A weekly message from your Senator

Dear Constituents and Friends,

Senators and staff put in overtime this week as budget bills were hurried through the final finance committee deadline of Friday, March 31. More than six major budget bills were wrapped up and voted on. 

The judiciary and higher education budget bills were heard on the Senate floor on Tuesday this week. Both bills, particularly the higher education bill, fall short adequately funding core academic programs to maintain educational quality at campuses across the state. On Wednesday, the full Senate voted on three major budget bills: Jobs, State Government, and Environment. An amendment that passed with bipartisan support was included that works to protect Minnesotans’ online privacy rights. It was a timely amendment in reaction to Congress repealing online privacy rights and allowing Americans’ information to be sold to the highest bidder. Debate on the environment bill, which I could not vote for, puts Minnesota’s water quality in jeopardy by exempting hundreds of thousands of acres of land from the state’s buffer law. 

We debated a fresh batch of budget bills on Thursday and re-addressed REAL ID. Minnesotans concerned about their ability to board an airplane next year can rest easy; the REAL ID bill passed with bipartisan support. The House and Senate agreement on reinsurance – a bill that spends $543 million to temporarily “fix” the health insurance individual market – was also passed. I was not able to support this bill as I view it as an expensive one-time fix that doesn’t guarantee lower health insurance premiums.

Finally, we also voted on the transportation bill. Another bill that I could not support as the money to fund this bill is shifted from the general fund and completely left out transit, which could stall any transit projects currently in the works and prevent any future light rail projects. It could also mean significant cuts to existing bus line routes, leaving countless Minnesotans without a reliable method of transportation. 

Next week we take up the Health and Human Services and Tax bills before we take our Spring/Passover break. Stay tuned for more updates next week.

Sincerely,

Melisa

Senate’s education budget for Minnesota schools

The bill will provide funding for the Basic Formula Allowance, which provides the majority of the education funding for schools; however, the amount appropriated does not keep pace with inflation, meaning schools will still be faced with potential budget cuts over the coming two years. The bill provides no new funding for voluntary PreK programs, special education, and school support service staff, such as counselors and nurses. The bill provides funding for some of the state’s children’s museums, parent-child home visiting grants and agricultural education grants. It also provides funding to increase teachers of color in Minnesota classrooms.

Funding for a water conservation program in Minnesota schools is eliminated and funding for the state’s American Indian tribal schools is also cut. Appropriations for mentoring partnerships, full service community schools, and Girls in Action are eliminated for the coming two-year budget period. The bill does contain an overhaul of the state’s teacher licensure system but it contains provisions that do not ensure that Minnesota’s students will have a highly-trained teachers providing quality instruction in every school classroom. (SF 718)

Senate higher education bill for U of M, MnState students

The Higher Education budget bill provides $100 million to state schools, which is $218 million below the Governor’s proposal and far below what officials at the U of M and MnState had requested to maintain educational quality at campuses and help keep tuition low. The bill also funds state higher education grants to students, providing $52 million less than the Governor’s recommendation.

In contrast, the Governor’s budget recommendation would have provided $96 million for the U of M and $150 million for MnState. The governor also recommended adding provisions to address campus sexual violence, homelessness, and the state’s teacher shortage. Funding was also recommended to address aging technology infrastructure for both systems. 

Although the bill does contain language for a tuition freeze at MnState, it does not provide enough funding to alleviate potential cuts to critical programs or quality professors.

Senate approves controversial environmental bill

Widely opposed by environmental organizations and strongly criticized by affected state agency commissioners, the bill makes dozens of changes to Minnesota’s environmental regulations that critics say will limit citizens’ voices, force procedural requirements that slow down environmental permitting, politicize the science around environmental protection, cut funds for state parks, trails, and other outdoor amenities during a time of budget surplus, and more.

One section of the bill goes after a signature priority for Governor Dayton: buffer protections to clean up Minnesota’s waters. It exempts about 200,000 acres from water quality and habitat benefits and fails to provide basic buffer implementation funding to local governments.

Other measures include: 

• Suspending water quality standards for two years, so the Minnesota Pollution Control Agency will not be able to issue permits for wastewater treatment plants until 2019 – potentially leaving cities exposed to third-party lawsuits.
• Prohibiting local governments from banning or charging a fee on plastic bags, eroding local control and overriding the will of local residents.
• Setting a “one-size-fits-all” requirement for the Department of Natural Resources and Minnesota Pollution Control Agency to issue permits within 150 days, a mandate that fails to recognize that some projects are located in sensitive areas or are too big or complex to be permitted within this time frame.
• New feedlot language that paves the way for more and bigger feedlots. It essentially doubles the size the largest feedlots can be before environmental review is required.

(SF 723)

Reinsurance Conference Committee Report sent to Governor Dayton

The Reinsurance Conference Committee Report narrowly passed the Senate on a vote of 35-32 and will now be sent to the Governor for his approval or veto. The conference committee report spends nearly $543 million over two years on a proposal intended to stabilize Minnesota’s individual health insurance market. Rather than making real changes to lower costs for people who buy their insurance on the individual market, this bill gives away hundreds of millions of dollars to insurance companies with no guarantee that premiums will be lower as a result.

With the implementation of the Affordable Care Act and guaranteed coverage to individuals regardless of their medical history, MCHA, the state’s former high-risk health insurance pool, was phased out in 2014 and over 25,000 members of the program entered Minnesota’s individual market. Reinsurance has the same goal as the MCHA program to remove high-cost, high-risk enrollees from the individual market to keep rates low for the remaining individual market enrollees. The major difference with a reinsurance program is that high-cost enrollees remain in the individual market, with a portion of their high-cost claims covered by the reinsurance program. 

Under the conference committee report, for the 2018 insurance year when an enrollee reaches $50,000 in insurance claims, 80% of claims would be paid by the Minnesota Premium Security Plan until those claims hit $250,000. Health insurance companies would cover all claims up to $50,000, 20% of claims from $50,000 to $250,000, and all claims over $250,000. After 2018, the MCHA board sets the payment parameters with an attachment point of at least $50,000, a coinsurance rate between 50% and 80%, and a reinsurance cap of $250,000 or less.

Minnesotans need health insurance reforms that will offer the state long-term stability. This is another “fix” which costs $543 million and only provides temporary relief for two years. While the goal of the legislation is well-intentioned, this proposal takes over $400 million in funding from the Health Care Access Fund (HCAF), a fund intended to be spent on health care for low income Minnesotans, to help insurance companies. Under the bill, insurance companies get paid for high cost claims, but there is no assurance from insurance companies that they will make their rates more affordable or expand their provider networks across the state. 

The state must have something in law by the end of the month of March to be meaningful and have an effect on the 2018 insurance market. Health plans are making decisions about whether or not to stay in the market now, and initial health insurance rate filings are submitted to the Department of Commerce in just a few weeks. (HF 5)

Jobs, commerce, and energy budgets

The jobs bill was amended into the commerce and energy finance bills in committee this week. The combined proposal passed the Senate floor and will meet up with the House proposal in conference committee. Below are highlights from each category:

JOBS highlights: $10 million target

The jobs bill cuts programs, leans heavily on the Workforce Development Fund (WDF) to fund projects, and shifts programs from the general fund to the WDF. In total, this proposal cuts or shifts $26 million to fund the chair’s budget priorities, including:

• The bill cuts equity competitive grants by $7 million in the biennium, eliminates direct equity appropriations in the tails, and repurposes money for competitive grants;
• Increases appropriation for MIF and the Job Creation Fund and appropriates a $4 million line item for Digi-key; and
• $20 million for Broadband in the biennium. 
  
  

Notably, the bill does not include $7 million needed for vocational rehabilitation, cuts funding from the Film and TV Board, and eliminates money for the Host Community Program. 

State government bill passes Senate

The State Government Bill narrowly passed and includes drastic reductions to government services that will mean fewer staff, longer wait times, and higher long-term costs. The proposal cuts most agencies by 7.5% despite additional requests for investments in cybersecurity, tax services, and auditing capacity. With the state benefiting from a $1.6 billion surplus, the state budget should be supporting the services that make government effective and accountable to taxpayers, not arbitrarily cutting agency budgets.

The Department of Revenue estimates the staff and funding cuts in this bill will lead to longer tax-return wait times and fewer auditing services, which will cost the state up to $35 million in uncollected revenue.

The bill invests $2 million in cybersecurity while the state’s IT experts have expressed a need for over $26 million to protect Minnesotans’ personal and financial information. 

(SF 605)

Judiciary bill passes the Senate

The Omnibus Judiciary and Public Safety bill passed the Senate floor with strong bipartisan support this week. The bill has a $59 million target, which is significantly less than the Governor’s proposal of $265 million, and the House’s target of about $112 million. The bill is mostly base funding, but it does include some recommendations made by the Governor. 

The Legislature currently has a $1.65 billion surplus and a $59 million target is disappointing. The small target will have a negative impact on the departments like the Departments of Public Safety, Corrections, and our courts systems. Many of the department requests funded mandates placed on them by the state or federal government, or helped it meet national standards, but this bill does not address these issues. 

Despite the low budget target, there were some good things covered in the bill. The bill made investments into reimbursements for bomb squad units, which will go to the local departments to ensure their squads are prepared for the next emergency. There was also an investment into increasing funding for our Violent Crime Enforcement Taskforces which coordinate drug and gang investigations around the state. Lastly, the bill provides funding to ensure our probation officers are funded and can ensure people are making smooth transitions back into society. (SF 803)

Senate transportation budget 

The Transportation Bill that passed the Senate this week provides temporary solutions to the state’s long-term transportation problems. 

The bill spends more than $1.3 billion over two years, but there is no new revenue in this bill. Instead, this bill shifts $400 million over the biennium from the state’s general fund from auto-related sales taxes and borrows $325 million in bonding. 

While the shift from the general fund can be considered “new money” for Minnesota’s transportation system, it costs the general fund $200 million per year – money currently used to pay for property tax relief, childhood education, veterans’ services, and care for the elderly.

In addition, $117 million per year for state roads sounds like a lot of money. But compared to the more than $250 million Minnesota needs just to keep up with basic maintenance needs on the state highway system, it means potholes, aging bridges, and too few snowplow drivers will be the reality.

This transportation plan does not include money for transit anywhere in Minnesota. Transit is an integral part of our success as a state. Workers, students, and families use transit to get to work, school, and doctors’ offices. We need to fund transportation and transit for our state to grow and attract workers and help older Minnesotans age in place.

(SF 1060)

REAL ID closer to reality

The Minnesota Senate passed a neutral REAL ID bill this week that would allow Minnesotans to board flights and visit their loved ones on military bases without unrelated and controversial language that stymied the bill earlier this session. 

An earlier version of the REAL ID bill failed to pass the Senate with a strong bipartisan vote against it. DFL Senators have been asking for a neutral REAL ID bill since the first compliance bill passed in 2016. 

The Senate finally compromised and the controversial and unnecessary rulemaking language was removed. The bill is now neutral and has bipartisan support. If passed into law, the legislation will bring Minnesota into federal compliance with REAL ID requirements.

After more than a decade of back and forth with the federal government and years of fighting at the Legislature, lawmakers got together not as Democrats and Republicans, but as Minnesotans who understood we had to compromise to pass this important bill. The bipartisan bill we passed is about compliance and does not include unnecessary and controversial language the previous bill contained. (SF 166)