Now that the legislative session has concluded, I want to take a moment to share with you my assessment of the Legislature's accomplishments this year.
There is no doubt that it was one of the most productive and efficient sessions in many years. It was a session marked by compromise and bipartisan cooperation, which resulted in achievements that all Minnesotans can be proud: a balanced budget, direct property tax relief to homeowners, additional resources for our schools and nursing homes, a major transportation initiative, health care reform, and a strategic jobs/capital improvements bill that focuses on higher education and environmental initiatives.
The Legislature faced a challenging task this year when it began its session on February 12--balancing the state budget in the face of a $935 million deficit. I am pleased to report the Legislature met the challenge, and did so in a fiscally sound manner. The deficit was addressed in a balanced way through a combination of budget reductions, use of reserve funds, and increased revenues by closing corporate tax loopholes. No general tax increases were used to erase the deficit.
Property tax relief
Whether you are a senior living on a fixed income, a two-income family, or an individual whose wages simply haven't kept up with increasing costs, rising property taxes can seriously limit your ability to meet basic needs, such as food, clothing, and health care. Sadly, for homeowners all across Minnesota property taxes have increased significantly in recent years.
To combat that trend the Legislature enacted a major property tax relief plan. Included in the initiative is an expansion of the Property Tax Refund Program, which provides direct tax relief to homeowners whose property taxes are high relative to their incomes. Approximately 70,000 Minnesotans will benefit from this expansion. In addition, local governments will also receive more aid in order to lessen their reliance on property taxes to fund needed services. Levy limits were also imposed on local units of government to further help control escalating property taxes. This is what I hope is just a first step toward more permanent property tax relief in the future for Minnesota's homeowners.
Another area of particular concern to me is the financial struggles many school districts are confronting in order to provide Minnesota's children with the quality education they deserve. That is why I was pleased the Legislature was able to enact an education package that gives our schools additional resources to help secure the educational future of our children.
Among the highlights, the Legislature increased funding $51 per pupil to all school districts—the equivalent of a 1% increase on the basic funding formula. In addition, the Permanent School Trust Fund offset to the General Fund was eliminated effective 2010, resulting in additional revenues to all school districts of approximately $30 per pupil. School districts were also granted flexibility to use $51 per pupil from their operating capital reserve account for general fund purposes, if they are able. The Legislature also provided aid increases to cover certain specific expenses, such as the cost of developmental screenings. This funding is in addition to an 8% increase in overall funding – or $800 million in new money – that was passed last year. The 2007 funding increase included a 2009 formula increase of 1%.
The situation our schools are facing is a long-term problem that needs a solid, long-term solution. And while this year's legislation is a short-term fix, it is a necessary step to set the stage for a comprehensive education reform measure in the coming 2009 Legislative Session.
By partnering with business organizations, labor, conservation groups, and others, the Legislature was able to enact a transportation package that stimulates the economy, improves the safety of our state's roads and bridges, and provides property tax relief. The legislation will provide a $6.6 billion investment in roads, bridges, and transit over the next 10 years. That means important projects will get funding to move forward. A broad coalition of Minnesotans, including Democrats and Republicans, came together in support of this responsible investment in order to address a transportation problem the highly respected, nonpartisan Legislative Auditor characterized as "grim." In laying out its support for the package, the Chamber of Commerce stated, "it demonstrates to the public leadership on transportation, and should increase their confidence in our state's transportation system."
Thousands of Minnesotans are being financially squeezed as the cost of their health insurance outpaces their wages. For others, the prohibitive cost of health insurance simply prices them out of the insurance market altogether leaving them uninsured.
The Legislature addressed this problem with the passage of a landmark health care reform initiative that contains a balanced combination of creative private market solutions, as well as improvements to the more traditional public health care programs. For example, "quality incentive payments" are established to reward providers who deliver quality outcomes—payments for positive results, not just for going through the motions of attempting to treat a condition. It is the concept of "pay-for-performance" brought to the delivery of health care.
This health care reform package, along with the health care initiatives enacted by the Legislature last year, will result in new coverage to 117,000 Minnesotans—a 1/3 reduction in the number of uninsured Minnesotans in just two years.
An $821 million capital investment/jobs package was enacted into law that will help "jump-start" Minnesota's ailing economy by creating thousands of good paying jobs. It makes timely investments that will help businesses, and Minnesota's colleges and universities create the jobs of tomorrow—high-tech jobs that will be filled by our children and grandchildren. That productive workforce will be more important than ever as Minnesota products and ingenuity compete around the world.
As we look to the future, it is my hope that in upcoming sessions we can build upon the significant achievements that were enacted this year, and continue our progress toward keeping Minnesota the finest state in which to live and work. Thank you for giving me the privilege to serve you in St. Paul. As always, please don’t hesitate to share your views on issues that are of concern to you.