Dear Friends and Neighbors,
Here is an update from the Capitol and here at home in the district.
THE STATE BUDGET
Minnesota Management & Budget (MMB) released its November Economic Forecast last Thursday. Its analysis of our current economy projects a surplus of $1.871 billion for the Biennial Fiscal Years 2016-17. Minnesota ends its budget cycle on June 30 of every odd year, so this projection predicts our fiscal condition approximately 18 months from now.
By the Numbers: The Legislature recently passed a state law that requires that one-third of any November forecast that is in surplus be transferred to the state budget reserve. Therefore, the budget forecast requires the transfer of approximately $594 million to the budget reserve. The reserve fund level is still approximately $435 million short of MMB’s $2.032 billion recommendation. After this transfer, the June 30, 2017 forecast of projected cash on hand is thereby reduced to approximately $1.206 billion. Our debt capacity (ability to borrow) also increased by approximately $316.7 million to nearly $8.5 billion (about $7 billion is already on the credit card) primarily as a result of having paid down our credit card and by a large increase in taxation on personal income. The state paid off $37.425 million in general fund appropriation refunding bonds; $6.860 million in certificates of participation; $8.295 million in pro football stadium appropriation bonds; $1.22 million for 2008 MHFA supportive housing; $930,000 for 2012 MFHA housing infrastructure bonds; $5.165 million for TCF Bank Stadium; and $9.415 million for U of M bioscience facilities.
In summary, we have $1.597 billion cash on hand in the budget reserve; a $1.206 billion projected surplus; a $41.8 billion general fund budget and approximately $68 billion of ALL funds budget. Each month MMB releases the prior month’s revenue and compares it against its forecast and adjusts the fiscal year end forecast accordingly. For approximately the last two years, the trend has generally been revenue in excess of expenses accumulating to the current budget surplus.
As we convene the 2016 session, we will have an opportunity to recalibrate our tax policy to match our spending, rather than to match our spending to our tax collections. Government has a tremendous power unavailable to the private sector, that being the power of levy. Government has the power to levy and tax your earnings and labor at any time that it deems necessary. Over-taxing hard working families and businesses is unnecessary, bad policy and contributes to stagnant wage growth.
You may recall the Dayton administration declined to negotiate for passage of a full transportation bill last session over its insistence on increasing the wholesale gas tax. Last week, Gov. Dayton indicated that he is no longer advocating for his wholesale oil tax and has declared the proposal “dead” for the coming session. The tax would have increased as oil prices increased at the wholesale level producing a “double whammy” for consumers whom not only would be subjected to rising prices of gasoline itself, but increased taxes too because of the wholesale rise and retail increase. The governor’s new position provides encouraging insight to the possibility of a comprehensive transportation bill moving forward this session. Last session, Republicans proposed a comprehensive $7 billion, 10-year transportation bill without raising taxes.
Spending priorities on transportation should be focused first on improvement of our existing roads and bridges serving the greatest numbers of Minnesotans. Public safety upon our existing transportation system is becoming threatened by years of deferred maintenance and lack of expansion necessary for changing development patterns and existing population shifts. A 38-mile stretch of U.S. Highway 12 traversing the center of our legislative district has become the deadliest road per mile in Minnesota. We have the oldest stretch of rural highway in the metropolitan region with metro volumes and densities exceeding its 40-year-old design capacity. The Highway 12 Safety Coalition was formed last year in response to multiple fatal crashes on this western metro stretch of highway.
The Coalition is comprised of many stakeholders along the corridor. Among them are the City of Wayzata, City of Orono, City of Independence, City of Maple Plain, City of Long Lake, City of Delano, MnDot, Hennepin County, and all of the police chiefs representing the respective public safety departments, and elected Official. Over the last several months a safety audit has been completed which has helped to identify problem areas along the roadway suffering frequent crashes. You can learn more about the effort underway to improve public safety along the corridor by checking out several news stories and articles by Googling Highway 12 Safety Coalition, by reading the MnDot safety audit, or by viewing the press conference held Nov. 30 by checking in the YouTube video "Going 12 for Highway 12 Challenge."
Last week, area residents, police chiefs and leaders, including myself and Sen. Osmek met with Transportation Commissioner Zelle for the purpose of highlighting the serious safety deficiencies that exist on this stretch of rural highway design in the metro district. Commissioner Zelle was receptive to receiving the safety audit, but expressed concerns for funding and the need of a transportation funding bill. Both Sen. Osmek and I assured the commissioner that we would be introducing separate funding legislation in both the House and Senate chamber this coming session in an effort to provide funding for safety improvement along the corridor.
Why does President Abraham Lincoln’s portrait hang above the Speaker’s rostrum in the Minnesota House Chamber?
When you pass through the entry portal to the largest and most impressive room in the State Capitol – the House Chamber – you directly face the portrait or our 16th president, Abraham Lincoln, positioned above the Speaker of the House.
Lincoln was the first U.S. president to be elected after Minnesota became a state in 1858. The painting is a reproduction of one by American artist George P.A. Healy. This portrait can be found in a larger work entitled “The Peacemaker”, which depicted a meeting of Lincoln and his military advisors at the end of the Civil War.
That artwork was lost when Chicago’s Calumet Club was destroyed by fire in 1871. Healy recognized that the portrait of Lincoln made for a fine work in its own right; he painted three. One portrait ( once owned by Lincoln’s son, Robert Todd Lincoln) hangs in the state dining room of the White House, and another hangs in a Chicago library. The third painting was commissioned by Lincoln’s close friend, Elihu Washburn(e), a former U.S. Secretary of State and ambassador to France. That Washburn(e) painting was passed down through the family until 1917 when William D. Washburn Jr., then a member of the Minnesota House of Representatives, acquired it on loan for display in the House Chamber to honor Civil War veterans.
In 1933, heirs to the Washburn estate requested the painting’s return. A special committee appointed by the Speaker of the House recommended that a copy of the original be secured “at an expense not exceeding one thousand dollars including the frame”. St. Paul artist Edward Brewer (who has painted several of the portraits of Minnesota governors that hang in the Capitol) was commissioned to paint a reproduction of the Healy work. That is what hangs in the House Chamber today.
-prepared by Tim Johnson-Chief Clerk’s Office 1/22/2010
Have a joyous Holiday Season,
Rep. Jerry Hertaus