Update from the Capitol - March 2019
March is often the second-busiest month of all legislative sessions. This year is no exception.
To begin, Minnesota Management and Budget (MMB) Commissioner Myron Frans and Gov. Tim Walz unveiled the updated budget forecast. The February forecast is one of two annual budget indicators released by MMB after finishing a deep analysis of state agencies and economists. Just months before the budget surplus was estimated to be more than $1.5 billion, but this most recent indication shows a more conservative amount, at just over $1 billion. The $492 million decrease comes because of slower than expected growth and smaller collections compared to earlier projections. The governor and legislators will use the forecast numbers to help shape policies and set financial priorities for the remainder of the 2019 session.
Following the budget forecast, Gov. Walz released his first proposed biennial budget to legislators. This release sets the path to the end of session, which must end by May 20. The $49.5 billion budget, billed as the “Budget for One Minnesota” would increase state spending by about 9 percent during the next biennium, with E-12 education (from early childhood education through secondary years), and health and human services each receiving 9 percent increases. The budget proposal largely fulfills many of the campaign promises made by Walz and Lt. Gov. Peggy Flannagan during the 2018 election. Gov. Walz made clear this proposal is the response to what Minnesotans voted for in November by historic proportions. The budget also provides significant tax cuts, providing $440 million in tax relief and cutting taxes by over $220 million for farmers and small businesses. The proposal includes $100 million to expand the working family tax credit, which administration officials claim lowers taxes by an average $227 for 46,700 households. The budget also increases the allowable subtraction for Social Security payments and provides a $50-per-acre property tax credit for farmers who provide buffer strips of land near public waters and drainage systems, a priority of the previous gubernatorial administration.
March 15 marks the first committee deadline, the date by which policy bills must have been heard and positively acted upon in either body of the Legislature to continue in the process. Naturally, this means the first two weeks of the month are full of policy committee hearings, while the latter two weeks of the month legislators continue preparing for the second committee deadline. This marks the date by which bills must be acted on in the other body. Policy bills that fail to meet these deadlines are more or less retired for the session but may again be considered in the second year of the session, 2020.
Amidst all the bill action, Gov. Walz signed into law his first bills as governor. Both bills signed into law this month address issues left unresolved from the last session. The first is a capital investment bill that funds over $100 million of projects throughout the state. These projects were funded last biennium but faced a legal battle in the courts over concerns about their funding source. The new bill fixed the issue, and instead of using Legislative-Citizen Commission on Minnesota Resources funds for clean water initiatives, the projects will now be funded by the more typical means of bonding dollars. The second bill was an effort to address ongoing issues with the vehicle License and Registration System known as MnLARS.
A legislative special election has been scheduled for March 19 to replace the seat vacated by Rep. Jason Rarick, who was victorious in his election to replace Sen. Tony Lourey, who retired to take a position in the Walz administration. Candidate Nathan Larson challenges Tim Burkhardt for the seat after being victorious in the special election primary. The election will either narrow the Democratic majority in the body or give another seat to the Republican caucus. It is not expected the election will have significant implications on the rest of the legislative session given the current makeup of the House of Representatives.
In the coming weeks, it is expected that gambling, divorce and parenting time, voting rights, and internet privacy will receive legislators’ attention, and finance committees will begin meeting more frequently as they start to broker an agreement with the governor’s budget proposals. It is also expected education finance matters and tax issues are soon to be center stage in both the House and Senate, including a gasoline tax and a new health care provider tax.
The next major milestones for this session come March 29 and April 12, when committees in both bodies must have acted favorably on appropriation bills. While these deadlines do not apply to the House Capital Investment Division; the House Taxes, Ways and Means, or Rules and Legislative Administration committees; nor the Senate Capital Investment, Finance, Taxes or Rules and Administration committees, they do set the stage for the remainder of the session.
Sourcewell (formerly National Joint Powers Alliance) is a self-supporting government organization, partnering with education, government, and nonprofits to boost student and community success. Created in 1978 as one of Minnesota’s nine service cooperatives, we offer training and shared services to our central-Minnesota members. Throughout North America, we offer a cooperative purchasing program with over 300 awarded vendors on contract. Sourcewell is driven by service and the ability to strategically reinvest in member communities.