Minnesota House of Representatives
Public Information Services


Public Information Services Menu

Omnibus bills provide framework for the state's biennial budget plan

By Ricky Campbell
House Photography file photo

At the beginning of the state’s two-year fiscal cycle, the first year of the legislative session is traditionally a “budget year.” It’s a lengthy process, but it’s one that requires a significant number of hands to craft the final document. In Minnesota’s divided government — a DFLer occupies the Governor’s Mansion and Republicans control both chambers of the Legislature — it demands both teamwork and a clash of ideals.

The massive omnibus finance bills currently making their way to the House Floor are part of the process and they are the culmination of the majority party’s spending priorities for the next biennium.

While state government is funded by revenues — taxes and fees — and has both required expenditures and pet projects, it’s a far cry from how a typical Minnesotan family earns and spends its money.

Yes, the state has vehicles to pay for the lights it turns on, but instead of planning a trip up north to the cabin, state government must somehow plan for a dynamic, changing economy, along with programs, services and infrastructure many Minnesotans rely on.

It’s far more complex, Rep. Jim Knoblach (R-St. Cloud) contends.

“One of the differences we have, I think, when you look at the budget forecast, it’s based on what the law is,” said Knoblach, who chairs the budget-gatekeeping House Ways and Means Committee. “That is very different from the way families do their budgets.

“If we didn’t change one law or appropriate one thing between now and the end of session, we’d still have pretty significant increases built in,” he said.


The forecast — the beginning of the process

Twice a year, Minnesota Management and Budget, the state’s budget office, works hand-in-hand with state agencies to determine revenue projections and expenses. Then there’s the state economists reviewing state and national economic trends, understanding their projections, along with tabulating agencies’ funds, and coming up with the state forecast.

“We bring those two together to determine how revenues and spending are going to change, and how our bottom line is going to change,” State Budget Director Margaret Kelly told the House State Government Finance Committee while giving a budget primer earlier in session.

Formally known as the Budget and Economic Forecast, the information is released in November and February. It is required under state law and provides the framework for what becomes the budget process.

In November 2016, it was projected that Minnesota was on track to have a $1.4 billion surplus for the upcoming two-year budget cycle. Predicting what’s going to happen is tough business though. The latest one came after a general election brought Donald Trump to the White House, and Republicans sweeping control of both Congress and the Legislature. In response, MMB’s report listed “U.S. policy uncertainty” as a “significant risk” with the forecast.

“It’s really just this projected surplus and an awful lot of things can change in over two years before we get to June 30, 2019,” Knoblach said.

When February rolled around, the forecast projected a $1.65 billion surplus. With that number in hand the governor adjusted his spending targets and the Legislature began, in earnest, crafting their spending targets.


The drawing board

Gov. Mark Dayton announced his 2018-19 biennial spending priorities Jan. 24, which included spending increases in education, transportation and health insurance for the next two years. That proposal is typically based on the November forecast, but changes after the February Budget and Economic Forecast.

According to Bill Marx, chief fiscal analysis in the nonpartisan House Fiscal Analysis Department, the governor’s budget is in three parts: message, detailed operating budget, including news fees or increases to existing fees, and a detailed capital budget — although the third part usually comes in even-numbered years.

Gov. Mark Dayton answers a reporter’s question during the Jan. 24 presentation of his biennial budget proposal. House Photography file photo

In 2013, for instance, Dayton proposed eliminating a $1.1 billion biennial budget deficit and funding education systems by expanding taxes on services previously exempt and increasing taxes on the wealthiest Minnesotans. Dayton also proposed cutting sales taxes by 1.3 percent. Two years later, Dayton proposed a $42 billion biennial spending package — based on a projected $1 billion surplus — to aid early childhood education initiatives and child care tax credits.

“My budget would continue making the investments our state needs to create opportunity for every Minnesotan,” Dayton said in a news release. “It would deliver excellent educations for all our students, support job creation across our state, and create cleaner, healthier futures for all Minnesotans. These investments, and reforms to make government work at the speed of business, will help create an even Better Minnesota.”

Drawn up by the administration, the governor’s budget also details where his appointees and confidants – heads of various departments and agencies — want to reduce, continue or expand programs and services offered by the state. Then the different commissioners and staffs plead their cases with the governor and his office.

Depending on the governor, spending proposals can be more costly in healthy economic years or leaner in rougher times, and they can include larger savings plans or no savings at all. There’s the squirrel-in-winter approach of storing acorns for a later date, and then there’s the first-paycheck-teenager approach of spending it all on something new and shiny.

With a growing deficit and the Great Recession at hand, Minnesota depleted all of its “rainy day” savings in 2009-10 to cover government costs. Since then, the state’s major savings account has grown to about $1.9 billion.


Checks, balances and writing balanced checks

The budget process doesn’t stop with the governor. In a democracy, it takes a village to determine where the villagers’ money gets spent. That’s where the Legislature comes into play.

Rep. Jim Knoblach

Knoblach, whose committee is the final rubber-stamping group before appropriation requests show their faces on the House Floor, said he began discussing priorities with fellow lawmakers almost as soon as the Legislature was gaveled into session Jan. 3. Working with other finance-related committee chairs, Knoblach said the process requires understanding the big picture first, then it’s time to get into the weeds.

What’s going on in different departments? Are there any emergencies? What are some new initiatives? “We go through a long line of questions like that,” Knoblach said. “That helps me get a sense of what’s going on in each committee.”

There’s the House State Government Finance Committee, House Education Finance Committee, House Taxes Committee and others that oversee specific governmental departments and their budget ideas. Meanwhile, the same process is happening over at the Senate.

“You look at what the governor does, and you see probably some things that need to be done that maybe you weren’t aware of. You hope that maybe he’s got some ideas on where to save money through the bureaucracy and his agencies, so you incorporate that through your budget,” Knoblach said.

If the governor’s budget framework is the drawing board, the Legislature is the artist who scribbles and brushes his or her way into exhibitions.

Then, if everyone can agree – House, Senate and governor – the adjusted budget is voted on and implemented beginning July 1.

Search Session Daily

Recent Dailies

Week in Review: April 17-21

When lawmakers return Monday, they will have four weeks to work with Gov. Mark Dayton in crafting...

$61 million and plenty of policy separates House, Senate state government bills

A committee of 10 legislators – five from the House, five from the Senate – began working Friday ...

Funding differences, concerns aplenty as public safety conferees begin their work

When combined, the House and Senate proposed increases in public safety and judiciary funding for...

Government audits of insurance companies gets House OK

After surfacing complaints from the insurance industry about how the Department of Commerce condu...

Bill subjecting commission sales reps to state law passes House

The House passed a bill Thursday that would close a loophole that businesses based in other state...

House passes data changes, background checks for appraisers

The House on Thursday passed a bill that would make a number of technical changes to laws governi...

Cost-saving measure for credit unions, members now moves to Senate

Credit unions would be able to embrace technology and encourage members to show up for meetings a...

Higher Ed conference group begins to hash out policy differences

Tasked with crafting a proposal that would offer affordability and accessibility for post-seconda...

House OKs limits to life insurance policies by suspected terrorists

Insurance companies may be able to limit life insurance payments to beneficiaries of suspected te...

House recognizes research, fiscal departments for 50 years of service

The non-partisan House Research and House Fiscal Analysis Departments were recognized by the Hous...

Omnibus tax bill repurposes some 2016 vetoed provisions, adds some new

There hasn’t been a comprehensive omnibus tax bill since 2013 when Gov. Mark Dayton instituted a ...

House, Senate negotiators tackle transportation bills in hopes of finding a deal

Can Minnesota lawmakers reach a long-discussed, long-term transportation funding deal? House and ...

'Inefficient and efficient at the same time': It’s conference committee season

Legislation packed with new or changing policies and billions in state-funded programs have made ...

Buffer law, fee increases on table as environment conference committee starts

Fee increases at state parks, delays in the buffer law, even who can use scopes on muzzleloaders,...

Ed finance omnibus bill conference committee digs into details, seeks unified proposal

With the fate of voluntary pre-kindergarten programs across the state to be determined, a House-S...

Panel hears how Real ID compliance bills differ

How Minnesota might comply with the federal Real ID law — an issue that has dogged the Legislatur...

House minority leader responds with own protest and dissent

House Minority Leader Melissa Hortman (DFL-Brooklyn Park) submitted her own two-page protest and ...

House ethics panel stands at ready to self-police

Disputes over government ethics have been roiling politics around the globe this year, from Washi...

Starting Line: Seeking ways to prevent wolf-livestock conflicts in Greater Minnesota

According to the Department of Natural Resources, Minnesota has the highest population of wolves ...

With five weeks to go, lots for 2017 Legislature to get accomplished

When legislators return to St. Paul next week after the week-long Passover/Easter break it is exp...

Week in Review: April 3-7

It took tired members about three hours to wrap up their week of lengthy floor debates by approvi...

House passes omnibus health bill that would scrap MNsure

The House passed its omnibus health and human services finance bill, as amended, on a 75-53 vote ...

Dayton demands fiscal integrity from lawmakers

With the Legislature poised to begin its Passover/Easter recess, Gov. Mark Dayton had a message f...

House OKs omnibus state government finance bill that reduces spending

A two-year, $944 million plan to fund state government agencies and offices passed the House 75-5...

House gives its blessing to omnibus jobs and energy bill

The omnibus job growth and energy affordability policy and finance bill would distribute $380 mil...

Student data on school laptops would get privacy protections

Students using school-issued laptops, tablets, and other devices could know their data has specia...

State reporting on abortions could expand to track telemedicine use

Annual state reports on induced abortions already include a lot of information – where the proced...

From home cooks to fences and feedlots, omnibus ag policy bill passes House

The financial threshold farmers must meet to participate in the state’s debt mediation program ma...

Public Information Services  ·   175 State Office Building, Saint Paul, MN 55155   ·   Public.Information@house.mn