Week 17 Friday May 3rd
Dear Friends and Neighbors,
The Senate passed the 2019 Jobs, Energy, Commerce, Health and Human Services, Taxes, Transportation, and E12 bills this week. With their passage, all major budget bills have passed off both the House and Senate floors and are heading for conference committees.
Senate Majority Leader Paul Gazelka, Speaker of the House Melissa Hortman, and Governor Tim Walz agreed to provide conference committees with fiscal targets on May 6. Once the budget targets are established, negotiations between the different budget bills can begin to create a final product.
We are entering the final stretch of the process to determine what policies will shape our state and how we will fund it. In this Newsletter you will see some highlights of the Omnibus bills that were passed this week, as well as a few important events of note.
As always, keep in touch and let me know what is important to you. These last two weeks I have received a steady stream of what matters to the people of Champlin, Coon Rapids and Brooklyn park. It is that outreach that continues to help inform my decisions as session nears its close.
Sincerely,
John
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E-12 Omnibus
The Senate passed its $211 million E-12 budget after six hours of debate this week. The bill provides a half-percent increase on the per student funding allowance, the main funding driver for Minnesota schools.
It is important to note that the vast majority of increased state funding for the next two-year period is not new operating funds for Minnesota classrooms, but is represented by more new students (27,000) and more students receiving special education services. There will be rigorous discussion regarding what school districts will require to ensure they can provide a quality education for this increase in students and those who need special education services. (SF 7)
Health and Human Services Omnibus
The omnibus health and human services budget bill passed off the Senate floor this week. This bill went through intense discussion on the floor as it reviewed and altered some funding models while changing a few key programs. Among them was the sunset (or end) of the provider tax. This tax was 2% on services from healthcare providers to raise roughly $700 million each year to provide healthcare for those who struggle financially most in Minnesota.
There was also debate about the cutting of the CCAP program and charging the Department of Human Services with creating a replacement service with proper anti-fraud controls.
It is clear that in conference committee there will much work ahead of all members to ensure all Minnesotans receive the healthcare and services they need. (SF 2452)
Senate jobs, energy, and commerce bill passes
The Senate passed the omnibus jobs, energy, and commerce bill on a 43 – 24 vote this week. The jobs section of the proposal includes some investments in equity programs, provides additional resources for vocational rehabilitative services, and increases the penalties for labor trafficking. One of the most contentious pieces of the bill revolved around a provision that would enforce a uniform minimum wage determined only by the state, overriding any local decisions on the matter. The argument Republicans posed for the provision is that with a uniform minimum wage it makes it easier on businesses, particularly with multiple locations to maintain a standard pay rate and cost maintaining their business. The argument Democrats offered says the cost of living in each city can be wildly different from one to the next, and that local units of government should be able to adjust up if needed based on their cost of living.
The commerce section of the bill was had a $0 target, so there was no new funding to be utilized. There was $800,000 cut to a grant to Prepare and Prosper, an organization that works to build financial health and provide access to quality tax and financial services for low- and moderate-income Minnesotans.
The energy section of the bill includes numerous policy changes and a significant spend-down of the Renewable Development Account (RDA), which is funded by Xcel Energy’s ratepayers as part of a long-term agreement on storage of spent nuclear waste from the company’s nuclear power plants. RDA-funded items include: compensation awards to businesses harmed by the early closure of the Benson biomass plant, a Prairie Island “net-zero” project, a community energy transition competitive grant program, a “solar for schools” program, and an electric vehicle charging station loan program.
The bill also includes changes to the state’s Conservation Improvement Program (CIP) to benefit electric cooperatives and municipal utilities. Controversial items in the bill include placing a cap on Xcel Energy’s nuclear waste storage payments to the Renewable Development Account, removing the 100-megawatt limit on hydroelectric power for satisfying the Renewable Energy Standard, the removal of the state’s moratorium on nuclear power, and a prohibition on the use of Commerce Department funds for legal challenges involving the Enbridge Line 3 pipeline. (HF 2208)
Tax Omnibus
Tax bills typically present many good items and important bipartisan changes that are widely agreed to, and that is the case once again this year. There were several bipartisan provisions in this bill to provide tax relief and better utilize the taxes the state collects. There were still some disagreements in where tax relief should be concentrated regarding income tax as well as a major disagreement in federal tax conformity within the bill. On a related and local note, my TIFF bill for the City of Champlin is in both the house and senate bills. This is another benefit for Champlin and its efforts to make the Mill Pond accessible for all citizens.
Tax conformity is when a state government aligns some or all of its code with changes in the Federal tax code. While there are several tax conformity measures in the bill, however it does not conform to several corporate tax changes, such as taxing foreign corporate profits.
Differences between the Senate and House tax bill now will be worked out in conference committee, which is scheduled to hold its first hearing May 3. (SF 5)
Senate omnibus transportation budget bill passes
The Senate passed a light funding package for Minnesota’s transportation system this week, which is the fifth largest in the country. The bill provides no additional revenue for our roads, bridges, or transit even though significant additional investments will be necessary in the coming decades. Minnesota will have at least 700,000 new residents in the next 30 years while over 50% of our roads are more than 50 years old. Minnesota’s state highways and bridges face a $6 billion funding gap over the next 10 years, and estimates suggest a $18 billion gap just to maintain current performance of our entire transportation system over the next 20 years.
The average Minnesotan spends more than $1,300 per year on additional gasoline sitting in traffic, lost time, and car repairs due to wear and tear, according to the American Society of Civil Engineers. In October 2018, the ASCE graded Minnesota’s roads a D+, bridges a C, and transit a C-. The Legislature must have an honest conversation with Minnesotans on the need for additional transportation investments to deliver the infrastructure we expect and deserve. (HF 1555)
It is my greatest honor to represent you the citizens of Brooklyn Park, Champlin and Coon Rapids here at our great state capitol. In addition to representing you, I absolutely enjoy it when you come visit.So come on down, reach out and tell me what matters to you so I can continue working on your behalf. You can reach me by email at sen.john.hoffman@senate.mn, phone by 651-296-4154 or just stop by. I am at 95 University Avenue Suite 2231 in the Minnesota Senate Building
Sincerely,
Senator John Hoffman
If you have any questions or concerns feel free to call my office at 651-296-4154 or by e-mail at jhoffman@senate.mn