Dear Neighbor,
The House is in the midst of bringing to the floor for votes its series of 11 omnibus bills which, together, comprise our plan for the state’s next two-year budget. By day’s end, four bills are expected to have come up for votes of the full body and the remaining seven are set to follow next week.
Here is a summary of the bills we have taken up so far:
Taxes
The House on Thursday first approved H.F. 4, a bill providing $1.35 billion in tax relief over the next two years. The single-largest item in the bill is a $270 million reduction in the state tax on Social Security income.
The House’s tax bill is one component of our “Minnesota Way” approach to the overall budget process. House Republicans are proposing a budget that is not only fiscally responsible, but also provides $1.35 billion in tax relief to Minnesotans. The focus is on middle-class citizens, and everyone from seniors on Social Security, to people with college loans, families with children in daycare and Main Street businesses would see tremendous benefits through the House plan.
I mentioned some of these in last week’s email, but here is a refresher on key provisions in the bill:
- $203 million to reduce the extra state property tax on small businesses, exempting the first $200,000 in property value from the extra tax on businesses and freezing its automatic inflator.
- $35 million going toward modifying the child and dependent care credit. A family of four with childcare expenses would be estimated to receive $660 in relief.
- More than $125 million would go toward addressing college affordability.
- $42 million to reduce the burden agriculture land owners pay for school bond referendums.
- $100 million in direct property tax relief for homeowners and renters.
- Full funding for Local Government Aid/County Program Aid at current levels.
Provisions I authored which are in the bill include one to increase and expand the state’s education tax credit for public, private and home school students, and another which benefits owners of farmland by clearing up confusion in current law so that farmers are allowed to get agricultural homestead tax treatment even if they exercise common estate tax planning techniques.
Environment and Natural Resources
The House on Thursday also approved an omnibus bill (H.F. 888) which pertains to the environment and natural resources. The bill streamlines environmental review, reins in government spending through agency efficiencies, and protects farmers and landowners from government over regulation. The bill works to improve government agency transparency through reforming the funding process of the Minnesota Pollution Control Agency by requiring more detail on where and how efficiently funds are being used, and by reforming the permitting process of the Department of Natural Resources and the MPCA.
Transportation
This afternoon, the House is taking up H.F. 861, which provides the framework for a 10-year, $6 billion increase in transportation funding without raising the gas tax, metro sales tax or increasing license tab fees. This includes $2.1 billion toward our transportation needs over the next two years alone, with an emphasis on roads and bridges.
Key points include:
- Added transportation funding is achieved by capturing revenue from existing auto-related sales tax streams including the sales tax from auto parts and rental cars, as well as the motor vehicle lease tax and dedicating them to a newly established Transportation Priorities Fund for roads and bridges.
- In addition to increased funding for counties and municipalities, this bill would fund the entirety of MnDOT’s local bridge list (97 bridges) and fund $25 million for the successful Small Cities Assistance Program. Key highway infrastructure receives $300 million in one-time Corridors of Commerce funding for Fiscal Year 2018.
- Greater Minnesota transit will receive more than $2 million in increased funding.
K-12 Education
The full House also today could discuss H.F. 890, a K-12 finance bill which builds on last biennium’s historic investment in our students and schools. It combines $1.1 billion in increased funding with reforms, targeting dollars toward proven early learning initiatives that give families educational choice. The bill also advances policies that improve student learning by keeping the best teachers in the classroom.
Top provisions include:
- The $1.1 billion funding increase to the K-12 budget.
- Over $10 million in additional funding which I authored for school districts with higher than usual transportation costs. District #742 will receive an extra $333,000 per year as a result of this proposal.
- $22 million toward a new, targeted academic achievement initiative that funds before school, afterschool and summer programs to help low-income kids succeed who are falling behind their grade-level peers academically.
- More than $300 million for proven early learning programs.
- $40 million for Enhanced School Readiness funds to replace Voluntary Pre-K in 74 school districts, including Saint Cloud.
- Approximately $2.3 million to implement the Professional Educator License and Standards Board to replace the troubled Board of Teaching, following recommendations by the OLA and Teacher Licensing Work Group.
- Continues GOP-led efforts to strengthen teacher recruitment and retention, especially in areas with teacher shortages.
- Keeping the best teachers in the classroom by repealing the last-in, first-out LIFO default in statute to give schools and local bargaining units more flexibility to negotiate mutually beneficial staff retention agreements. This aims to helps attract and keep new, effective and more diverse teachers in the classroom, while allowing districts to consider additional criteria beyond seniority.
Look for more budget news soon as we work our way through the House’s remaining omnibus finance packages.
Sincerely,
Jim