The "bonding session" is in the priority for the second year of the biennial legislative cycle and there will be a bonding bill. Governor Dayton released is $1.5 billion capital spending plan a few weeks ago. House and Senate GOP leaders Daudt and Gazelka are thinking of a bill more like $600 to $800 million. There is shared concern too much past funding has focused on new construction rather than maintenance. Senate Minority leader sees a path forward with a $1 billion dollar bill for new construction and an additional $500 million dedicated to maintenance. House minority leader Hortman emphasized the importance of a big bonding bill now to create jobs, and as a last call for financing major capitol improvements with low inflation and low interest rates.
Legislator's offered their perspectives during a press session briefing with Capitol Bureau reporters on February 13.
The 2018 session will get started on February 20 with unfinished business from the 2017 session. You'll remember Dayton and Legislature ended up in court over the question of Dayton's line item veto of funding for the legislature. The Governor and all legislative leaders agree funding should be approved. Rep. Daubt wants a "clean bill;" nothing but funding for the legislature. Sen. Gazelka has a razor think majority of one vote, so he needs to be a little more accommodating of his DFL Senate colleagues. He doesn’t want the bill to become a so-called "Christmas Tree," but is open to Senator Bakk's argument that the bill raises salaries for legislators and their staff and should remedy a legislative oversight committee's rejection of a labor contract and salary increases for state employees. Democrats in the House will keep the pressure on up to get more. Hortman suggested if there was any interest in getting Democrats in the House to vote for the bill "we will need to talk," citing a "lot left undone" during the previous session. Expect the session to start off with a budget tussle that could stretch out for a couple weeks.
Lawmakers will be revisiting the 2018-19 budget. The Governor and leaders expect a surplus; probably between $600 million to just shy of a billion dollars. Senator Bakk was a voice of fiscal caution. He suggested the job of lawmakers was going to be to tap down expectations and to be careful not to make long term commitments, either in expenditures or tax adjustments. Legislators talked about resolving administrative problems that have plagued the DMV, state pensions and health department monitoring of elder care as being ripe for one time funding fixes.
All of the state lawmakers used the word "complex" to describe the situation the state is facing as it tries to absorb the impact of federal tax reform. Failing to do anything to achieve conformity means a $600 million tax increase for Minnesota taxpayers. However, Department of Revenue and legislative policy researchers are still trying to understand the full impact of the new federal law. As much as leaders would like to pass a conformity bill that is revenue neutral, each adjustment has a see-saw effect of raising state taxes for some and lowering them for others. The issue is most likely to be resolved, again, by the razor thin majority in the Senate where the pressure to come up with bipartisan solutions will be greatest.
That razor thin majority will factor into the direction of the 2018 legislative session, possibility from day one. The question of whether or now Senate Majority Leader Fischbach, who became Lt. Governor when Tina Smith was appointed U.S. Senator, can serve in both positions was not resolved in Judge Guthmann's court (MN Lawyer). Another legal challenge is expected the moment the Senate makes a decision that hinges on a one vote margin. If a court determines Fischbach cannot be both a State Senator and Lt. Governor, it could completely change the dynamic of the legislative session as the core issue will become who controls the Senate: DFLers or Republicans.
The leaders talked about issues, too. The Governor, Senate and House leaders are each looking at strategies for addressing sexual misconduct in state workplaces. Hortman suggested the legislature also needed to look at changing laws to ensure protections are in force in all workplaces. They also discussed the challenges of affordable housing for workers and daycare in Greater Minnesota, with Sen. Gazelka suggesting this was a place for regulatory reform which Rep. Hortman noted House DFLers would be pushing for housing financing in the bonding bill. Infrastructure investment was also on everyone's agenda, with GOP leaders suggesting the possibility of a Constitutional Amendment to dedicated taxes from auto parts sales to roads and bridges. Finally, there is also some debate about how to improve the legislative budget process to avoid what has become a perennial end-of-session negotiation involving only the Governor and legislative leaders and brinksmanship negotiating under the threat of government shutdown. Rep. Daudt suggested the possibility of a Constitutional Amendment that would create a continuing resolution tool, similar to what the U.S. government uses when it is unable to agree to an annual budget.
You can hear for yourselves what the Governor and legislative leaders have to say about the forthcoming session when they come together again on February 23 at Minnesota Council on Nonprofits annual Session Line-up.