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First Reading: On the fast track

Published (2/15/2008)
By Session Weekly Staff
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On the opening day of session, a conference committee was called to discuss the bill that would put an amendment to the constitution before voters that would dedicate funding for the outdoors and the arts. Members of the Dedicated Funding Conference Committee, from left, Rep. Dennis Ozment, Rep. Rick Hansen, Rep. Jean Wagenius, Rep. Frank Moe, Sen. Dennis Frederickson, Sen. Richard Cohen and Sen. Satveer Chaudhary sign the conference report. (Photo by Tom Olmscheid)Many committee and commission hearings. Road trips. A special session for flood relief. Yes, it was a busy interim for legislators.

Now, can members translate what they’ve learned into successful legislation in a three-month window? And can it be done in an election year when tension between parties continues to run high?

A shorter, even-year session is traditionally focused on capital investment projects, but 2008 has the potential to be far from ordinary, with members trying to do more in many areas while trying to overcome a multi-hundred-million dollar budget deficit that may only get larger.

Let’s take a look at some of the potentially biggest topics.



Bonding

What a difference a year makes.

The 2007 February Economic Forecast projected a $2.6 billion surplus through the biennium ending June 30, 2009. Now, the national downturn in the housing sector, its effect on the state’s lumber industry, tighter credit restrictions, higher energy prices and the lack of state job growth has turned the state’s economy south with a projected $373 million biennial deficit. The February Economic Forecast, to be released Feb. 28, is expected to contain even more dark news.

All this will help determine just how much money the state can bond for capital projects, which traditionally is the focus of the second year of the biennium.

On the session’s first day, members began discussing Gov. Tim Pawlenty’s capital investment proposal, which includes a fourfold increase over the previous record investment in local bridges. But some House Capital Investment Finance Division members think that if a comprehensive transportation bill is enacted, it would free up bonding money for other areas, such as higher education.

Of the governor’s nearly $1.09 billion proposal, $965 million would come in general obligation bonding. The package stays within the 3 percent debt service guideline. But the amount could be adjusted downward if the February Economic Forecast shows a worsening of the state’s deficit.

More than 43 percent of the governor’s proposal is aimed at statewide projects, 29.8 percent to projects in the seven-county Twin Cities metropolitan area and 27 percent to Greater Minnesota projects.

The collapse of the Minneapolis Interstate 35W bridge brought attention to the stateTransportation accounts for nearly 40 percent of the bill, including $225 million for local bridge replacement. The amount would be allocated on a priority basis from lists compiled by the Department of Transportation.

Higher education accounts for 23.7 percent of the bill. The University of Minnesota and Minnesota State Colleges and Universities system would each receive $129 million, under Pawlenty’s plan.

The environment and outdoors would receive $175 million, or 16 percent, of the proposed funds. This includes $46 million for drinking water and wastewater treatment facility improvements, and $30 million for wetland preservation activities.

Other than $40 million for a new arena in Duluth, the proposal contains no local projects.



Budget

Rep. Loren Solberg (DFL-Grand Rapids), chairman of the House Ways and Means Committee, characterizes Minnesota’s economic outlook as a “deep concern.”

“There are two looming problems: the housing devaluation is not over and the credit crunch is not over.” He said the upcoming February Economic Forecast will make for some tough decisions as legislators deal with a greater than expected financial shortfall in the short- and long-term. “It’s going to have to be a balanced approach of cutting and finding new funding resources,” he said.

The loss of 23,000 jobs in the last few months and shrinking personal income are most worrisome, he said. Those are signs of long-term problems that need greater state investment in education, research and development to solve.

The committee’s lead Republican, Rep. Mary Liz Holberg (R-Lakeville), echoes Solberg’s concern.

“If we are smart, we will make some budget adjustments for the out years,” she said. But any proposal to raise taxes to solve the economic woes will be met with opposition by her party. “We have to respect the families’ budgets. They are hurting more than the state,” she said.

At a Feb. 12 press conference, House Speaker Margaret Anderson Kelliher (DFL-Mpls) and Senate Majority Leader Larry Pogemiller (DFL-Mpls) said a comprehensive transportation bill and a capital investment bill would help the economy by providing new jobs within the next few months. Once those bills are on the governor’s desk, Pogemiller said they will begin, in earnest, to deal with balancing the budget.



Energy

One of the areas in which Pawlenty and the DFL-controlled Legislature managed to find common ground last year was energy policy, and many lawmakers are hoping that spirit of cooperation will carry into 2008. On the agenda for this year: new legislation aimed at curbing global climate change and creating a cleaner energy economy.

Rep. Bill Hilty (DFL-Finlayson), chairman of the House Energy Finance and Policy Division, said his division will likely act on the recommendations of the Minnesota Climate Change Advisory Group. The group, which was mandated by last year’s Next Generation Energy Act, is charged with identifying strategies to mitigate the impact of global warming. Its recommendations are expected later this month.

One of the mitigation strategies likely to be discussed is a possible statewide “cap and trade” system for carbon emissions. Under such a system, total emissions would be capped and individual power plants assigned “allowances” of carbon emissions that they could either use for themselves or sell to one another. Other initiatives may include tightening vehicle emissions standards and increasing energy efficiency standards for new buildings constructed in the state.

Hilty said the Legislature may present the governor with a resolution concerning peak oil — the point at which global oil demand will exceed total production capacity, which is projected to occur within as little as five to 10 years. During the interim, Hilty’s committee held two separate hearings on the phenomenon, which some experts say might cause social and economic chaos without proper planning. Hilty and Sen. Jim Carlson (DFL-Eagan) co-sponsor a resolution that would ask the governor for, in Hilty’s words, “a recognition of the problem.”



Environment

On the heels of a busy interim for the House’s environmental committees, lawmakers hit the ground running, passing a long sought-after measure that has been almost perennially on the wish lists of environmentalists and outdoors supporters.

HF2285, sponsored by House Majority Leader Tony Sertich (DFL-Chisholm) and Pogemiller, will ask voters in the Nov. 4 general election to approve a three-eighths of 1 percent sales tax increase and constitutionally dedicate the money to the wildlife, natural habitat, clean water and the arts. It was passed 85-46 by the House and 46-16 by the Senate on Feb. 14. The governor does not act on constitutional amendments.

Legislators are hoping to keep that momentum as they attempt to address a broad range of environmental issues, many likely to be initiatives designed to combat or mitigate the effects of global climate change. These include possible new vehicle fuel efficiency standards modeled on a law that was recently enacted in California — a law that, as its opponents note, was recently struck down by the U.S. Environmental Protection Agency.

“There’s a lot of it that’s going to deal with climate change,” House Environment and Natural Resources Committee Chairman Kent Eken (DFL-Twin Valley) said of his committee’s agenda for the session.

First up, however, will be a review of bonding requests from the Department of Natural Resources and other state agencies by members of the House Environment and Natural Resources Finance Division. Improvements and repairs to state parks and trails are likely to figure heavily in the discussions. As outlined in his Feb. 13 State of the State address, Pawlenty supports purchasing land for a new state park at Lake Vermilion; opponents of the governor’s plan say the money would be better spent on repairs and upgrades to the state’s current parks and trails.



Health and Human Services

An overall health care package to include universal care for all Minnesotans by 2011 and a stronger focus on chronic disease prevention are the main focuses for House health committees this session. Restructuring payments to providers would also be included in that health package, said Rep. Paul Thissen (DFL-Mpls), chairman of the House Health and Human Services Committee.

The Health Care Transformation Task Force and the Legislative Commission on Health Care Access, met in the interim to discuss access to health care in Minnesota. Both came to similar conclusions on universal health care and focusing on prevention and risk assessment of chronic conditions for long-term cost savings, said Rep. Thomas Huntley (DFL-Duluth), chairman of the House Health Care and Human Services Finance Division. Chronic conditions include diabetes, coronary artery and heart disease, asthma, depression and chronic obstructive pulmonary disease.

“All of this is directed at making health care affordable for people,” Thissen said.

Pawlenty expressed similar sentiment on affordability during his State of the State address. He suggested a dramatic reformation to the current health care system, including treating chronic diseases to extend the cost savings to more uninsured.

The commission also recommends health insurance reform to help bring about universal health care.

The recommendations include establishing a set of measurements and reporting goals for insurers to use as standard pay-for-performance models, and establishing uniform expectations and reporting on community benefits to be provided by non-profit health plan companies.

According to the task force recommendations, the current provider payment structures do not meet the needs of patients and health care providers. By giving incentives or rewards to providers that use innovative methods for higher quality care and lower costs, it would free up doctors and nurses to practice medicine the way they and their patients want, Thissen said.

“I hope the Legislature takes into account the cost of not doing anything in addition to the cost of moving forward with transformation,” he added.



Transportation

A bridge collapse and Department of Transportation funding were both highly energized interim topics.

When the Interstate 35W bridge collapsed Aug. 1, killing 13 people and injuring 85 others, some members wasted little time to begin using the collapse as a symbol of the needed funding for deficient state roads and bridges. Some wanted a special session called in hopes of passing a comprehensive funding package to help relieve the estimated $2.4 billion in needs.

At a pre-session press conference Feb. 11, Kelliher said a gas tax and Twin Cities metropolitan area sales tax increase, in last year’s bill vetoed by Pawlenty, are likely to be revisited this year. “I don’t think you can hardly accomplish anything without these,” she said. Both are included in HF2800, an omnibus transportation finance bill quickly working its way through the House.

With the immediacy of state funds needed for the bridge replacement, MnDOT officials sought $195 million in emergency funding to keep all other Fiscal Year 2008 projects on schedule. A Transportation Contingency Appropriations Group, which included House and Senate leaders, met a handful of times, but allocated only about half of the requested amount.

That amount, to be reimbursed once federal funds are received, is expected to provide the department sufficient funds to let scheduled projects through February. Members, including Solberg, said it would permit the full Legislature to have a say in the additional department funding before the March letting of transportation projects.

However, the new transportation funding package, sponsored by Rep. Bernie Lieder (DFL-Crookston), would cover the needed funding.

The Joint House-Senate Subcommittee on Claims and Pawlenty agreed to create a special $1 million fund for survivors and victims’ families to make up for lost earnings not compensated from other sources, such as workers’ compensation or disability insurance. No legislative approval is needed. The money comes from existing appropriations to the Trunk Highway and General funds for tort claims.

A bill for more victim compensation (HF2553), sponsored by Rep. Ryan Winkler (DFL-Golden Valley), was approved Feb. 14 by the House Governmental Operations, Reform, Technology and Elections Committee and sent to the House Public Safety and Civil Justice Committee. Sen. Ron Latz (DFL-St. Louis Park) is expected to offer a similar bill in the Senate. Latz expects a final version to be passed by mid-March.



— House Public Information Services’ Nick Busse, Mike Cook, Patty Ostberg and Lee Ann Schutz contributed to this story.

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