The 2014 legislative session kicked off this week with a lot of fast paced activity. The House and Senate each moved quickly to pass emergency legislation totaling $20 million in heating assistance for low income Minnesotans. Throughout the week, committees held hearings that took public testimony and approved key legislation that leadership has prioritized for early passage in the session.

Economic Forecast

Minnesota Management and Budget released positive economic news for the State Budget today. MMB Commissioner Jim Schowalter said that the state economy "continues to steam along" as the economic forecast estimated a budget surplus of $1.23 billion, which is up $408 million from three months ago. The change is due to a $366 million revenue increase in income and sales tax receipts and a $48 million decrease in projected spending.

The state's unemployment rate is one of the lowest in the country at 4.6 percent as it created almost 46,000 jobs in the past year. The outlook for the 2016-17 biennium also shows encouraging signs as the forecast estimates a structural balance of $2.6 billion.

With the release of the economic forecast, there is sure to be many different proposals from legislators and special interest groups who will be advocating for legislation since there is more than a billion dollar surplus. Majority Senate Leader Tom Bakk (DFL-Cook) has indicated that he would like to focus on building budget reserves while House Speaker Paul Thissen (DFL-Minneapolis) is leading to pass a tax cut package and is open to spending available cash on capital projects in the bonding bill. Governor Dayton is going to release a supplemental budget soon that will indicate what his preference is in dealing with surplus dollars. 


Due to the positive economic forecast, key decisions are currently being made on how to best utilize the $1.23 billion projected surplus. The House Tax Committee held two hearings this week in which they heard public testimony on 26 bills that included federal tax conformity and the repeal of three business to business sales taxes that were passed last session.

As a result of that hearing, a tax cut package was released that totaled nearly $500 million in tax relief. HF1777, authored by Representative Ann Lenczewski (DFL-Bloomington), was amended as a vehicle bill to include federal conformity along with the repeal of the farm equipment repair tax, the warehousing tax and the telecommunications tax. The bill passed the Tax Committee and is expected to be heard in the Ways and Means Committee on Monday and on the House Floor for passage on Thursday of next week.

The Senate Tax Reform Division also heard testimony on similar tax repeal legislation in a hearing on Thursday. They have not yet put together a formal package that could be reviewed in a full Tax Committee hearing. It is expected that quick movement will occur next week in both legislative bodies in order to place a bill on the Governor's desk as he has indicated that he would like to sign a bill by March 14 in order to eliminate confusion for tax preparers and filers.

Minimum Wage

An increase in the state's minimum wage was close to final passage last year but leaders were unable to reach a compromise as the clock ran out on the legislative session. This year, leaders in the House and the Senate have made this a top priority. A conference committee has already been appointed for HF92/ SF3, which is authored by Representative Ryan Winkler (DFL-Golden Valley) and Senator Chris Eaton (DFL-Brooklyn Center). The committee met on Thursday and Friday to hear testimony on increasing the state's minimum wage from the current $6.15 per hour to $9.50 by 2015. The committee has two hearings scheduled next week on Monday and Tuesday where they will continue to work out the differences between the House and Senate bills.