Final three omnibus budget bills merged into one, headed to House Floor

REFILED April 25, 2016: The amendment to the state government finance portion of the bill regarding the Veterans Preference Act was not consensus by all parties, as originally reported. The Department of Veterans Affairs is not supportive of the amendment.

Will Monday be the final merger day on the House Floor?

Wrapping up three days of hearings, the House Ways and Means Committee approved the final three House supplemental budget bills on Thursday — health and human services, state government finance and public safety — merged them into one and sent HF3467 to the full body.

The bill joins HF2749 (education and higher education) and HF3931 (agriculture, environment and jobs) as bills that are expected at some point to be merged into one package. The Senate, too, is putting all its financial proposals into one package.

HF2749 is on Monday’s Calendar for the Day.

Public Safety

Heading into the hearing, the omnibus public safety bill, HF291, was relatively low-key, with a $1 million transfer from MINNCOR Industries to the General Fund for Fiscal Year 2017 and three relatively non-controversial policy provisions:

• increasing penalties for driving unlicensed if in the course of driving without a license, there is a collision that results in substantial bodily harm or someone’s death or someone is convicted of driving without a valid license for at least a third time (HF1948);
• increasing the fine for failure to stop for school bus displaying its stop arm and illegally passing on the right side of a school bus flashing its amber lights (HF3385); and
• allowing sensory testing services to possess and serve alcohol as a part of their business (HF3369).

An amendment successfully offered by Rep. Tony Cornish (R-Vernon Center), and orally amended by Rep. Jim Knoblach (R-St. Cloud), the committee chair, changed that.

It would direct the Department of Corrections to “complete negotiations by January 1, 2017, of a contract to operate and purchase or lease to own an existing prison facility with a capacity of at least 1,500 beds located in Appleton, Minnesota.”

WATCH Full video of Thursday's hearing on YouTube

The contract would require legislative approval before final execution.

Rep. Debra Hilstrom (DFL-Brooklyn Center), who said the bill as a whole “has nothing in here to improve public safety,” was unsuccessful with her amendment to ban private prisons in Minnesota. It was defeated on a 13-11 roll-call vote with Rep. Rod Hamilton (R-Mountain Lake) joining DFLers in voting for the amendment.

Rep. Tim Miller (R-Prinsburg) sponsors HF3223 that, as introduced, would allow the department to house inmates in privately owned correctional facilities. The issue was approved by the House Public Safety and Crime Prevention Policy and Finance Committee at a heated meeting last month.

At issue is current and projected overcrowding of the state’s prisons.

Those correctional facilities now hold about 560 inmates more than capacity. The gap is forecast to exceed 1,200 inmates by 2022 if everything stays the same in terms of statutes and sentencing. To help with the current situation, the department now leases about 475 beds at county jails.

The House Ways and Means Committee begins its April 21 hearing in a packed room where the health and human services, state government finance and public safety omnibus bills were to be heard. Photo by Paul Battaglia

The Prairie Correctional Facility was closed in February 2010 following declining demand from Minnesota and other states. However, the prison has been maintained since its closure. A plan has been offered whereby Corrections Corporation of America would continue to own the facility, but unionized state employees would handle operations.

Gov. Mark Dayton previously said he does not support state involvement with the Appleton prison, and has suggested the state should instead focus on ways to reduce its prison population.

One possibility could come from changes made earlier this year by the Sentencing Guidelines Commission.

In a January 2016 report, the commission recommended creation of enhanced crimes for possession of drugs in quantities significantly greater than existing first-degree thresholds. It also recommends that the Legislature reduce possession of a trace amount of a controlled substance from a felony to a gross misdemeanor.

Without legislative action, the changes will take effect Aug. 1, 2016.

A Cornish-sponsored bill to reject the changes (HF2888) awaits action by the full House, but its companion, SF3070 sponsored by Sen. Bill Ingebrigtsen (R-Alexandria), awaits action by the Senate Judiciary Committee.

Health and Human Services

Sponsored by Rep. Matt Dean (R-Dellwood), the omnibus health and human services finance bill, as amended, would not increase the total health and human services appropriation, but proposes new spending, which would be entirely covered by shifted funds – primarily by ending MNsure.

HF3467 would fully repeal MNsure subject to obtaining a federal waiver, and begin transitioning Minnesota citizens onto the federal Healthcare.gov website starting with 2017 enrollments. The bill would also halve MNsure’s tax on the value of premiums for private policies to 1.75 percent starting Jan. 1, 2017, with an option to buy back the withholding if benchmarks are met.

By repealing MNsure, Dean successfully amended the bill to shift nearly $20 million during Fiscal Year 2017, and approximately $40 million for the ensuing biennium, to other HHS spending. The bill previously proposed a shift of $13 million in Fiscal Year 2017 and $27 million in the ensuing biennium.

Additional funding would be used for a wide range for new projects, including several funding initiatives dealing with substance abuse and integrated health care.

Another of Dean’s amendments to the bill would prevent other state departments from being allowed to make funds available for MNsure after July 1, 2016, unless authorized by a new law. He said the amendment was aimed at preventing several fund transfers to MNsure in recent years, including one for $20 million that should have had required explicit legislative approval.

Rep. Tina Liebling (DFL-Rochester) criticized the bill as simply seeking to end or disrupt MNsure by any means possible.

“It’s a bill mainly meant to kill MNsure, kill it again, hit it with a bomb, throw it in a hole and cover it with water,” Liebling said.

Rep. Greg Davids (R-Preston) countered: “I’m not sure how you can kill something that’s already dead.”

He said MNsure is a failure that has struggled with technical issues without effectively providing services to Minnesota residents despite over $300 million in public funding.

“What it has done to Minnesota is unconscionable,” Davids said.

Additionally, the bill would add $6.4 million in Fiscal Year 2017 and $14 million in the 2018-19 biennium for grants to provide funding for the Minnesota and Medical Education and Research Costs program — which helps fund clinical medical education — and for family medicine residency positions outside of the seven-county Twin Cities metropolitan area that train physicians who will practice in Greater Minnesota.

Liebling also criticized the bill for lacking any new funding for several issues heavily pushed this session, including:

• additional staffing to address safety concerns at the Minnesota Security Hospital in St. Peter and the Anoka-Metro Regional Treatment Center;
• wage increases for workers who care for elderly and disabled Minnesotans under the 5 Percent Campaign, which is now called the Best Life Alliance; and
• funding increases for foster care families who are facing increased costs.

Dean said the St. Peter facility received increased staff funding last year, and that health care issues in Minnesota are complex and not all can be solved with money.

In other areas, the bill would also repeal child care unionization legislation passed in 2013.

State Government Finance

Commissioner salary reductions, hiring freezes and limited travel and advertising expenses are all part of the omnibus state government finance bill that calls for a $9.5 million spending reduction. It was approved, as amended, on a 15-9 roll-call vote along party lines.

Rep. Sarah Anderson (R-Plymouth), the sponsor of HF3168, said it provides a way to make state government more efficient. Senate targets call for a $30 million increase in state department and veterans spending.

Appropriations to executive agencies, including constitutional offices, would be reduced by a combined $6.5 million. To the “greatest extent possible,” reductions would come from 5 percent salary reductions for commissioners, deputy commissioners and assistant commissioners; a hiring freeze; reduction in nonessential travel and a 10 percent reduction in advertising expenses.

Five departments would not take a hit: Corrections, Human Services, Military Affairs, Public Safety and Veterans Affairs.

An 80 percent reduction in the Senate carryforward account would generate $3.14 million.

The hiring freeze would prohibit state employers — not including the Minnesota State Colleges and Universities system — from hiring permanent or temporary employees before July 1, 2017, with exceptions carved out for a work-study position, or a position “necessary to perform essential government services.”

An Anderson-offered amendment would amend the process for removing a veteran from government employment under the Veterans Preference Act, including the time when a hearing would be requested and how an arbitrator would be determined to hear the case rather than a three-person panel. The amendment, she said, is a “consensus reached between the cities and counties and different entities, local units of government.” However, the Department of Veterans Affairs does not support the amendment.  

Among issues raised by bill opponents was Rep. Lyndon Carlson Sr. (DFL-Crystal) expressing concern about who would define essential employees and the elimination of a state campaign finance subsidy program for political candidates.

It is anticipated that $2.67 million would be gained from a suspension of the public subsidy program under which people can check a box on their tax return to have $5 go to help candidates for state office pay campaign expenses.

As for additional spending in the bill, a onetime $500,000 appropriation would go to MN.IT Services to perform a study of cybersecurity across state government. In his supplemental budget, the governor is requesting $20.2 million to enhance cybersecurity across state government.

Rep. Jean Wagenius (DFL-Mpls) was critical of the omission, saying, “Cyberattacks are not going to stop and wait for a study.”

“I’d rather do the study than dump in money and hope for the best,” said Anderson, who wonders why the administration’s request wasn’t put forth last year when state budgets were being established.

House Public Information Services assistant editor Mike Cook and writer Josh Moniz contributed to this story.