2015 Legislative Session Summary
The 89th Legislature convened on January 6th, 2015 with a newly elected GOP House majority working with a DFL Senate and Governor. After 10 years of budget deficits, a nearly $2 billion surplus led to hopes of tax breaks, more money for education, and funding to repair the state’s roads and bridges. Legislative leaders made their priorities known early on, but when the House and Senate adjourned the 2015 Regular Legislative Session on May 18th, many of these key priorities were left on the table.
After weeks of negotiations, the Legislature made a frenzied dash to complete their work on time, passing eight of the ten major appropriations bills on the last day. However, the debate over a few key pieces of legislation was not over. While leaders struck a deal on a number of appropriations bills, Governor Dayton vetoed a $17 billion Omnibus K-12 Education bill that passed both bodies. He also vetoed the Omnibus Agriculture, Environment and Natural Resources bill, as well as the Omnibus Jobs and Energy bill.
After nearly four weeks of post-session negotiations, lawmakers returned to Saint Paul on Friday, June 12th for a special session. With the Capitol’s House and Senate chambers off-limits due to major restoration work going on throughout the building, committee rooms in the State Office Building were converted into House and Senate chambers.
The special session addressed the three budget bills vetoed by Governor Dayton: the K-12 Education bill, the Agriculture, Environment and Natural Resources bill, and the Jobs and Energy bill. Legislators also considered three other measures that failed to pass during the regular session: a $373 million Bonding bill, a Legacy bill that spends dedicated sales tax revenues, and a technical corrections bill. Even after weeks of negotiations and a 16 hour special session, very limited changes were made to the major budget bills.
Although the special session started smoothly, there was some controversy surrounding the Omnibus Agriculture, Environment and Natural Resources bill. Ultimately, all special session bills passed as introduced, and the House adjourned at 1:30 am, with the Senate following closely behind at 2:00 am on Saturday, June 13th.
Below are highlights of the major budget bills that passed this year:
Agriculture, Environment and Natural Resources
The Omnibus Agriculture, Environment and Natural Resources Policy and Finance Bill vetoed by Governor Dayton included more than $860 million in biennial appropriations. The bill provided funding for avian influenza response activities and provided the framework for a pilot project to study industrial hemp. It also included two controversial provisions: an initiative to reduce pollution by increasing buffers along waters around the state and a provision that would eliminate the Minnesota Pollution Control Agency’s Citizens’ Board. The final bill passed during special session was very similar to the one vetoed by the governor, but it includes an additional $4.4 million for avian influenza response as well as the controversial language mentioned above.
Governor Dayton vetoed a $17 billion Omnibus K-12 Education bill that passed both bodies during the 2015 Legislative Session. In his veto letter, the governor voiced concerns that the bill did not invest enough money in education given the state’s large surplus. Additionally, he was disappointed that it did not provide enough new money to cover his top priority, expanded prekindergarten courses at public schools.
While the governor backed away from his demands for universal Pre-K, the revised K-12 Finance bill includes $125 million in additional new money for K-12 funding. Among other things, it includes an additional $17.5 million in scholarships for Pre-K and $10 million for Head Start programs. It also adds an additional $63 million to give schools back-to-back 2% increases. Moreover, it provides $14.5 million in new funds split between per pupil student aid and assistance to schools operated by the Federal Bureau of Indian Education.
The Higher Education bill was the first omnibus bill agreed to and passed by the House and Senate in the closing days of the regular session. Under the agreement reached by the Higher Education conference committee, the University of Minnesota will get an additional $22 million dollars over their base budget, and the Minnesota State Colleges and Universities will receive a total of $100 million additional dollars to hold down tuition. U of M President Eric Kaler noted the school needed an additional $64 million over the next biennium to offset rising costs and continue the 2013 tuition freeze (they requested $127 million in new spending). MNSCU leaders asked for an increase of $143 million. The budget bill includes $166 million in new spending bringing the total higher education budget to $3 billion every two years. Of interest to the medical community is an additional $30 million in new spending to help raise the profile of the University of Minnesota medical school, a key priority requested by Governor Dayton.
The Omnibus Health and Human Services bill appropriates $12.54 billion, about $302 million under base. The bill includes a few substantive changes made to MNsure as well as provisions to cut down on waste and fraud in the system. Additionally, $138 million will be directed toward the state’s nursing homes. Despite a desire by House Republicans to eliminate MinnesotaCare, this change was not included in the final bill. Instead, a task force was set up to look into the future of the program.
Jobs and Energy
The Jobs and Energy bill passed during special session is very similar to the bill passed during the regular session, with a few exceptions. The special session bill includes $11 million for broadband, without money earmarked for any specific city. The special session bill also includes policy language that allows Rochester to use sales tax money for the Destination Medical Center and $5 million in new money to help individuals with disabilities find jobs and prevent homelessness among the mentally ill. Moreover, it provides about $2 million in increased funding for several sectors of the Department of Commerce.
The Omnibus Public Safety Bill provides almost $2.12 billion in General Fund spending for FY16/17, with an additional $111 million going to courts, prisons, and public safety over the next two years. Among other things, the bill calls for a 4% annual compensation increase for judges and court staff, it includes an additional $6.48 million for the Board of Public Defense (which should equate to 36 more public defenders to help reduce caseloads) and $700,000 to expand specialty courts. The bill also provides appropriations for community services, modifies the base funding amount for community corrections, and it provides dollars to develop strategies to combat terrorist recruitment in Minnesota.
The Bonding bill, passed during special session, includes $26.7 million for Capitol restoration and $6.2 million for security upgrades. It contains over $172 million for state highways, local roads, bridges, and railroad crossings. It includes $26.5 million for the University of Minnesota, and $31.9 million for MnSCU buildings. It provides $24.5 million for flood mitigation and $1.75 million for the superfund drinking water program. Additionally, it includes $25.4 million for disaster relief.
In the final minutes of the regular session, a $540 million Omnibus Legacy bill was passed by the House leaving no time for it to get through the Senate. The special session Legacy bill is essentially the same bill and appropriates the $540 million in the following manner:
Clean Water Fund – $228.3 million
Arts & Cultural Heritage Fund – $124.8 million
Outdoor Heritage Fund – $97.8 million
Park & Trails Fund – $89.3 million
Transportation and Taxes
The Legislature and the governor found themselves at an impasse when it came to transportation and taxes this session. House and Senate leaders said they abandoned these two priority issues in order to reach an overall budget agreement and finish the 2015 session on time. The House GOP advocated for at least $1 billion in tax relief and the Senate DFL advocated for a comprehensive transportation and transit bill, including a gas tax and metro area sales tax increase. Ultimately, lawmakers were forced to settle for a “lights on” bill that keeps the Minnesota Department of Transportation and the Met Council running, but no tax bill was passed. However, the Transportation bill does include an additional $30 million over base funding for certain projects across the state.
The Legislature is now adjourned until March 8th, 2016, leaving many questions over what they will be able to accomplish next year in a very abbreviated legislative session. With many
outstanding and major issues left to be addressed (bonding, taxes, and transportation), it looks as if legislators will have their hands full in 2016. Next year also brings another election year – with all state legislators (House and Senate) up for reelection. Stay tuned for what promises to be an exciting year.
The Government Affairs Team
Messerli & Kramer P.A.