This week at the Capitol, the House and Senate held long floor sessions where they passed multiple omnibus budget bills. With a few weeks left in the legislative session, the focus will turn to conference committees where the final budget details will be worked out before final passage. There will be significant discussions among the Governor, House and Senate concerning the major differences between the high profile tax proposals.

Tax Legislation

On Wednesday, the House held nine hours of debate on the omnibus tax bill authored by Rep. Ann Lenczewski (DFL-Bloomington). The $2.6 billion plan seeks to raise $1.5 billion in new revenue by creating a fourth-tier of income tax rates at 8.49, enact a temporary 4 percent surcharge on taxable income over $500,000, eliminate $310 million in corporate credits and deductions, and increase user fees by $780 million for alcohol and tobacco purchases. The DFL wants to use the revenue to pay for a property tax relief package, increase local government aid payments, increase education funding, pay back $850 million owed to the school shift and eliminate the projected $627 million state budget deficit. The bill passed on a vote of 69-64, with all of the Republicans and four DFL members voting against it. The bill now moves to the Senate where Sen. Rod Skoe (DFL-Clearbrook) is the sponsor.

The Senate Tax Committee passed the omnibus tax bill which included revenue increases totaling nearly $1.9 billion. SF552, authored by Sen. Skoe, has many differences from the House bill. The Senate version seeks to generate $1.1 billion in raising the state's top income bracket from 7.9 percent to 9.4 percent, which would affect the taxable income of married joint filers making more than $140,000 a year and single filers above $80,000. The bill also includes an overhaul of the state sales tax system by reducing the overall rate from 6.875 percent to 6 percent but broadening the base to include clothing and many personal services. There is also an increase in tobacco taxes but no changes in alcohol taxes. Overall, the Senate tax bill is roughly $700 million lower than the House. The Senate will take up its bill on the floor on Monday.

Education Finance Legislation

HF630, the Omnibus Education Finance Bill, passed in the House and the Senate this week. The House passed the bill, sponsored by Rep. Paul Marquart (DFL- Dilworth), on Tuesday with a vote of 83-50. The House version of the bill establishes goals to create the World's Best Workforce and focuses on college and career readiness throughout the education pipeline from early childhood programs to graduation.

The Senate passed the bill, sponsored by Sen. Charles Wiger (DFL-Maplewood) on Thursday with a 35-28 vote. The Senate bill provides statewide property tax relief, changes the pupil weighting system, and focuses on early childhood and all-day kindergarten programs as a means of meeting the workforce needs of today and the future.

Health and Human Services Finance Legislation

The Omnibus Health and Human Services Finance Bill passed in the House on Monday evening with a vote of 70-64. In both the House and the Senate, the two largest concerns were the HHS budget cut and additional cuts to nursing homes. HF1233, sponsored by Rep. Huntley (DFL-Duluth), includes a provision permitting county agencies to require drug testing for beneficiaries of the Minnesota Family Investment Program (MFIP) and requires licensure of certain facilities that provide abortions.

The Senate passed the bill, sponsored by Sen. Lourey (DFL-Kerrick), on a 36-28 vote on Thursday night. The Senate version of the bill includes a requirement for child care providers to participate in a quality rating system by 2018 and achieve at least a one- or two-star rating by 2020 in order to receive appropriations from the Child Care Assistance Program (CCAP).