Omnibus state government finance bill passed by House, going to governor

Although not one of the larger budget bills, the House and Senate passed a nearly $974 million funding package Monday evening that would fund their operations as well as many other state agencies and boards.

Sponsored by Rep. Sarah Anderson (R-Plymouth) and Sen. Tom Saxhaug (DFL-Grand Rapids), the agreement on HF495/SF888* is about $78.3 million more than what was proposed by the House and $28.6 million below what the Senate initially proposed. The finished product is a $56 million base increase.

The House passed the bill 71-61; the Senate 44-21.

“This bill basically funds the nuts and bolts of state government,” Anderson said.

Saxhaug said the agreement continues to make investments to core functions that people expect from their government.

“This bill is better than it was, but it’s not good enough for a green vote,” said Rep. Sheldon Johnson (DFL-St. Paul).

The agreement calls for a 1.8 percent compensation operating adjustment for many executive branch offices and state boards, including the governor’s office, Campaign Finance and Public Disclosure Board, Minnesota Management & Budget, Revenue and Administration departments and the state’s four ethnic councils.

Among the differences entering the conference committee, the House plan called for a 6.5 percent base reduction to the constitutional offices; the Senate did not. The House also would have reduced most state agency budgets by a small percentage; the Senate generally did not.

Other spending increases in the bill include:

• $14.98 million for the Senate;
• $3 million for maintenance and enhancement of the state’s tax system;
• $2.77 million for the House of Representatives;
• $650,000 for a Healthy Eating through Humanities program;
• $500,000 for the Office of the Legislative Auditor;
• $341,000 one-time operating increase for the state racing commission;
• $300,000 for public television equipment grants; and
• $250,000 for Minnesota Public Radio equipment grants.

The agreement calls for a two-year repeal of the state’s political contribution fund — including the ability for individuals to get a $50 refund for specific political contributions.

“Is it really a priority of the state to spend public tax dollars on politician’s campaigns?” Anderson said. “That’s what the PCR program does.”

Rep. Melissa Hortman (DFL-Brooklyn Park) spoke against the change, saying it “empowers corporate special interests (and) it disempowers regular citizens.”

The agreement also calls for a $36 million one-time reduction in state contribution to the Public Employees Retirement Association for Minneapolis pension reimbursement. Earlier this year, Anderson said an actuarial report indicated that reducing the state share would still keep the fund on solid footing, in part, because the employer share doesn’t change and less overall money is needed for the fund.

Potential state audit changes

Among the policy provisions, the agreement would direct “the Office of the Legislative Auditor shall report on the efficiency of the examinations conducted by the state auditor” and report back to the Legislature by Jan. 15, 2016. It would also allow a county, beginning Aug. 1, 2016, to have its annual financial audit performed by the state auditor’s office or a private CPA firm, a provision that State Auditor Rebecca Otto spoke passionately against early Monday in conference committee.

Anderson said 59 of 87 counties are required to have their audit done by the state auditor. “In fact, counties like Hennepin County and Washington County, some of the largest counties, are not even required to be audited by the state auditor. This is not a new concept; it’s extending that courtesy to the other counties in the state.”

She also said county officials have expressed frustration with currently received services, including higher costs and the length of time it takes to receive audit results.

Sen. Torrey Westrom (R-Elbow Lake) said county officials in his district have indicated the change could save them “tens of thousands of dollars. … This will be healthy for our counties as an option.”

“I feel this would set a bad precedent moving toward privatization,” said Senate President Sandy Pappas (DFL-St. Paul). A former local government committee chair, she said she’d never once had a county come forward with concerns about the auditor. “Who should be responsible for watching the public dollar?”

Others against the idea spoke about concerns of the independence of the private auditor. “When you’re the one paying the bill, sometimes you can get sort of the opinion you’re looking for,” said Rep. Joe Atkins (DFL-Inver Grove Heights).

Other policy provisions

“We have some great reform measures,” Anderson said. Among them are:

• each year, the legislative auditor would need to submit to the Legislative Audit Commission a list of three to five general economic development incentive programs proposed for review;
• revamping three of the state’s four ethnic councils, including establishing membership regulations, have the Legislative Coordinating Commission appoint an executive director stating council duties and requiring annual reports to the Legislature showing “measurable outcomes achieved in the council's current strategic plan to meet its statutory duties, along with the specific objectives and outcome measures proposed for the following year;”
• the Legislature determines that “the Honor and Remember Flag is an appropriate symbol that acknowledges the selfless sacrifice of those members of the United States armed forces;
• providing qualified military members, their spouses and retired military members who honorably left service within the previous two years to receive expedited, temporary licenses — with durations of six to 12 months — in the areas of optometry, podiatry, dietetics and nutrition, family and marriage therapy, professional counseling, professional clinical counseling, alcohol and drug counseling and barbering;
• the Department of Veterans Affairs must verify that a business is owned by a veteran before the Department of Administration certifying the business as a veteran-owned small business;
• a program is to be established to provide a bonus to eligible National Guard members who complete training that would result in the award of a new military occupational specialty or Air Force specialty code in specialties identified by the adjutant general to be necessary for the enhanced readiness of the Minnesota National Guard; 
• a “Healthy Eating, Here at Home” program would be established to provide incentives for low-income Minnesotans to use federal Supplemental Nutrition Assistance Program benefits for healthy purchases at Minnesota-based farmers' markets;
• Hennepin County would be permitted to prevent condemnation of county property by a railroad company through eminent domain if the county determines public safety or first responder access would be negatively impacted as a result; and
• a number of racing commission policy and technical changes, including eliminating the requirement for 25-week season that begins before the first Saturday in May and raising the ceiling on fines related to horse racing of commission rules from $2,000 to $5,000.