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Legislative News and Views - Rep. Ben Lien (DFL)

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Legislative Update - March 11, 2016

Friday, March 11, 2016

Greetings from the Floor,

The 2016 legislative session began on Tuesday at noon. Although construction is ongoing in the Capitol, we are holding our sessions in the House chamber (the Senate is holding its sessions in the new Senate Legislative Office Building across from the Capitol).  The State Office Building is still fully open and I encourage people to meet with Legislators in their offices at either the State Office Building or the Senate Legislative Office Building during the session rather than trying to navigate the construction zone around the Capitol.

The first order of business for the Legislature was a proposal to extend 26 weeks of unemployment benefits to laid-off Iron Range workers.  The reason for the prolonged layoffs on the Iron Range is largely because steel prices are very low right now due to illegal dumping of foreign steel into the United States. Gov. Dayton has met with President Obama and his administration to call for an end to illegal steel coming into the United States.  While the Senate passed an extension of unemployment benefits this week, the House did not as a cut to employer Unemployment Insurance (UI) taxes was attached to the bill in the House.  The UI Trust Fund had a balance of $1.66 billion at the end of 2015.  It is projected to have a balance of $1.8 billion at the end of 2016.  The UI tax cut under the proposal is based on a formulaic cap for the UI Trust Fund balance derived from factors such as total wages paid in the state, UI benefits paid out in the previous year, inflation, wage growth and population growth.  The cap would leave a trust fund balance of $1.617 billion at the end of 2016, with the rest being rebated to employers in 2017 through lower UI taxes.  One problem with all of this is that the first tax cut under the bill is based on the UI Trust Fund balance at the end of 2015 compared to 1% of only the total wages paid in the state in 2014 (it does not take into account the other factors of the overall tax cut); the difference would be rebated to employers through lower UI taxes in 2016.  1% of total wages paid in the state in 2014 was $1.39 billion.  This would result in the UI Trust Fund balance being below the bill’s established cap for 2016 and likely lead to UI taxes going up in 2017. 

Another problem with the House proposal for the extension of unemployment benefits is that it would set a very bad precedent of attaching riders to emergency response bills.  This was the biggest point of contention and drew a rejection of the proposal from Iron Range Legislators, local Iron Range Chambers of Commerce, Iron Range communities and people.  I do think we should look at UI tax relief for employers if the trust fund is carrying an unnecessarily large balance, but attaching it to an emergency response bill is not the way to do it.  I have to say that I find the Iron Range to be very courageous in all this by rejecting a proposal that would give relief to them because of the bad precedent it would set for future emergency response action in Minnesota.  I understand the pain being felt on the Iron Range right now and putting the state ahead of themselves is very commendable. 

On Tuesday night, the state Chamber of Commerce held its annual session kick off dinner to discuss session priorities of the governor and four legislative leaders.  Mayor Williams, Councilman Hulett and Elly Peterson of the Fargo-Moorhead-West Fargo Chamber joined Sen. Eken and I at the event.  It is always an enjoyable time to hear what state officials and business leaders want to see get done. 

On Wednesday night, Governor Dayton delivered his State of the State address at the McNamara Alumni Center at the University of Minnesota.  The governor highlighted Minnesota’s current budget picture and the caution we must have in moving forward with investments and tax cuts this year.  It is important we focus on one time appropriations and a tax bill that will help grow the economy, specifically for working people and families. The governor also spoke about his Capital Investment bill and work as of late on water quality.  In his Capital Investment bill, he included $219.7 million in new resources for cities to upgrade water treatment facilities to improve water quality around the state.

I’ve introduced four bills this year pertaining to an exemption of fees and taxes on vehicle sales, license plates, vehicle registration tabs and drivers licensing for 100% service related disabled veterans; funding for Small Business Development Centers to help connect retiring business owners with new entrepreneurs looking to start businesses through succession planning; student loan forgiveness for people who completed a post-secondary degree and work in Greater Minnesota; and Capital Investment resources for a new Clay County solid waste facility.   

This will be a very short, fast-paced session.  I anticipate the Capital Investment and a Tax bills will consume a majority of the Legislature’s time this year.  The first committee deadline is three and a half weeks out and it is a race right now to get all of our bills put together for committee hearings before the first deadline.

Thank You for the Opportunity to Serve,

Ben