip.”

The governor said he is busy meeting with legislative leaders and officials of his administration while he is stuck at home.

He said that he will return “in a couple of weeks” for tests at Mayo Clinic in Rochester and expects to find then how much longer he will be homebound.

He hopes soon after that  “I can get some pants on and go to the Capitol.”

Session to be short but full

Legislative leaders

By Don Davis

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

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

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

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

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

They will not have much time.

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

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

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

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

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

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

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

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

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

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

Supporters say thousands would see a pay increase.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 —-

Key Minnesota Legislature dates

Tuesday: Annual session begins at noon.

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

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

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

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

April 11-21: Easter-Passover break.

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

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

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

Dayton works at home after surgery

By Don Davis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Judge tells Legislature to act on sex offender treatment program

By Don Davis

A federal judge is putting pressure on the Minnesota Legislature to change how the state deals with some sex offenders.

Thursday, five days before the Minnesota Legislature is to convene for its 2014 session, Judge Donovan Frank wrote in a ruling that state lawmakers need to take action now.

His comments came in a ruling in which he refused to dismiss a lawsuit by patients of the Minnesota Sex Offender Program that claims they are being held unconstitutionally.

Frank also ordered experts to interview each of the program’s nearly 700 patients, in state hospitals in St. Peter and Moose Lake. He said he needs those experts’ opinions before he can rule in the case.

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

He added: “The time for legislative action is now.”

County prosecutors can ask judges to send what they deem as the most serious sex offenders to the state hospitals after they complete prison terms. The patients claim in their lawsuit that that amounts to continued imprisonment without being sentenced, which violates the federal Constitution.

The patients are held in prison-like confinement and only two have been released.

Frank’s comments came 24 hours after Minnesota Senate Majority Leader Tom Bakk, D-Cook, said that it was possible that Frank would rule before lawmakers return to session. That would put pressure on legislators to take action to avoid federal takeover of the state program, which could end up being far more expensive than if the state maintains control.

In a Wednesday pre-session meeting with reporters, legislative leaders agreed that any solution to the problem needs to be bipartisan, but they could offer no path for the program to take.

House Speaker Paul Thissen, D-Minneapolis, said he hopes that a bipartisan group of lawmakers meeting on the subject can find the answer.

Senate Minority Leader David Hann, R-Eden Prairie, agreed that both parties must be part of the solution, and legislators should not wait for Frank to take over the program.

In Frank’s Thursday ruling, he brought up the possibility that patients could be released.

Hann said Minnesota has one of the largest and most expensive sex offender populations in the country.

Senators last year passed a bill to begin a response to the lawsuit, but it never became law.

Legislators have been looking into how to allow sex offenders to receive medical and mental treatment and eventually be able to be released. At the same time, legislators say the public must be protected.

The issue has been a major one in Minnesota since University of North Dakota student Dru Sjodin was kidnapped from a Grand Forks, N.D., mall on Nov. 22, 2003. Months later her body was found near near Crookston, Minn. A convicted sex offender who had served his prison time was convicted of her kidnapping and murder.

The man convicted of the crime, Alfonso Rodriguez Jr., had been released from prison, but not committed to the sex offender treatment program.

Even before Sjodin’s body was found, Minnesota leaders began efforts to keep sex offenders locked up as long as possible. That meant a huge increase in the number of sex offenders judges sent to the treatment program.

Frank ordered the state to look at less restrict ways to hold sex offender patients. However, protests arose when Human Services Commissioner Lucinda Jesson announced a plan to put some offenders in less restrictive facilities and Gov. Mark Dayton quickly put a stop to the plan late last year.

The judge wrote that he is sending experts to interview patients to help determine the validity of their claims that they are being held for punishment, not treatment. He said that if the prisoners are right, they are being held unconstitutionally.

Experts are needed to talk to patients and staff, and to examine other parts of the program, Frank wrote.

State to consider oil disaster aid

Leaders meet the media

By Danielle Killey

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Senate, ex-staffer settle suit

By Don Davis

A longtime Republican activist agreed Thursday to drop a lawsuit claiming gender discrimination against the Minnesota Senate.

Former Senate GOP spokesman Michael Brodkorb will get $30,000 in severance pay in the deal, which already cost state taxpayers more than $300,000 in legal fees. He was fired after senators discovered he and then-Senate Majority Leader Amy Koch, R-Buffalo, were having an affair.

Brodkorb said he was happy to end the suit because he “got my life back,” and Senate leaders said they were pleased to end the messy case.

“This agreement permanently dismisses Mr. Brodkorb’s claims in their entirety while providing the limited severance pay that was offered to him before he commenced litigation against the Senate,” said Senate Majority Leader Tom Bakk, DFL-Cook.

Brodkorb sued the Senate because, he said, female employees had not lost their jobs when they had affairs with male senators.

Bakk and Senate Minority Leader David Hann, R-Eden Prairie, said the agreement with Brodkorb includes provisions that:

– Brodkorb acknowledges the sex discrimination lawsuit would not survive in court.

– No more claims against the state will be entered by Brodkorb.

– The Senate will not pay Brodkorb legal fees.

The Senate Rules and Administration Committee must approve the agreement.

“We have said all along that the Senate acted appropriately in this matter,” Hann said.

Brodkorb’s attorneys have been interviewing senators and others believed to have been involved in past affairs. Brodkorb said he has a long list of such affairs.

Brodkorb ran a partisan Republican blog before he was hired as Senate Republican spokesman. When Republicans took control of the Senate in 2011, he became one of Koch’s top aides.

In the fall of 2011, word began to spread among Senate employees about the affair. In December of that year, some senators confronted Koch about the issue. Within a couple of days she resigned her leadership position and some Republican senators told reporters about the affair, without naming Brodkorb.

It did not take long for news stories to mention Brodkorb, and he followed with his lawsuit.

Brodkorb had sought more than $500,000.

Lawmakers taking last look at proposed disaster relief bill

By Don Davis

Key Minnesota lawmakers looked over a proposed disaster-relief bill Thursday night, facing a Friday deadline if a special legislative session is to be called for Monday.

The bill, as proposed, would send $4.5 million to 18 counties affected by June 20-26 storms and floods and free about $219,000 for governments in Rock and Nobles counties still recovering from an April ice storm.

The ice storm funding was the most Gov. Mark Dayton could get, after last week promising that he would insist on giving the two counties $1 million.

“The governor has been a strong, strong advocate for providing that funding,” Dayton spokesman Matt Swenson said. “But in his conversation with legislative leaders and legislative membership, he just can’t find support for it. There seems to be strong bipartisan opposition. … He said he has tried to be as persuasive as he possibly can.”

Swenson said that $219,000 in grants available to Nobles and Rock counties and the city of Worthington are in the bill in part because of Dayton’s efforts.

The special disaster-relief session was not officially set as of early Thursday evening.

Friday is the deadline Dayton gave four legislative leaders to agree to specific details in a disaster-relief bill. If they agree today, Dayton said, he will sign an order calling lawmakers into special session on Monday.

“At this point, it hasn’t been agreed to by all five leaders,” Swenson said late Thursday afternoon.

No public opposition had surfaced to the two parts of the bill:

– $4.5 million to help 18 counties recover from June 20-26 floods.

– Giving Rock and Nobles counties $219,00 in grants, an amount the southwest Minnesota communities have not been able to collect after legislators approved providing them $250,000 earlier this year.

Swenson said that legislative leaders are reviewing bill language, but he did not know if an in-person meeting is needed before Dayton calls a special session. No meetings are scheduled among the governor and legislative leaders.

A week ago, Dayton said that he would insist that $1 million be appropriated to Nobles and Rock counties for ice storm recovery. But minutes later Senate Majority Leader Tom Bakk, DFL-Cook, said he would not allow that money to be sent to southwestern Minnesota because other disaster-relief efforts, such as one in his northeastern Minnesota area a year ago, did not get that kind of aid.

If the special session is called, House and Senate committees will meet after the session begins at 10 a.m. Monday, followed by the full chambers debating the issue. It is to last no longer than until 7 a.m. Tuesday and no other issues will be allowed to come up.

The $4.5 million is for 18 counties, going along with more than $13 million of federal money already promised. State money would come from funds not spent last year after northern Minnesota floods and wind storms.

The counties to get part of the $4.5 million are Benton, Big Stone, Douglas, Faribault, Fillmore, Freeborn, Grant, Hennepin, Houston, McLeod, Morrison, Pope, Sibley, Stearns, Stevens, Swift, Traverse and Wilkin counties.

The April ice storm caused an estimated $26 million damage in five southwestern Minnesota counties. The Legislature in May approved $1.5 million in aid to match federal recovery funds, with another $250,000 for other aid.

Local governments report having difficulty getting most of the $250,000, prompting the new plan to issue the remaining money as grants.

Much of the April damage was to private utilities, which under current law cannot receive state help.