Dear Neighbor,
It's been a busy first couple weeks of the short 2018 Session. We've had multiple hearings reviewing the Office of the Legislative Auditor's work over the interim, the Management and Budget Office released the February forecast, and more developments on MNLARS highlight these first couple weeks.
In the upcoming days, I will be introducing a bill to stress test the state's pensions. Testing the state's pensions through a number of scenarios relating to pension liabilities, therefore giving decision makers a better idea of where things are now. Having that information then allows for better ways to confront planning for the future. Unfunded pension liability is a real threat to our state's future fiscal health, and knowing there is no single solution to putting our state on solvent pension footing, begs the question of what can be done. Stress testing the pension system will help to give us a clear picture of what our options are.
Forecast: Surplus for Minnesota
The February forecast was released on Wednesday, February 28th, and showed a projected $329 million surplus. This news is in stark contrast with the $188 million deficit from the November forecast. In fact, at more than a half-billion dollars, the improvement is the greatest three-month turnaround in 20 years.
As I said at the time, a couple major factors at the federal were tempering down the November forecast: $178 million in state spending on Children's Health Insurance Program and a federal tax bill. With the federal government passing CHIP and tax reform since then, along with our well-performing economy, this major improvement in forecasts was expected. In fact, with how well Minnesota's economy is currently doing, it could be argued the current projection is still being too pessimistic.
This modest surplus should help to rein in any large expenditure requests and will help to keep make responsible fiscal decisions during this session.
The full budget forecast from MMB can be found here.
MNLARS Update
It was another turbulent week for MNLARS, the new computer system developed by the Department of Public Safety and MN.IT to perform DMV services. Governor Dayton submitted an emergency funding request for $10 million immediately, threatening layoff notice for employees if the legislature did not fund his request. This proposal was brought up for debate in the House Chamber on Thursday afternoon. But it was after the Senate had adjourned until Monday, so there was nothing we could do until Monday anyway since both bodies would have needed to act favorably on the bill for it to proceed to the Governor.
Chair of the House Transportation Finance Committee, Paul Torkelson, has introduced HF 3147 which provides the $10 million from the same DVS account but would require the Governor to back-fill $10 million from within his executive agency budgets by June 30, 2019. Governor Dayton has said he accepts responsibility for the MNLARS mess, and this approach will give him the opportunity to back up those words with actions.
The bottom line is Minnesota taxpayers have paid nearly $100 million for a system that is only half built. Before we dedicate one more penny, we need to see real documentation that this funding is needed and that those responsible for this mess are held accountable. It simply would not be wise to allocate $10 million without comprehensive documentation and a plan on how MN.IT plans to spend this funding and provide a product that works. Minnesotans deserve a DMV system that works, but we will not give a blank check to the Governor.
Please continue to stay in touch to share your thoughts and ideas on issues important to you. You can schedule a time to meet with me in my office anytime by calling (651) 296-7065 or share your thoughts via email by emailing me at rep.bob.vogel@house.mn
Have a great week,
Bob