February 27, 2015

Minnesota Weekly Legislative Update: 02/27/2015

The legislature this week made progress on several issues. The emergency funding bill was finally agreed to by both bodies after a conference committee reached agreement. Throughout the week, committees were busy as deadlines get closer. The week ended with the February forecast projecting a much larger surplus.

Budget Forecast

Minnesota Management and Budget (MMB) released the much-anticipated February Forecast today showing a significant increase in the budget surplus. The forecast estimated a state budget surplus of $1.869 billion, up $832 million from the $1.037 billion surplus forecasted just three months ago. MMB Commissioner Myron Frans attributes this difference to an improved economic outlook due to a stronger U.S. dollar and lower oil prices.  Additionally, Minnesota's unemployment rate is 5th lowest in the nation at 3.6 percent and wage growth is forecasted at 5.4 percent in 2015, up a full percent from previous estimates.

Governor Dayton encouraged reinvestment of these dollars back into the state through expansions of his previous budget proposals on universal pre-K education, child-care reform, additional investment in healthcare and funding for higher education. He specifically mentioned a fully funded universal pre-K system and a higher education tuition freeze over the next two years for state colleges and universities, with those schools chipping in half the cost in the second year. Finally, Governor Dayton is looking at proposing an $850 million bonding bill in late March.

DFL Leaders echoed many of the Governor's statements on how to use the additional surplus and Sen. Hayden (DFL-Minneapolis) especially stressed the importance of universal pre-K and early childhood education. GOP leaders and Speaker Daudt want to give at least half the surplus back to Minnesotans through tax relief measures, and strongly challenged the idea of a new gas tax proposal to help pay for transportation given this increased surplus.

Education

The universal preschool bill (HF46) authored by Rep. Erin Murphy (DFL-St. Paul) was heard in the House Education Policy committee and eventually voted down 11-8 on party lines. Universal preschool is also contained in HF844, Governor Dayton’s proposal, which will continue to be under discussion. A widely discussed piece of legislation regarding teacher licensure and layoffs (HF2) is sponsored by Education Finance chair Jenifer Loon (R-Eden Prairie). The bill came to the House floor this week, but was sent back to Ways & Means when a fiscal note was released identifying unanticipated costs of the legislation.

Wild Rice/Sulfate Standards

The discussion of regulating sulfate admissions to protect wild rice waters drew attention in the House this week. A bill (HF1000) authored by Rep. Carly Melin (DFL-Hibbing) would prevent the Minnesota Pollution Control Agency from enforcing existing pollution draft standards until final rules are confirmed. There was a long list of testifiers, which required the Chair to extend time on the bill into an additional hearing.

Upcoming Legislative Notes

With the release of the budget forecast today, Governor Dayton is expected to release a supplemental budget plan that sets out his priorities during the week of March 9. The Senate is scheduling additional floor session time for next week, indicating they will take up more bills now that deficiency funding has been addressed.

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