Dear Friends and Neighbors:
Now that the 2013 legislative session has concluded, I would like to share with you my assessment of this year’s successes, some thoughts on missed opportunities, and my hope for the next session.
This session can best be characterized as one of significant progress and accomplishments in moving Minnesota forward after years of political gridlock. It was a session which resulted in achievements at all levels of government, as we seek to reclaim the title of the state that works. We passed a balanced budget free of shifts, gimmicks, and borrowing. We provided direct property tax relief and indirect property relief that will be realized by adequately funding Local Government Aid (LGA) which should put the brakes on local property tax increases. We made a renewed commitment to our educational systems (Early Ed, E-12 and Higher Ed), and we focused on job creation, economic development and quality of life investments that will grow our economy.
Not everyone will agree with everything that passed, but we made hard decisions after years of kicking the proverbial can down the street.
A crowning achievement was passing the marriage equality bill allowing gays and lesbians to marry. In 1997 (as a freshman member of the House), I was one of only a few legislators who voted against the “Defense of Marriage Act” (DOMA). A short sixteen years later, the constitutional amendment banning same sex marriage was defeated by the voters, and now gays and lesbians have the same right as heterosexual couples to marry the person they love.
The following is my take on some of the other issues that came before the 2013 Legislature.
BUDGET
Years of deep budget cuts have caused Minnesota to lurch from one budget crisis to the next, limiting our ability to adequately invest in education, infrastructure, and other crucial priorities. This session, we put an end to roller-coaster deficits with a fair and balanced budget that erased a $627 million deficit, put Minnesota on sound fiscal footing, and delivered key investments for a stronger middle class.
As a member of the House Tax Committee, I listened to hours of testimony from hundreds of Minnesotans on Governor Dayton’s budget recommendations. His proposal to lower and broaden the sales tax was dropped after fierce opposition from the business community. The Governor abandoned much of that part of his plan, but what was included was the creation of a 4th tier income tax and an increase in the tobacco tax which provided much of the revenue that was needed to fund education, transportation, public safety, environmental protection, health and human services, etc.
EDUCATION
A decade of disinvestment in education was reversed. In the past, over $2 billion was borrowed from our schools to deal with the state’s budget problems. This year the Legislature adopted a plan to accelerate the paying back of our schools. We are now projected to erase the remaining debt by 2014.
A significant commitment was made to our state’s littlest learners by providing every Minnesota kindergartener access to free all-day kindergarten and creating an early childhood scholarship program that will give thousands more youngsters access to high-quality early learning opportunities in preschool and child care.
Recent budgets have slashed higher education funding, leaving students to pick up the tab for skyrocketing tuition, and burying families in debt. This session, we invested an additional $250 million in higher education and directed those resources primarily to tuition and debt relief for middle-class students—including a tuition freeze at our public postsecondary institutions.
PROPERTY TAX RELIEF
Property taxes have more than doubled over the last decade with increases falling hardest on middle-class, seniors, and small businesses. In Highland Park and Macalester-Groveland, the increases have been extremely difficult for taxpayers. To combat that trend, the Legislature enacted a major property tax relief plan. Included in the Tax Bill is direct relief to homeowners and renters. More than 315,000 homeowners (75% of filers) will see an increase in their Homestead Credit Refund (“Circuit Breaker”). More than 116,000 additional homeowners will be eligible for a refund. Approximately 66,000 filers for the Renters Credit (including elderly and disabled renters) will see a bigger refund, and 10,000 additional renters will qualify.
In addition, we restored the state’s commitment to cities, counties, and school districts in order to lessen their reliance on property taxes to fund needed services. The Legislature made significant increases in Local Government Aid (LGA) after years of cuts. Now, it’s up to our local units of government to keep property taxes down. Mayor Coleman has publically stated that the city won’t increase its levy next year because of increased LGA funding.
JOBS AND ECONOMIC DEVELOPMENT
This session, one of the Legislature’s major priorities was in the area of job creation and economic development. For example, by investing $30 million in the Minnesota Investment Fund we will be able to bring new businesses to our state, help existing businesses expand, and in the process, create new jobs for Minnesotans.
A major tax cut for Minnesota’s employers was also provided. Unemployment insurance taxes were cut, saving Minnesota employers $347 million to invest in their businesses and our economy.
The Legislature chose to make a sizable investment in the Rochester area that will spur billions of dollars of private investment by the Mayo Clinic. While the investment was not without justifiable criticism, the Legislature concluded that the Destination Medical Center was too important to Minnesota.
While I tend to oppose corporate subsidies, there were provisions in the Omnibus Tax Bill that created a Tax Increment District for the Mall of America using fiscal disparities. This is setting a dangerous precedent. Also in the bill was backup funding for the Minnesota Vikings if the e-pull-tab revenue doesn’t materialize. I voted against the Vikings Stadium bill in part because of this shaky financing scheme and an expansion on gambling. While I support the thousands of jobs that will be created with both of these projects, we need be more judicious in our approach to economic development, so we’re not picking winners and losers while the taxpayers are being asked to pay for what the private sector can and should be contributing.
TAX REFORM/TAX FAIRNESS
Over the past decade, middle-class Minnesotans have been financially squeezed while others have enjoyed the protections of an unfair tax system. Right now, the richest 2% of Minnesotans earn an average $617,000 per year, but they pay a lower percentage of their income in state and local taxes than middle-class Minnesotans. That was changed this session by asking the wealthiest to pay just 2% more in income taxes in order to make needed investments in key areas such as education and job creation.
Likewise, for years, corporate tax loopholes have given some large businesses an unfair advantage, sheltering them from paying some state taxes. This session, we closed those corporate loopholes.
Looking forward, we must continue to address the bread and butter issues vital to Minnesota’s future. It is my hope that in the upcoming session we correct some of the problems that were created by the Omnibus Tax Bill, including the expansion of the sales tax to certain types of warehouses in Minnesota. This was a Senate provision that was agreed to in conference committee. The Legislature didn’t provide due diligence with this 11th hour agreement, and I fear some of our warehouses will move out of Minnesota unless we repeal this tax. This warehouse provision is not scheduled to go into effect until 2014, so hopefully we’ll have the opportunity to repeal it during the next session.
PUBLIC SAFETY
As chair of the Public Safety Finance and Policy Committee and as a member of the Judiciary Committee, I was proud that we were able to adequately fund agencies and programs that enhance public safety.
We increased funding for the Department of Corrections (DOC) making our prison institutions safer for our correctional officers, staff, and offenders in custody. We increased funding to provide more treatment for sex offenders and offenders with chemical dependency problems. We made investments to the Bureau of Criminal Apprehension (BCA) to update our crime labs and data technology, some of which is 40 years old and increasingly obsolete.
After years of cuts, we made bigger investments to the Courts, Legal Aid, and the Public Defense Board and increased funding to battered women’s and sexual assault programs and youth intervention.
Unfortunately, the Legislature made little progress on gun violence prevention. After days of hearings on gun control bills, I authored the Gun Violence Prevention Act which included universal background checks and giving more authority to law enforcement to withhold a permit to purchase a pistol or military-style assault weapon if the applicant was a danger to self or others. The bill never reached the House floor for a vote. Gun violence will not go away, and 80% of Minnesotans support background checks.
HEALTH AND HUMAN SERVICES
After deep cuts to the health and human service budget in past years, the 2013 Legislature took significant strides to reverse this trend working to make health care more affordable for families, prioritizing quality care for our seniors, children and Minnesotan with disabilities.
The Health and Human Service’s budget was far from perfect and some programs and services that protect the most vulnerable in our society did not get needed funding.
We did create the Minnesota Health Insurance Exchange (MNSure) which was required under the Affordable Care Act providing health insurance to cover 35,000 previously uninsured Minnesotans and which will save billions of dollars. I hope that this is the first step to a single-payer system. We provided more resources for mental health treatment, nursing homes workers, MFIP housing grants, increased reimbursement rates for MA dental providers along with many reforms to our health care system.
We began an innovative program to deal with children who are being sexually trafficked. I was proud to be the chief author of a sex-trafficking bill that will provide training for law enforcement, prosecutors, and other interveners to assist victims in getting housing and services and stay out of the criminal justice system. We provided a grant to Ramsey County because of the innovative work being done by the Ramsey County Attorney’s Office to ensure that children who are trafficked get services, not jail.
ENVIRONMENT/ENERGY
Renewable energy development and protecting our environment are priorities for me, and we passed many provisions to help secure Minnesota’s clean energy future and help create clean energy jobs. For instance, we enacted a solar energy standard which requires each public utility to generate enough electricity generated by solar energy so that by the end of 2020, at least 1.5% of the utility’s total retail electric sales are generated by solar energy. Further, we established an energy goal for Minnesota that by 2030, ten percent of the retail electric sales in Minnesota be generated by solar energy.
We directed Xcel Energy to operate a program to provide solar energy production incentives for solar systems with a capacity of no more than 20 kilowatts and to develop a plan to operate a community solar garden program. While I was pleased with this initial progress, clearly there is more to be done in the area of renewable energy promotion. I look forward to continuing to work on this issue in the future.
One major environmental concern this session was frac sand mining, and we took reasonable steps to address it. Restrictions on mining were enacted, including in certain areas of the state that are within one mile of a designated trout stream. We also directed the Environmental Quality Board to develop model standards and criteria for this activity, and these standards and criteria can be used by local units of government in developing their own ordinances.
I remain concerned that copper-nickel mining is moving forward near the BWCA which could have a detrimental impact to the environment in that area as well as on the watershed to Lake Superior.
CAPITAL INVESTMENT
Unfortunately, we didn’t pass a $700 million bonding bill to make critical investments in the infrastructure at our universities, prisons, clean water, housing and transportation. With low interest rates, we could have put thousands of people in the construction field to work while improving our state. With the small bill that we did pass, we bonded for necessary improvements to the crumbling capitol and provided funding for facilities for our veterans.
The second year of the biennium is dedicated to capital investments, so I’m anticipating that most of the projects will eventually pass in the 2014 bonding bill.
UNFINISHED BUSINESS
In addition to our failure to pass gun control measures and a strong bonding bill, the Legislature failed to pass a comprehensive anti-bullying bill leaving us in the national cellar in this area of protecting children. We didn’t adequately address transit, leaving us further behind other metropolitan areas. We didn’t increase the minimum wage which remains unacceptably low.
Still, we made progress after years of gridlock and ideological stagnation over taxes. Erasing the deficit and investing in our future will make Minnesota stronger and more competitive. Thank you for the privilege of serving you in the Minnesota Legislature. Please always feel free to contact me whenever I can be of assistance.
Sincerely,
Michael Paymar
State Representative 64B