In Like A Lion…

In just a little more than a month into the legislative session, the legislature has overridden Gov. Tim Pawlenty’s veto on a transportation funding package, passed the omnibus tax and capital investment bills, and debated a number of controversial bills on the Senate and House floors. While some speculate the fast pace of the session is due to members’ goals of adjourning early to hit the campaign trail, others feel the legislature is allowing time for possible vetoes from the Governor. Whatever the reason, nearly everyone would agree that the legislature is moving faster than ever, and the tensions and frustration of the looming deadlines are beginning to take their toll on legislators and lobbyists.

This week, the Senate and House finished their work on Wednesday before adjourning for a short, and much needed, Easter break. They will return on Tuesday with a full agenda ahead of them. Next Friday, March 28, is the last deadline. This deadline is for committees to act favorably on appropriation and finance bills. Any bill heard after the last deadline must be referred to the Senate Committee on Rules and Administration or the House Committee on Rules and Legislative Administration for approval. With only 27 legislative days left, committees will likely be meeting well into the evenings to accomplish all their work.

Pawlenty’s Budget Plan Addresses Looming Deficit

On March 7, Gov. Tim Pawlenty announced his much-anticipated budget plan to deal with the state’s approximately $1 billion deficit. After taking off the table tax increases, cuts to local government aid and reductions in K-12 spending, Pawlenty zeroed in on spending in state agencies and social services. His proposal would use $250 million of the $653 million in budget reserves; draw $250 million from the surplus in the Health Care Access fund, which is used to fund health care programs and expand eligibility for low-income residents; and reduce growth in state spending by $341 million. Pawlenty would also cut the statewide sales tax by 1/8 percent and reduce state agency budgets by 4%. The Departments of Veterans Affairs, Military Affairs and Transportation would be exempt from operating cuts.

DFL leadership applauded Pawlenty’s “first volley at looking at the deficit.” House Majority Leader Tony Sertich (DFL-Chisholm) said that while the devil will be in the details, he is glad Pawlenty is finally on board with closing corporate loopholes. Senate Assistant Majority Leader Tarryl Clark (DFL-St. Cloud) was concerned about the possible unintended consequences of Pawlenty’s plan and making sure we still have a strong foundation for the future. She also felt using the Health Care Access Fund was a step backward in their efforts for health care reform and was not an honest budget. “The real reform that needs to be done in health care that his own task force are recommending, he is taking and pulling the rug out from under that, it seems,” said Sertich. “A lot of his proposals don’t make it past the press release, and he doesn’t invest a lot of capital in making that happen past the press release.” Sertich also said that committees will spend the next week looking at the new numbers and the possible impacts on their budgets.

With a difference in spending priorities and targets, finding a compromise between DFL leaders and the Governor will likely be a long and contentious struggle. The Minnesota Constitution requires a balanced budget by the end of each biennium.

To watch the Governor’s press conference and the DFL response, go to http://www.house.leg.state.mn.us/hinfo/sessiondaily.asp?yearid=2008&storyid=1284

Omnibus Tax Bill—Take Two

Last year, Gov. Tim Pawlenty vetoed the omnibus tax bill due to a few controversial provisions that included aid for the Mall of America expansion, the inclusion of inflation in budget forecasts, tighter provisions governing foreign operating corporations, most local options sales tax requests, and additional local government aid. Earlier this month, the legislature debated and passed a new version of last year’s tax bill with the controversial provisions removed. The Senate passed the bill, H.F. 3201, on a vote of 63-2 before sending it to the House, where it was approved 132-1.

The bill also contained tax conformity language needed to match federal tax law by the April 15 tax deadline. In addition, the bill includes property tax breaks for disabled military veterans and an income tax exemption on military pay for National Guard and Reserves troops. A number of other amendments were offered, extending the debate in the Senate to more than three hours. Among those offered, but not adopted, was an amendment freezing property taxes for two years on second homes and cabins and providing a property tax cap for seniors.

Tax Committee Chairs Sen. Tom Bakk (DFL-Cook) and Rep. Ann Lenczewski (DFL-Bloomington) said the sooner the tax bill gets done the better for Minnesotans still waiting to file their taxes. Gov. Pawlenty signed the bill into law on March 7, 2008. A second tax bill will be unveiled later this session.

To read more about the tax bill, go to http://www.startribune.com/politics/state/16347756.html  

Bonding Bill

On March 4, the Senate passed a capital investment bill that totaled more than $1 billion. S.F. 3295 includes $134 million for the University of Minnesota, $70 million for the Central Corridor, $40 million for the Duluth Entertainment Convention Center (DECC), and $30 million for Itasca County for expansion of the Minnesota Steel plant. Sen. Keith Langseth (DFL-Glydon), Capital Investment Committee Chair, emphasized the job growth and economic stimulus the bill would provide. “It helps to turn around the economy to have these people working. It’s the best time to be selling these bonds and constructing these projects,” said Langseth. Despite the fact the bill spends $100 million more than the Governor’s recommended target, it passed the Senate on a vote of 51-7.

The House also debated its bonding bill and after more than four hours of floor debate, during which members expressed their concerns over the budget and spending priorities, the bill passed 99-34. H.F. 3480 contains similar funding provisions to the Senate bill, including: $136 million for the University of Minnesota, $280 million for the Minnesota State Colleges and Universities system, $70 million for the Central Corridor, $38 million for the DECC project, and $28 million for the Minnesota Steel plant.

A conference committee has been appointed to reconcile the differences between the Senate and House bills. House Capital Investment Chair Rep. Alice Hausman (DFL-Saint Paul) said she hoped they would have a compromise bill on the Governor’s desk by the end of last week; however, a compromise bill has yet to be seen. To receive the Governor’s approval, the bill will have to meet the Governor’s target of $825 million or less.

For more information on the capital investment bill, go to http://www.startribune.com/politics/state/16219097.html

Important Dates

March 19-25 Easter Break

March 28 Third Policy Deadline