Which Issues Will Be The Focus Of This Legislative Session?
A recent forum with Minnesota’s four legislative leaders provided insight into what issues are expected to be discussed during the state’s new legislative session, which began Tuesday.
House Speaker Paul Thissen, House Majority Leader Tom Bakk, Senate Minority Leader David Hann, and House Minority Leader Kurt Daudt attended the legislative discussion last week, which was sponsored by the Forum News Service.
The most important issues the legislative leaders outlined for the session included Governor Mark Dayton’s bonding bill, the minimum wage, business-to-business taxes, and the state’s projected budget surplus.
However, on Tuesday, the first day of the new session, Thissen reportedly said that the House planned to spend the day focused on a $20 million bill to help Minnesotans pay for their rising heating costs this winter. The Star Tribune said the measure would shift funds into a Low-Income Energy Assistance Program. The motion passed after just 45 minutes of debate, and the Minneapolis newspaper said Dayton will likely sign the shift in funds into law next week.
B2B Taxes: Set for Repeal?
On the minds of the Minnesota Chamber and many other business groups, is the discussion of the state’s business-to-business taxes, which were part of the 2013 omnibus tax law.
The law, which Republican leaders and business groups have sought to repeal for months, added a new sales tax on business equipment repair and maintenance, repealed a tax exemption on the purchasing of telecommunications equipment by telecom providers, and added another new tax on storage and warehousing services of business-related goods.
In December, the state budget was released and projected a surplus of more than $1 billion for the end of the two-year budget cycle. At the time, Dayton said that, if the budget projection numbers proved true, $231 million of that surplus should be used to repeal all three of the business-to-business taxes.
At last week’s forum, Republicans Daudt and Hann and Democrat Thissen all indicated that they support the repeal of the business taxes; Democrat Bakk, however, was more hesitant, according to the nonpartisan House Public Information Service (PIS).
“I think it totally depends on what the February forecast shows,” Bakk reportedly said at the forum. “I am a bit reluctant, not only on cutting taxes, but on additional new spending measures that have tails in the next biennium. . . . Economic recovery still seems pretty fragile to me.”
The House Taxes Committee was scheduled to hear multiple bills Tuesday related to the repealing of the business-to-business taxes.
The Hot-Button Minimum Wage Issue
While it seems inevitable that some sort of minimum wage increase will occur soon, the details are still in contention. The state’s current minimum wage, with a few exceptions for specific professions, is set at $6.15 per hour, although many employees are bumped up to the federal minimum of $7.25 per hour.
During last year’s legislative session, the House passed a bill raising the state’s minimum wage to $8.50 per hour for small employers and $9.50 per hour for larger employers, as of August 2015. Just days after that, however, the Senate passed its version that put the hourly rate at $7.75 per hour.
“I don’t see any reason we shouldn’t be able to move expeditiously on this bill and get it passed after working out what are legitimate public policy issues,” Thissen said at last week’s forum. “I hope that we’re able to move it out in the first couple weeks of session.”
Before either plan can advance, a conference committee needs to convene to work out the differences between the House and Senate proposals. Other than the hourly wage prices, Bakk said the two versions also differ on agricultural overtime, parental leave, inflation adjustments, and on the definitions of a “small business.”
Bakk was less confident in the benefits of a minimum wage increase than Thissen, arguing that it could hurt small “mom and pop”-type businesses.
“What I don’t want to find out is the nursing home in the City of Ely had to close and those 31 families will now have their loved ones 46 miles away in Virginia,” said Bakk. “I could vote green for the House bill personally . . . but I cannot tell you today that there will not be some unintended consequences that I will then own.”
Dayton’s Billion-Dollar Bonding Bill and MN’s Budget Surplus
According to the PIS, in recent years the legislature has limited biennial bonding laws to no more than a combined $1 billion.
Fargo-Moorheard newspaper Inforum said the bonding bill issue is unlikely to move quickly, as the GOP and DFL leaders disagree on what should be funded. According to the newspaper, Republicans want the money focused on fixing buildings and transit needs, rather than new facilities like civic centers.
Bakk and Thissen also want more of the state’s expected surplus to fund bonding projects, such as the Capitol renovation, while GOP leaders want to limit public works spending.
Minnesota’s November economic forecast projected a budget surplus of $825 million; how to best use that surplus will be a large part of the upcoming session.
“We don’t have a problem with revenue; we have a problem with spending. … What it means is we’ve overtaxed Minnesotans,” Daudt reportedly said last week. “For us to do some celebratory dance because we’ve got extra money in the state’s budget right now when Minnesota families haven’t seen that money in their pocketbooks or their family budgets, I think, is the ultimate arrogance.”
Bakk argued that at least some of the money should go toward shoring up the states budget reserves. However, both sides agreed that many decisions will depend on the updated budget forecast, which is scheduled for release Friday.
The session can extend no longer than May 19, and, according to Inforum, that’s going to leave legislators very little time to address the more than 2,000 bills that remain open for debate.
Additional issues on the table include the construction of a $63 million Senate office building, allowing Sunday alcohol sales, and action regarding the future of the MNsure health exchange.
Actions that have reportedly been taken off the table include issues regarding frac sand mining and proposals to require deposits on bottles and cans.