City and County Legislative Updates for Region 5 - Dec. 2018

With the election season formally having come to a close, legislators in St. Paul and around the state have begun preparing for the 2019 legislative session set to begin Jan. 8, 2019.

A new majority in the House of Representatives means a change in committees and committee assignments, chairmanships, and other legislative assignments. Rep. Melissa Hortman (D-Brooklyn Park) has been elected by her peers to be nominated as the Speaker of the House when the session convenes in January. Rep. Ryan Winkler (D-Golden Valley) will serve as Majority Leader, and outgoing Speaker of the House Kurt Daudt (R-Crown) will serve as the Minority Leader. Regionally, Rep. Josh Heintzman (R-Nisswa), representing Crow Wing County in Region 5, has been elected minority whip for the House Republican Caucus.

Speaker-designate Melissa Hortman has also announced the creation of a new committee structure for the next biennium. Newly created committees will focus on criminal justice, energy and climate, housing, and greater Minnesota economic development and job growth. One more prominent new committee will focus on legislative process reform in an effort to provide efficiencies and streamline the sometimes-cumbersome legislative process.

There were only minor changes on the Senate side of the Legislature. Sen. Jeremy Miller (R-Winona) has assumed the role of President of the Senate, and Sen. Paul Anderson will serve as chairman of the Higher Education Committee, replacing retired senator Michele Fischbach, who is currently serving as lieutenant governor.

With these new committees in place, legislators will begin setting their priorities. The state operates on a two-year budget cycle, called a biennium. In the odd-numbered years, legislators prepare and set the state’s two-year budget. Traditionally, the even-numbered years are shorter legislative sessions and reserved for passing legislation funding public infrastructure projects. In those even-numbered years legislators will also respond to changes in the budgets they had passed in the previous years, if necessary. It is expected that legislators will begin the 2019 legislative session by addressing tax reform almost immediately.

The measure to ensure federal tax conformity in the 2018 legislative session failed to be passed into law, creating challenges for Minnesota tax filers and preparers for the 2018 taxes payable in April 2019. The hope is the Legislature can make those corrections before the filing deadline.

Recount

There was one election recount in Minnesota, in portions of Region 5 in northern Cass County. The election between former Rep. John Persell (D-Bemidji) and sitting member Rep. Matt Bliss (R-Pennington) was within the margin mandating an automatic recount. On election night, Rep. John Persell was declared the victor by eight votes. At the conclusion of the recount, that margin grew to 11 votes. Rep. Presell has served in the Legislature previously, representing the same area for four legislative sessions before Rep. Bliss defeated him in 2016. Persell is among the new or returning legislators who helped ensure control of the body would be held by the Democrats come January. They now hold 75 seats, to the Republicans’ 59 seats. Rep. Persell is also set to chair the Environment and Natural Resources Policy committee.

Priorities

In preparation for the upcoming legislative session, Governor-elect Walz and Lieutenant Governor-elect Peggy Flannagan spent five days hosting listening sessions in various cities and towns across the state. The listening sessions offered the new administration an opportunity to hear directly from voters on their wishes for the incoming elected officials, especially regarding the state department’s administrative positions Walz is expected to fill in the coming weeks. While the discussions varied at each meeting, central themes were the size of state government and the state’s department’s constituent services, education, mining, equality, and economic opportunity.

Budget forecast

Minnesota Management and Budget (MMB), the state’s central budget office, has released the semiannual budget and economic forecast. The current biennium, which ends in June 2019, shows an estimated $1.54 billion surplus. This leaves an additional balance for the 2020-21 biennial budget, which will be set by the Legislature and Governor-elect Walz during the coming months. The surplus is due to higher-than-projected revenue and less-than-projected expenditures.

Per state statue, the projected surplus automatically adds $500 million to the state’s budget reserve, making that account the largest in state history at just over $2 billion. While the forecast was well received and largely good news, MMB also indicated that slower economic growth is expected in the 2022-23 biennium. Pending any substantial future shifts, a surplus is still expected in that biennium, however, not as sizable as the current situation.

The release of this forecast unofficially starts the 2019 legislative session, as the incoming legislature and administration will use these figures and projections in crafting their budget proposals.