The February forecast was released on Monday, and the state's deficit forecast improved by $1.2 billion. Gov. Dayton and the Legislature are now charged with addressing a $5 billion shortfall for the state's 2012-13 biennial budget.

  • The budget forecast was released on Monday by Minnesota Management and Budget. Revenue projections have improved by $1.16 billion since the last forecast in November, putting the budget shortfall at $5 billion. After the improved forecast figures were released, Gov. Dayton said he would alter his budget proposal by removing a 3% surtax on high-income earners and restoring cuts to health and human services. An updated budget proposal with the new economic news is expected to be released by Gov. Dayton soon. For more information on the February Forecast, read our report from earlier this week.
  • On Thursday, the governor signed HF1, which modifies the Pollution Control Agency and Department of Natural Resources permitting process. One of the more controversial provisions would allow the project proposers to draft their own Economic Impact Statements (EIS) instead of relying on local units of government to do them. While the business community is applauding the governor's action as a way to spur economic development and increase job growth, many opponents of the bill say it is putting "the fox in charge the hen house." Another provision in the bill would allow the Court of Appeals to handle any objections to the environmental reviews. Click here to read the governor's letter sent after signing the bill. This is the second bill of the session to be signed into law.
  • The alternative teacher licensure bill – SF40 – passed a conference committee on Tuesday this week. The compromise language re-passed both bodies on Thursday. The Education Finance chairs - Sen. Gen Olson and Rep. Pat Garafalo – were the chief authors of the bill. Both authors recognized past champions of this issue, including minority members Rep. Carlos Mariani (DFL- Saint Paul) and Sen. Terri Bonoff (DFL- Minnetonka), who carried legislation last year. In the bill, the Minnesota Board of Teaching will have authority to cancel an alternative teacher preparation program that does not meet certain requirements. Potential teachers in the alternative programs must have at least the required minimum grade point average and pass a basic skills test. Out-of-state teachers from accredited programs are also given a more efficient route to get licensed in Minnesota under the bill. Opponents of the bill question the lack of emphasis on teacher quality and training, while proponents say expanding licensure routes will get more high-quality individuals into schools and subject areas that need them. The bill is expected to be signed into law by Governor Dayton.
  • In a letter this week, Gov. Dayton urged the Legislature to expedite efforts to reinstate business property tax refunds. The refund timeline was altered by Gov. Tim Pawlenty last session due to concerns about the state's cash flow. After the improved economic forecast, these refund delays are unnecessary to keep the current budget balanced. The Minnesota Chamber – one of the state's largest business associations – supports this initiative to move up the property refund distribution. Gov. Dayton also announced his intent to appoint various people to the Metropolitan Council – an organization that deals with waste water management and transit systems, among other services in the seven-county metro area. A list of proposed appointments can be found here.
  • The House and Senate also took a vote on Gov. Dayton's tax provisions during Thursday floor session. No one in the House and only Senator David Tomassoni (DFL-Chisholm) voted in support of the proposed tax increases under the governor's plan. The tax provisions under the governor's plan sought to raise nearly $2.4 billion in new revenues by increasing tax rates on the state's highest income-earners. Majority leadership in the House and Senate say their budget proposal will be out by March 25. The next legislative deadline – Friday, March 26 – is when all omnibus finance bills must be referred to either the House Ways and Means or Senate Finance Committees.