A budget agreement, 3.9 percent property tax levy cap, a start to “historic” health care reform, a funding increase for education, bonding for the Central Corridor and a new Lake Vermilion State Park are part of the agreement bringing the 2008 session to an end.
Ticking off accomplishments, House Speaker Margaret Anderson Kelliher (DFL-Mpls) said it was the “most productive Legislature in a very, very long time. It is a good result for Minnesotans.”
She said that in a bipartisan way, they were able to balance the budget, provide property tax relief and create jobs through comprehensive transportation and bonding bills.
“This is not about the next couple of weeks or the next couple of years,” she said. “This is about being leaders for a very long time.”
The key parts of the agreement are contained in several bills acted on by the House and Senate:
• health care reform (HF3924/SF3780*), sponsored by Rep. Thomas Huntley (DFL-Duluth) and Sen. Linda Higgins (DFL-Mpls);
• omnibus supplemental budget bill (HF1812*/SF3813), sponsored by Rep. Lyndon Carlson (DFL-Crystal) and Sen. Richard Cohen (DFL-St. Paul);
• omnibus tax bill (HF3149*/SF2869), sponsored by Rep. Ann Lenczewski (DFL-Bloomington) and Sen. Tom Bakk (DFL-Cook); and
• second bonding bill (HF4072*/SF3815), sponsored by Rep. Alice Hausman (DFL-St. Paul) and Sen. Keith Langseth (DFL-Glyndon).
Budget agreement OK’d
The hard part may be out of the way.
A plan to resolve the state’s projected biennial budget deficit was approved 115-19 by the House and 56-11 by the Senate. But legislative leaders warned what is discussed a year from now could be much more painful.
The state’s current biennial budget deficit of about $1 billion — up from the $935 million projected in the February forecast — is going to be resolved by a mix of budget reserves, cuts and shifts.
Rep. Lyndon Carlson (DFL-Crystal), who co-sponsors HF1812 with Sen. Richard Cohen (DFL-St. Paul), said the agreement calls for $500 million to be taken from the state’s $653 million budget reserve, and $355 million in cuts are to occur. Another approximately $30 million is to come from accounting shifts. Additionally, the omnibus tax bill (HF3149) includes $109 million from closing a tax loophole some foreign-operating corporations use to bypass state tax law.
The state’s $350 million cash flow account would preserved.
Gov. Tim Pawlenty indicated he would sign the bill.
Senate Majority Leader Larry Pogemiller (DFL-Mpls) said the projected 2010-11 biennial deficit is somewhere between $1 billion and $2 billion.
Bonding bill phase II part of end-of-session agreement
Bonding bill phase II totaling $105.5 million supporting the Central Corridor, a new Lake Vermilion State Park and a new building on the Minneapolis Veterans Home campus was passed in the waning hours of the 2008 legislative session.
Rep. Alice Hausman (DFL-St. Paul) shepherded the first bill (HF380) totaling $825 million in general obligation bonding earlier in session, and sponsors this bill along with Sen. Keith Langseth (DFL-Glyndon). The bill, HF4072, passed the House 107-26 after passing the Senate earlier in the evening 50-17. It is expected to be signed by the governor.
Although the governor showed early support for the Central Corridor project, it was among the $208 million in proposals receiving a line-item veto from the first bonding bill. Both the state park and the veterans home project are priorities for the governor, and were key to a successful end to the legislative session.
Hausman said the projects should be considered an extension of the original bonding bill, and when totaled up, this session’s projects come in under the 3 percent of General Fund spending limit, generally considered the threshold for bonding.
Projects in the bill are:
• $70 million for the Central Corridor transitway;
• $20 million to acquire land for Lake Vermilion State Park;
• $10 million for demolition and construction of 100-bed nursing facility on the campus of the Minneapolis Veterans Home;
• $3.4 million for capital asset preservation and replacement; and
• $2 million for removal and replacement of the old Cedar Avenue bridge in Bloomington to be used by bicyclists and foot traffic.
LCCMR bill sent to governor’s desk
A bill that would appropriate $23.4 million for a variety of environment and natural resources projects is on its way to the governor’s desk.
SF2492 comprises the recommendations of the Legislative-Citizen Commission on Minnesota Resources. The commission makes recommendations annually on appropriating money from the Environment and Natural Resources Trust Fund, which it derives from lottery proceeds. Rep. Jean Wagenius (DFL-Mpls) and Sen. Ellen Anderson (DFL-St. Paul) are the sponsors.
The House passed the bill 120-13 as amended by a conference committee. The Senate passed it 67-0 a short while earlier.
The conference committee removed a $50,000 Eurasian water milfoil study provision that had been amended into the bill by Rep. Al Juhnke (DFL-Willmar) in the House Finance Committee. Senate conference committee members objected to the provision.
This year’s funding package includes 37 individual appropriations for more than 70 projects. Broken down by category, the funding includes: $16.3 million for land and habitat projects; $3.5 million for water resources projects; $2.4 million for natural resources information projects; $1.1 million for environment education projects; and $155,000 for the state’s emerging issues account.
A full list of the approved projects is available at the LCCMR’s Web site.
A step torwards property tax reformOne piece in resolving the state’s projected $935 million biennial deficit was a negotiated tax bill.
Described by House sponsor Rep. Ann Lenczewski (DFL-Bloomington) as a bill that personifies compromise, HF3149 passed the House 129-4, and later that night the Senate 56-11, where Sen. Tom Bakk (DFL-Cook) is the sponsor. It awaits action by the governor.
Property tax relief is the core of the bill. In the end, the governor got his three-year cap on property tax levies; the House and Senate achieved $130 million in property tax relief, and cities and counties will see an increase in local government aid.
“We take a big step toward a property tax based on your ability to pay,” said Rep. Paul Marquart (DFL-Dilworth), chairman of the House Property Tax Relief and Local Sales Tax Division. He said an estimated 70,000 property owners in the state could see some relief.
The Mall of America was before the Legislature seeking money for an expansion. While there is no direct state aid for the project, by reconfiguring and expanding the Tax Increment Financing district in which the mall is located, the net effect is a three-year extension offering a $21 million subsidy. In addition, the bill allows for the City of Bloomington or the state to back any revenue bonds that could be needed for a proposed parking facility, upon meeting certain criteria, including generating state and local tax revenue of more than $50 million annually.
The bill contains several business subsidies, including retention of the governor’s Job Opportunity Building Zone program, which is designed to help bring businesses to Greater Minnesota.ram, which is designed to help bring businesses to Greater Minnesota.