We still do not have an answer to the question everyone is asking: How is the Legislature going to erase a $3 billion budget deficit by the end of Sunday so the session can adjourn on time?
Negotiations continue and legislative leaders report lots of ideas, but there's no agreement yet. Few details are being made public, but I contend a budget deal must include long-term structural reform to reduce spending. A sunset commission could be established to combine state agencies and reduce the size of state government.
Tax increases are likely off the table as part of a budget fix. Pawlenty vetoed a budget-balancing bill this week that included a $443 million income tax increase; research shows the tax hikes would have impacted 60 percent of Minnesota's small businesses.
Speaker Margaret Anderson-Kelliher is telling people a tax increase of some kind might be possible if Democrats can convince three Republicans to help them override a veto. I hope she has a Plan B, because I do not see an override in the cards.
I will let you know how this unfolds, but in the meantime we have seen a boatload of other bills come through the Legislature as budget negotiations continue. Below is a summary of what's taken place at the Capitol just this week.
LEGISLATURE REPASSES TRANSPORTATION POLICY BILL
The House unanimously repassed a transportation bill after a conference committee removed proposals for special license plates. The bill would, in part, exempt school bus drivers from wearing safety belts and set a maximum 40 mph speed limit in work zones on two-lane highways where the posted speed is at least 60 mph. It also would direct the Driver and Vehicle Services Division of the Public Safety Department to insert new language in driver’s manuals to encourage drivers to operate vehicles in the right lane of a multi-lane road unless passing another vehicle. The Senate also passed it, so now we're waiting for the governor's action.
HHS BUDGET BILL VETOED
Gov. Tim Pawlenty vetoed the omnibus health and human services budget bill passed this week by the Legislature. Pawlenty says the bill does not go far enough to reduce government spending and has indicated he will veto it. On the House floor, some legislators said they don’t like the idea of making a major program change based on forthcoming federal dollars. One of the bill’s major provisions would allow certain Minnesotans making less than $8,000 annually to enroll in the state’s Medicaid program as soon as next year. This would include single adults in General Assistance Medical Care and MinnesotaCare, programs that are solely state-funded. Conferees found agreement in several key areas, including the adoption of an early federal health care reform initiative. Under the so-called “early option,” General Assistance Medical Care participants and certain others could enroll in the state’s Medicaid program as soon as next year. The move would capture over $1 billion of federal funding over the next three years, but require a state match. Beginning in 2014, the federal government will pay much more of the costs associated with this population.
LEGISLATURE APPROVES OMNIBUS ENVIRONMENT BILL
The omnibus environment, energy and natural resources policy and finance bill, which also contains the outdoor heritage appropriations bill was passed by the Legislature and is being reviewed by the governor.
The bill contains five articles:
? $58.9 million of outdoor heritage appropriations;
? Clean Water Fund projects;
? general provisions for the legacy funds;
? recreation and natural resource provisions; and
? energy bills not included in previously passed legislation.
Among the major topics discussed by conferees was the proposed repeal of Lessard-Sams Outdoor Heritage Council definitions that define “protect, enhance and restore.” Several legislators and stakeholders argued that the definitions were never vetted through the scientific community and should be repealed. Conferees kept $800,000 of supplemental funding in the bill so the understaffed Public Utilities Commission could add staff, even though they expect Gov. Tim Pawlenty to veto it.
HOUSE PASSES OMNIBUS EDUCATION BILL
The omnibus K-12 education bill passed the House earlier this week. We are awaiting Senate action. The bill was amended to remove a proposal to codify the shifts made by the governor through the unallotment process, saying legislative leaders are negotiating a separate plan to address unallotments and repayment of the K-12 shifts. An amendment that would have reinstated an alternative teacher licensure provision in an earlier version of the bill was defeated 65-68, after nearly two hours of passionate, bipartisan statements of support and opposition. Other policy reforms in the bill include an amendment successfully offered that refines an earlier proposal to require teacher and principal evaluations. The bill also contains funding proposals offering school districts more flexibility and stability with their cash flow, plus the major education funding reform package known as the “new Minnesota miracle.”
OMNIBUS EARLY CHILDHOOD BILL GOES TO GOVERNOR
The omnibus early childhood bill is on the governor’s desk. The bill would direct the State Advisory Council on Early Childhood Education and Care to make recommendations on three proposals. The council would appoint a task force to study and make recommendations on creating an Office of Early Learning. The task force would consider a series of objectives related to delivering, measuring and improving quality of early childhood services. If established, an office could streamline oversight of education and child care services now administered by three departments: education, health and human services. The council would also make recommendations on creating a statewide school readiness report card, and developing a plan to screen and assess 3 year olds and entering kindergarteners for school-readiness. The conference committee report adopted by both bodies moved proposed screening and assessment plans to 2012.