May 18, 2016

Legislative Home Stretch – Second to Last Week

Closed-door talks aimed at striking a budget agreement began Monday with a consensus that the divide over transportation needs to be solved before lawmakers can make real progress. Gov. Mark Dayton proclaimed the initial discussions were “constructive” as he emerged from his 90-minute conversation with House Speaker Kurt Daudt (R-Crown), Senate Majority Leader Tom Bakk (DFL-Cook) and a few other senior legislators.

With less than two weeks until the Legislature heads home, the transportation plan is pivotal. If lawmakers decide to move forward, it will affect how much of the projected $900 million surplus they will have left to devote to other items like taxes and bonding. Democrats, including Dayton, have proposed raising the gasoline tax to provide a new stream of reliable road money, but Republicans call that a non-starter. Daudt added that transportation is a priority item for all sides.
Transportation Conference Committee 
Conferees met again last Friday to hear the Senate offer on the transportation budget package. House Transportation Chair Tim Kelly (R-Red Wing) admitted that they have heard that transit is important and should be part of long term planning. In light of new money for transit, he has some concerns about where the money comes from and which projects it goes to. Rep. Tony Albright (R-Prior Lake) presented a Republican proposal about governance reform of the Metropolitan Council. Senate Transportation Chair Scott Dibble (DFL-Minneapolis) said that they are waiting for the Senate bill to get off the floor, so it can be taken up in conference committee. Kelly noted that he can see overall that scope and size of the amount for a ten year plan is not far from one another. He said they feel strongly about not supporting a gas tax as they find it regressive.  They feel similarly about an increase in license tab fees. He said they would come back with a counter offer, which will emphasize that we are in surplus, and can prioritize transportation at this time. Dibble countered that twenty other states have imposed a gas tax with bipartisan leadership. He feels that not raising dollars in a sustained fashion has a regressive outcome.
The conference convened again on Wednesday to hear the counter Republican proposal. GOP lawmakers may entertain a DFL plan to fund transit projects through a metro area sales tax increase if that funding comes with reforms in the governance structure of the Metropolitan Council. Kelly said he’s holding off on putting transit support in an offer as long as Democrats continue to push for a gas tax increase. Dibble said he was disappointed by what he described as a repackaging of the $6 billion ten-year House offer and its failure to fund transit. The House plan relies on a shift of motor vehicle-related sales tax revenues from the General Fund to road and bridge projects, as well as using one-time dollars from the projected surplus.
Dayton announced yesterday that a compromise transportation plan is in the works for Monday.
The Senate taxes committee met Monday to do a walk-through of their omnibus tax bill. Chair Rod Skoe (DFL-Clearbrook) remarked that the bill includes provisions we think are important from last year. He described it as a relatively small bill, which includes a minerals article dealing with IRRB, paid family leave, TIF provisions, a sales tax exemption for a siding facility, and federal conformity.  Tuesday they took public testimony, marked-up, and passed the bill. Members heard testimony from the Chamber and Minnesota Business Partnership opposing the paid family leave section of the bill, but a motion to remove the section failed along party lines. The bill passed on the Senate floor on Wednesday.
Supplemental Budget
The supplemental budget conference committee met Monday to begin presentations on the spreadsheets of the various House and Senate articles. The House is proposing just under $3.2 million in net supplemental spending for the biennium, the Senate proposal would spend an additional $456.7 million, just under Gov. Mark Dayton’s $494.5 million proposal.
The Senate proposal would increase spending across the board, but under the House proposal, spending would increase only in the areas of environment, transportation and jobs and energy. One major difference between the House and Senate supplemental budget bill comes via how to pay for the Border-to-Border Broadband Plan. The House version seeks a $15 million appropriation in Fiscal Year 2017 and $25 million in Fiscal Year 2018 to fund the program. As one-time appropriations, funds would work to provide high-speed Internet access to Greater Minnesota. The program would be required to reach underserved and unserved areas. Dayton has requested $100 million in his supplemental budget to expand broadband funding. The Senate broadband proposal would appropriate $85 million in Fiscal Year 2017.
The House proposal contains no net higher education spending, while the Senate is proposing $47.7 million. The House version contains policy provisions creating additional oversight of two types of research at the University of Minnesota: research using fetal tissue and psychiatric drug trials involving human subjects.
The House bill seeks to keep total health and human services appropriations flat. The bill would pay for new spending items by shifting MNsure appropriations before completely repealing the program and shifting enrollees onto the federal program in 2017. It would also implement a variety of new regulations for facilities that perform abortions and prohibit these facilities from being eligible for funds under certain federal family planning grants and state sponsored health care systems. The Senate bill doesn’t contain any of these provisions. The Senate bill would increase total appropriations by $50.7 million in Fiscal Year 2017 and $140 million in the subsequent biennium. Instead of repealing MNsure, it would increase funding to the program across a wide variety of items aimed at addressing issues with the program. Both bills contain a slate of items aimed at integrating mental health and chemical dependency treatments in the state.
With joint budget targets yet to be established. Conferees met for a second day on Tuesday to begin the walk-through of the side-by-sides of the various articles, and finished the review late Wednesday night. The real negotiation and selection of language has yet to occur.
Real ID
The Minnesota House is moving from requiring all Minnesotans to get federally compliant driver’s licenses and other identification to letting Minnesotans opt out of the Real ID requirements.
The Republican House had initially resisted the so-called “two track” option, which would allow Minnesotans to choose between a Real ID license and a standard one. The DFL Senate has a measure to offer Minnesotans a choice between the two.
The conflict between the two paths to adopt the federal Real ID requirements jeopardized a resolution to the identification questions this year. However, on Tuesday Rep. Dennis Smith (R-Maple Grove) author of the House Real ID measure, said he and his colleagues will now support offering Minnesotans a choice between a Real ID license and a standard license. The new measure was approved by the House Ways & Means committee on Wednesday and is now headed to the House floor.
The Senate bill was passed in the Judiciary Committee on Wednesday and passed Thursday on the Senate floor. The bills vary in that the House bill requires proof of citizenship; different implementation dates, and the House bill has rulemaking in the statute whereas the Senate gives rulemaking to DPS. The Driver and Vehicle Services Division is in the midst of replacing the computer system it uses to process licenses. Programming to allow the old system to implement Real ID would cost approximately $5 million and put programmers under a time crunch. The Senate bill addresses the agency’s concerns and implementation would wait until the new registration system is up and running. That would push the introduction of Real ID out to January 2018.
Presented by John C. Reich