A weekly message from your Senator

Dear Constituents and Friends,

Senate Republicans released their budget targets last Friday –  budget priorities lie with tax cuts for corporations, slim investments in education and transportation, and major cuts to other areas – particularly health and human services and the equity investments passed just last year. As the former Vice-Chair of the Health and Human Services Committee and a member of the Transportation Committee, I am concerned about the impact of these cuts to individuals, families, and businesses, particularly when there is a $1.65 billion surplus. 

Budget bills are still being crafted in many committees, but are expected to be passed to the Senate floor soon. Next week’s floor session is expected to be lengthier.

There are exactly two months remaining in the 2017 Legislative Session. I will keep you updated with the latest developments.

Sincerely,

Melisa

Governor Dayton releases his supplemental budget

In 2011, the state faced a $6 billion budget deficit. Minnesota now has $1.6 billion on its bottom line and stable savings to protect our state against future economic downturns. Governor Dayton released his supplemental budget proposal on Friday, March 17. The supplemental proposal builds on the Governor’s previously released budget proposal while protecting the fiscal responsibility of our state’s budget.

In addition to the Governor’s proposed investments, his supplemental budget proposal would keep $200 million in savings, along with Minnesota’s already substantial budget reserve savings of more than $1.5 billion.

Funding for early childhood education received the largest bump. The Governor’s supplemental budget would invest an additional $100 million for expanding voluntary pre-K education. This amount comes in addition to the $75 million previously proposed by the Governor, and would provide pre-K access to 12,900 more four-year-olds across the state. This proposal would be especially helpful in greater Minnesota, where challenges with access to other preschool options, child care, and transportation make voluntary pre-K especially valuable.

Job training was another large item in Governor Dayton’s supplemental budget. The proposal makes an effort to bridge what is commonly referred to as the “skills gap,” a term used to describe the disparity between the skills employers need their employees to have and the skills that current job seekers have already. Pathways to Prosperity, a job skills development program for adults, receives an additional $10 million in Governor Dayton’s supplemental budget.

Minnesota agriculture is also included in Governor Dayton’s supplemental budget. His proposal would invest $1.5 million to establish Farmer-Led Councils in Minnesota to collaboratively address water quality solutions in local watersheds, $1.2 million to plan and prepare for the renewed possibility of avian flu, and $500,000 to help train the next generation of agricultural educators.

Opioid deaths have increased 430% in Minnesota since 2000. Eighty percent of Americans addicted to heroin started out taking prescription pain medications. Governor Dayton’s supplemental budget would hold pharmaceutical companies responsible for their role in the epidemic by increasing the fee on these prescriptions and then investing the $42 million generated to prevent and treat opioid addiction and abuse. Governor Dayton’s budget also includes funding to improve statewide tracking of overdoses in Minnesota so law enforcement and health officials can respond more quickly and effectively.

The Governor’s supplemental budget also protects Minnesota’s fiscal integrity by leaving $200 million for a rainy day. 

Republican budget targets released

The Senate released budget targets this week for each committee within the context of a $1.65 billion surplus. The largest target, $900 million, is dedicated to the Tax Committee. 

Minnesota Health and Human Services would take a significant cut under the Senate budget targets. Their budget would cut $335 million from services for citizens across the state. The magnitude of this spending reduction will not be fully understood until after the committee assembles their budget. It is likely to impact seniors, people with disabilities, and many more vulnerable citizens in our communities. This is in addition to transferring $240 million from the state’s budget reserve for health insurance companies with no guarantees these companies will lower premiums or increase access.  

Minnesota’s spending on environment and natural resources will be cut by $40 million under the target. Outdoor resources, the clean-up of our lakes and rivers, and other clean water initiatives will all be harmed by this spending reduction.

These budget bills are still being assembled but are slated to move rapidly from committees to the Senate Floor by the end of next week. Once the House and Senate pass their bills they will go to conference committees where differences will be worked out. Conference committees are generally when governors have become engaged in the process of constructing omnibus budget and policy bills. 

Republican tax plan

As the majority party in the Senate, Republicans are tasked with developing a state budget proposal to negotiate with the House and Governor before the end of the legislative session in May. Last week, leaders offered a peek into their tax plan for the next two years. Few details were revealed but the overall spending target was – $900 million of the $1.6 billion surplus will be committed to tax proposals. 

At first glance, sending $900 million in tax relief to Minnesotans seems like an agreeable plan. The long-term affordability of these proposals will be important, however. The state’s surplus is similar to an end-of-the-year bonus – it is a one-time check, and the state cannot count on another “bonus” in the next budget cycle. Much of the tax spending being proposed, however, is permanent. Early calculations show that promising this level of tax cuts today would result in more than $1 billion in permanent, ongoing spending in the future. That’s a budget hole that must be addressed if lawmakers are doing their job of responsibly balancing the state budget.

Among the plan's priorities are a reduction in the 5.35% tax rate applied to the lowest tax bracket; freezing the statewide business property tax levy; phasing out taxes on Social Security benefits for the fewer than 50% of households that currently pay taxes on that income; and reducing property taxes for farmers affected by school bond levies.

Several of these proposals have gained bipartisan support in the past, but the details will be important. It’s refreshing to have an opportunity to provide meaningful tax relief, but that relief cannot be supplied at the expense of the state’s budget health. Doing so might provide some taxpayers a short-term gain but risk serious future expenses, since Minnesota families are the ones who pay when the state’s budget comes up short.

Republican transportation plan uses shifts from the General Fund

Senate Republicans revealed a short-term transportation plan this week. The plan does not include any new revenue, despite bipartisan agreement that our transportation system needs more funding to ensure it is safe and efficient.

The plan is silent on transit funding, does nothing to address the exiting transit operating deficit, and cuts operational funding for light rail transit. This bill will likely result in regular route bus service cuts and could kill any future light rail projects.

Provisions in the bill include:

• Shifting a portion of the auto parts and repairs tax revenue so the total amount of general gunds shifted is equivalent to $400 million this biennium and $500 million next biennium
• Removing $32 million in motor vehicle lease sales tax revenue from the general fund and appropriating it to the Highway User Tax Distribution Fund (HUTDF)
• Cancelling light rail transit operating funds, potentially ending the Green Line Extension, Blue Line Extension, and any future light rail projects

This bill does not provide for a dedicated and sustainable transportation funding source, which means any shift can be shifted back during the next economic downturn. The transportation plan is an inadequate proposal that pits parts of Minnesota against each other without meeting our infrastructure needs. (SF 1060)

Minnesota could ban handheld cellphone use while driving

A bipartisan bill was heard this week that would prohibit the use of cellphones while driving except for the use of a hands-free device. The bill also makes it a primary offense, so if a law enforcement officer sees someone breaking this law they can pull the driver over. According to the Minnesota Office of Traffic Safety, each year in Minnesota, distracted or inattentive driving is a factor in one in four crashes, resulting in at least 70 deaths and 350 serious injuries. Bill supporters are hoping to promote safer driving habits and reduce avoidable injuries and deaths.

Minnesota would join 14 other states and the District of Columbia in banning hand-held cellphone use while driving.

Minnesota is already one of 46 states to ban texting while driving. Devices that are exclusively for navigational purposes will be exempt from the hands-free ban as are first responders and someone contacting emergency assistance. (SF 837)