BLOG: End of Session Legislative Update

Dear Neighbors,

The legislative session ended on Thursday, May 10. We passed some great pieces of legislation that were signed into law, and too many bipartisan bills were vetoed by Governor Dayton.

Bills Signed

The Health and Human Services (HHS) omnibus bill was signed into law. It contains numerous provisions, but most importantly it promotes accountability and value in our health system. The bill supports providers and families, and maximizes the use of limited resources.

Last year we took a projected growth of the Health and Human Services budget of 22% and reduced the growth to 6.2%. The actual spending for Health and Human Services was lower than projected in the budget this year, which accounts for part of the budget surplus.

The Health and Human Services omnibus bill included EBT and welfare fraud reforms, as well as provisions that allow for health care to be delivered in a more localized fashion. I was pleased that my bill to provide more TANF funds (Temporary Assistance of Needy Families) for homelessness projects was included. I believe we need to help people who are homeless so they can get a job and get back on their feet.

A provision that requires independent, third-party audits of our Health Maintenance Organizations (HMOs) was also included in the omnibus bill. The state has recently been under federal scrutiny for the management of public health plans. The bill creates a more transparent spending process that ensures our tax dollars in managed care public programs are being spent appropriately and cost-effectively.

The governor signed the School Trust Lands bill. This is a great reform which will ensure we are generating the maximum revenue off of the property that is designated as “trust” for our children’s education. Up to this point, these lands have been managed solely by the Department of Natural Resources (DNR). The bill moves the management over to the Office of Administration and there is bipartisan legislative oversight. The income from forestry on the lands during the past two years dropped 22%, and money transferred to the fund had dropped 84%. As a consequence, Minnesota is in the bottom third of states for generating land trust revenue. In comparison, Utah instituted a similar reform 16 years ago, and its trust fund money grew from $18 million to $1.3 billion.

We also had rulemaking reform signed into law that will provide legislative oversight of rules that agencies create. Rules can be particularly burdensome to small business owners and job creators. Agencies and departments will have to propose their new rules to the Legislature in order to receive approval.

Another government reform bill we passed will make jobs and economic growth in Minnesota much easier. We created a “one-stop-shop” ombudsman who will guide new businesses through the government approval process. Right now, people who are trying to start a business in our state have to go through several, and often times redundant, agencies and departments. It can be very confusing, and business owners around the state have told us that Minnesota is not an attractive place to start a business.

Bills Vetoed

Unfortunately, Governor Dayton vetoed many major bills that received broad, bipartisan support.

Dayton vetoed a needed redistricting fix. The Redistricting Court Panel drew a line through a retirement community in Edina, making it so that neighbors across the hall from each other are in different legislative districts. The fix was requested by the City of Edina, supported by Secretary of State Mark Ritchie, and endorsed by the League of Minnesota Cities. However, Governor Dayton vetoed it, saying it was “not appropriate.” (However, the exact same fix was made 10 years ago.)

Another veto was the “Last In/First Out” reform that was supported by many people. The reform added “performance,” rather than solely “tenure/seniority,” when making staff layoffs decisions. There are very few states that have this provision.

The governor vetoed our Tax Relief and Job Creation Act. It contained provisions to help small businesses, gave tax relief to homeowners, and provided incentives to invest in our state’s quality workforce. Our goal is to grow private sector jobs and not have tax policies that drive jobs to states that have better tax policies. We have one of the worst business tax climates in the nation. Business owners around the state have told us that Minnesota is not an attractive place to start a business, and this legislation would have helped reverse our current status and boost economic development.

At the end of session we changed the bill and passed a second Tax Relief and Job Creation Act; however, Dayton vetoed it again. We attempted to find consensus with him, but on three separate occasions, he did not show up to scheduled meetings with the author of the bill.

Here are some of the provisions that were in the bill:

• Freeze the current rate of the statewide tax on business property for one year.
• Permanently provide an upfront sales tax exemption on capital equipment purchases for small businesses with less than 51 employees, starting in FY 2013.
• Increase the Angel Investment Credit by 4.5 million for 2012, and enhances efforts to push more investment to Greater Minnesota.
• Increase the R&D tax credit for Minnesota companies to help make Minnesota a more attractive place to do business and enable companies to create high-paying jobs.
• Incentivize businesses to hire unemployed veterans by instituting a veteran’s jobs tax credit.
• Provide for the Mall of America expansion project, estimated to create 7,000 construction jobs and 3,000 permanent jobs.

Please call Governor Dayton and tell him you do not support his veto of the tax reform bill. Gov. Dayton can be reached at 651-201-3400, or fill out a form here.

I am honored to represent you in St. Paul. As always, I welcome your thoughts and views on the issues. Please feel free to contact me.

Best regards –

Diane