At last Friday’s 2014 Session Line-Up, the forecast was mostly sunny, although our elected officials spotted a few clouds on the horizon.
The forecast I’m referring to is, of course, the state budget forecast. On Friday morning officials released the latest budget numbers, projecting a $1.23 billion surplus. And going into the next biennium, the budget is expected to be in the black by $2.6 billion.
The breaking news kept most of the legislative leaders away from the 2014 Session Line-Up, hosted annually by the Minnesota Council of Nonprofits and the Minnesota Council on Foundations, but their stand-ins shared party perspectives and answered questions from the independent sector crowd.
Sertich Outlines Governor’s Goals
Commissioner Tony Sertich, head of the Iron Range Resources and Rehabilitation Board (IRRRB), represented Governor Dayton (who was recovering at home following hip surgery). The administration’s goals for this 12-week legislative session include:
- Tax relief. This includes changes to conform with federal tax provisions (such as the working family credit, marriage penalty, etc.) and repealing business-to-business taxes
- Raising the minimum wage. The Governor seeks $9.50 by 2015, and a bill is already in conference.
- Bonding bill. Commissioner Sertich cited a need for about $1 billion in bonds to fund infrastructure needs, so construction workers can start getting “paychecks instead of unemployment checks.”
- Legislative housekeeping. The administration wants the legislature to repeal outdated laws and adopt plain language statutes.
Commissioner Sertich confirmed also that replenishing the state’s rainy day fund (another weather reference!) will be part of discussions about how to use the just-announced budget surplus.
DFL Senators Call for Building Up Reserves
Senator Kari Dziedzic stated that the bonding bill is first priority for the DFL caucus this legislative session, enabling the state to take advantage of low interest rates, put people back to work, and take care of infrastructure needs at the University of Minnesota (part of her Senate District 60) and around the MnSCU system.
In response to a question, Senator Dziedzic confirmed that money for housing needs across the state will be part of the bonding bill, too. And Senate Democrats are on the same page with the Governor regarding tax changes and some increase in the minimum wage (although not, perhaps, to $9.50).
She also called for building up reserves so that Minnesota can avoid the budget roller coaster of recent years.
Senator Questions Local Bonding Requests
When Senator Roger Chamberlain (District 38) spoke on behalf of the Senate Republicans, he referenced the bonding bill, the repeal of business-to-business taxes, and boosting the minimum wage.
He noted support of The 5% Campaign, which advocates for a 5 percent rate increase for home and community-based services in 2014 primarily to boost wages of direct support professionals and caregivers.
(MCN representatives reminded attendees that raising the minimum wage is part of a package of initiatives its Minnesota Budget Project is advocating for this year — including tax changes and increases in government contracts.)
When asked about Republican bonding priorities, Senator Chamberlain emphasized that bonding should exclusively fund infrastructure projects that have regional and statewide impact – not local items such as “$7 million to ‘fix the spoon’ in the Minneapolis Sculpture Garden.”
Representative Loon Strikes Bipartisan Tone
Speaking for the minority in the House, Representative Jenifer Loon (District 48B) reported that legislators are acting quickly in the short session, noting Tuesday’s bi-partisan passage of the $20 million emergency heating assistance bill, as well as the Tax Committee passing out a federal tax conformity bill that will be in the Ways and Means Committee today.
When speaking about the proposed minimum wage increase, she offered a more nuanced view. While helping low-income wage earners is a priority, some nonprofits (and businesses) will be hurt by increased wages and increased competition for low-paying positions, such as those in the demanding health care field.
Representative Loon also noted that various nonprofits are part of the bonding requests, specifically citing Dorothy Day Center in St. Paul, the shelter where she and her fellow legislators recently volunteered. (To build bipartisan camaraderie, she and DFL Representative John Ward are organizing once-a-month, Tuesday-evening volunteer opportunities for legislators. Contact her if you have a suitable volunteer event!)
Carlson’s Forecast Not as Rosy
Rounding out the morning, DFL Representative Lyndon Carlson (District 45A) provided a little more perspective on the forecasted surplus.
He reminded the audience that, ever since the Moe/Pawlenty budget deal some years back, the cost of inflation has not been counted in budget forecasts. “That’s probably $1 billion off the top right there,” he cautioned.
Carlson also mentioned another possible use for whatever budget surplus is actually available – supplementing the very tight bonding bill with cash. (For more, see the Star Tribune’s editorial on this topic.)
No Predictions Are Certain
A super-majority is required to pass the bonding bill, so it will be interesting to see how the majority DFLers attract the minority Republican votes to accomplish their goals during this whirlwind legislative session.
The only sure-fire predictions we can make are that dramatic shifts in tactics and outcomes will occur in the next 10-plus weeks of the session. Just like the weather forecast in Minnesota, today’s snow squall may be tomorrow’s sunshine and blue skies.
-Wendy Wehr, MCF vice president of communications and information services
Photo cc cptii