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Capitol Report: Senate GOP Tax Plan, Hands-Free Driving

Produced and Moderated by Shannon Loehrke

Senate Republicans recently announced their plan for $900 million dollars in tax relief as part of their Advancing Minnesota agenda. Tax Committee chair, Senator Roger Chamberlain, R-Lino Lakes, and ranking minority member of the Tax Committee, Senator Ann Rest, DFL-New Hope, talk with Capitol Report Moderator Shannon Loehrke about the Republican plan.

According to Minnesota's Office of Traffic Safety, distracted or inattentive driving is a factor in 1 in 4 crashes in the state. Fourteen states and the District of Colombia have laws requiring hands-free technology for drivers. Senator Jim Carlson, DFL-Eagan, talks with Shannon about his bill that would make Minnesota the fifteenth state to require hand-free technology.


WEEK OF MARCH 20 to MARCH 24 IN REVIEW
by Charley Shaw

Several Senate finance committees this week rolled out 2018-2019 omnibus budget proposals. The bills would appropriate General Fund money for state agencies that handle functions ranging from regulating pollution to operating prisons. The Minnesota Department of Management and Budget earlier this year released an economic forecast that projected a $1.6 billion surplus for the upcoming biennium. The state Legislature and governor must now pass a budget to fund state operations for the next biennial budget that begins July 1. On Thursday and Friday, the Senate Finance Committee advanced five budget bills to the Senate floor:

Thursday

Judiciary and Public Safety (SF 803), sponsored by Sen. Warren Limmer, R-Maple Grove. The Senate Judiciary and Public Safety Finance and Policy Committee's target is $59 million above the base amount for the upcoming biennium. The proposed budget includes $9.2 million to cover a deficiency from the previous fiscal year for the Minnesota Department of Corrections.

The Finance Committee on a voice vote recommended the bill to pass as amended and be sent to the floor.


Environment and Natural Resources (SF 723), sponsored by Sen. Bill Ingebrigtsen, R-Alexandria. The committee's General Fund target is a reduction of $40 million from the base amount. The bill funds state agencies including the Minnesota Pollution Control Agency and the Minnesota Department of Natural Resources.

More than 75 percent of the funding in the bill comes non-General Fund accounts that are built up by hunting and fishing license fees and other revenue sources.

The Finance Committee on a voice vote approved the bill as amended and referred it to the Senate floor.


Agriculture, Rural Development and Housing (SF 780), sponsored by Sen. Torrey Westrom (R-Elbow Lake). The target didn't provide additional spending in excess of the General Fund base of $220 million. The bill includes funding for the agencies including the Minnesota Department of Agriculture and the Minnesota Housing Finance Agency.

The Finance Committee approved the bill on a 7-5 roll-call vote and sent it to the floor.


Friday

State Government and Veterans (SF 605), sponsored by Sen. Mary Kiffmeyer, R-Big Lake. The bill sets the budgets for constitutional offices and state agencies such as the Departments of Revenue and Management and Budget. The Senate's target would be a $30-million reduction in spending for the biennium.

The Finance Committee added the contents of the veterans omnibus bill (SF 1316), sponsored by Sen. Bruce Anderson, R-Buffalo, into the bill.
SF 605 was approved as amended on a 6-4 roll-call vote and sent to the Senate floor.


Higher Education (SF 2214), sponsored by Sen. Michelle Fischbach, R-Paynesville. The Senate has a $100 million budget target above the base amount. The bill includes funding for the University of Minnesota and Minnesota State Colleges and Universities System.

The Finance Committee approved the bill as amended on a voice vote and referred it to the Senate floor.


Next Week

Senate committees will be resume their work next week (March 27-March 31) on areas of the budget that include E-12 education, health and human services, jobs and economic growth and transportation.


OTHER FEATURES THIS WEEK:


Future of Minnesota's Health Care Exchange

by Shannon Loehrke

As Minnesota prepares to grapple with the rapidly changing health insurance marketplace, a bill before the Senate Health and Human Services Committee on Thursday, March 23, would end MNsure, Minnesota's state-run health insurance marketplace. In response to the recent action in the House Committee on Health and Human Services that voted in favor of abolishing MNsure for the federal healthcare.gov exchange, Chair of the Senate Health and Human Services Committee Michelle Benson, R-Ham Lake, brought SF 1148 before the committee to have the debate about whether to stay with MNsure, move to the federal exchange, or offer an alternative.

The bill's sponsor, Senator Scott Jenson, R-Chaska, amended the measure to establish a private state-based marketplace. "I think MNsure has been a tool to bring us to a certain point in time," said Jensen. He said that policymakers need to "sharpen their pencils" as they consider ways to move forward.

Senator Jeff Hayden, DFL-Minneapolis, reminded committee members that "there a large swaths of Minnesotans that this is working well for, that they are getting their health insurance as they need it, they are getting covered, they are able to access the doctors and get the care that they need."

The committee did not vote on the measure.



Panel Debates Senate Transportation Funding Plan

by Shannon Loerhke and Steve Senyk

The Senate Transportation Committee began its debate on the proposed $3.6 billion transportation funding plan put forward by Senate Republicans that is intended to boost road and bridge construction over the next ten years without raising the gas tax.

For the next biennium, the proposal, sponsored by Senate Transportation Chair Scott Newman, R-Hutchinson, would move $400 million dollars from auto-related sales taxes from the general fund to a dedicated transportation fund, rely on $53 million dollars in savings from MNDOT efficiencies, use $117 million from MNDOT flexible spending funds and issue $300 million dollars in trunk highway bonds. The plan also depends on $466 million dollars in federal grants.

Most of the Wednesday meeting was dedicated to public testimony. Scott Peterson of the Minnesota Department of Transportation thanked Newman for raising the level of transportation funding in the bill, saying "I think it's a recognition of the additional investment we need in the highway system as well as the local road systems to make sure that they are preserved and in a state of good repair..."

Despite support of the additional funding, Peterson disagreed with the funding sources. "We are concerned that the bill uses General Fund revenue to increase funding for roads and bridges." He explained that Governor Dayton called for additional funding through constitutionally-dedicated transportation revenue sources, such as the gas tax.

DFL committee lead Senator Scott Dibble, DFL-Minneapolis, questioned Senator Newman on proposing a road-and-bridge bill. "Do you fundamentally believe that transit is just an extra add-on that can be addressed at a future point of time and it's okay to pass a roads-only bill?" he asked.

"How do we address transit at this stage of the game knowing that there are a number of members in this committee that genuinely and deeply support light rail, and there are members that genuinely and deeply oppose it?" Newman asked. "We do not have a consensus on light rail, and I think that's one of the lynchpins to the issue surrounding transit," he added.



Senate's Funding Plan for State Agencies Advances

by Steve Senyk

State officials and representatives of Governor Mark Dayton's administration called upon members of the Senate Committee on State Government Finance to raise the level proposed by Senate Republicans for funding state agencies in the coming biennium . State Auditor Rebecca Otto, Minnesota Management and Budget Commissioner Myron Frans, Administration Commissioner Matt Massman and Revenue Commissioner Cynthia Bauerly appeared before the committee Tuesday, March 21, to urge changes to SF 605, the omnibus state government finance bill authored by committee chair Senator Mary Kiffmeyer, R-Big Lake.

According to Senate fiscal numbers, the Senate proposal is about $143.5 million dollars below Governor Dayton's recommendations. MMB Commissioner Myron Frans said the Senate's level of funding would reduce state agency budgets by 5 to 7.5 percent. "Governor Dayton has made it clear that he will not accept arbitrary, across-the-board reductions in agency spending," he said.

Last week, Senate Republicans released their budget targets, which showed a $30 million dollar reduction in state agency spending as compared to the base level of funding for FY 2018-2019. The state agency reduction is identified as part of the Senate Republican goal of offering $900 million dollars in tax relief while spending about $741.5 million dollars of the $1.65 billion dollar budget surplus for other areas of the state budget, including transportation.

The bill was referred to Finance on a 6-4 party-line vote.



Senate Republicans Announce Transportation Funding Plan

by Shannon Loehrke

Senate Republicans called a press conference at the State Capitol Monday, March 20, to release their transportation funding proposal. According to Majority Leader Paul Gazelka, R-Nisswa, and Transportation Committee Chair Scott Newman, R-Hutchinson, the plan would provide $3.6 billion dollars in transportation funding over the next ten years without raising the gas tax.

For the next biennium, the proposal would move $400 million dollars from auto-related sales taxes from the general fund to a dedicated transportation fund, rely on $53 million dollars in savings from MNDOT efficiencies, use $117 million from MNDOT flexible spending funds and issue $300 million dollars in trunk highway bonds. The plan also depends on $466 million dollars in federal grants.

Additionally, Newman outlined two new policy changes. One provision would require MNDOT to increase transparency in the selection of trunk highway projects based on a critical report by the Office of the Legislative Auditor issued in March, 2016. The other provision would remove the state's partial responsibility for paying operating costs of future light rail projects. The state currently pays fifty percent of operating costs for existing light rail transit lines.

"This is what the people in the state of Minnesota are demanding. They want their infrastructure fixed," said Senator Newman.

Ranking minority member of the Senate Transportation Committee Scott Dibble, DFL-Minneapolis, was critical of the Republican proposal. "$117 million dollars. That is the amount of new money that is going into our state trunk highway system. This $3.6 billion dollars over ten years is largely a fiction and is largely money that is already existing and allocated, or being appropriated on a one-time basis or simply borrowing," he said.



Governor Dayton, Senate GOP Outline Budget Plans

by Steve Senyk

Governor Mark Dayton released his supplemental budget Friday, March 17, and his priorities stood in contrast to the Senate Republicans budget targets, which were also released Friday. Legislative budget committees will begin their work in earnest over the next two weeks as they finalize their budget proposals for full floor debates.

Dayton proposed setting aside an additional $200 million dollars to the $1.5 billion dollar reserve. He also called for $100 million dollars in new spending for pre-kindergarten learning opportunities. The amount is in addition to the $75 million dollar pre-kindergarten initiative announced earlier this year.

In contrast, Senate Republicans released their budget targets, which, according to Senate Counsel and Research figures, would allocate $300 million dollars from the anticipated $1.65 billion dollars surplus, for early childhood through high school education. They also would add $100 million dollars from the projected surplus to higher education for workforce development efforts, and $400 million dollars for transportation.

The Senate Republican plan also would increase spending by $2.2 billion dollars in health and human services; however, Senate DFLers said the amount falls short of the anticipated growth in program demands and inflation. Senator Tony Lourey, DFL-Kerrick, cited it as a $335 million dollar cut.

The Senate Republican plan would reduce spending in several areas, including $30 million dollar reduction target to state agency budgets and $40 million dollar target cut to environment and natural resources funding.

Earlier this week, Senate Republicans announced a tax relief plan totaling $900 million dollars, as compared to Governor Dayton's $300 million dollar tax reduction proposal.

Of the projected $1.65 billion dollar surplus, Senate Republicans aim to provide $741.5 million dollars in new spending in addition to the $900 million dollars in tax relief.


Minnesota Senate Media Services
The Minnesota Senate provides live and archive coverage of Senate floor sessions, committee hearings, press conferences and special events. Capitol Report, a weekly public affairs program, and civic education videos also are archived. All programming is produced by Senate Media Services. Audio coverage is recorded and reported by Senate Committee staff and Senate Sergeant At Arms office.

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