Leadership Revolt

The failure to pass Sf 5, the Ag/Environmental bill was a big poke int he eye for Senate Majority Leader Tom Bakk (DFL-03, Cook). Specifically, because the bill failed to gain the necessary 34 votes for passage and because the Senate Assistant Majority Leader Katie Sieben (DFL-54, Newport), Deputy Senate Majority Leader Sen. Jeff Hayden (DFL-62, Minneapolis) and Senate Majority Whip Chris Eaton (DFL-40, Brooklyn Center) all voted against the bill.

Our early analysis about the role the women in the DFL Caucus would play, was dead on. Also, the freshman class largely stood together in opposition to the bill, with the exceptions of Sens. John Hoffman (DFL-36, Champlin) and  Vicki Jensen (DFL-24, Owatonna).

Now speculation is running rampant about who will be the deciding vote. If opponents wanted to truly kill the bill they should have called for a quick reconsideration of the vote, which would have done the bill in, but because they did not the bill remains alive. As per Mason’s reconsideration of the vote can be called by any member on the prevailing side. The names being batted about are Sen. Jim Metzen (DFL-52, South St Paul), Chuck Wiger (DFL-43, Maplewood), Branden Petersen (R-35, Andover) and Bill Ingebrigtsen (R-08, Alexandria).

Metzen as the former Senate President he has been know to cut a deal. Wiger is not thought of as someone with a rigid backbone. Petersen is ever deft at maneuvers and may be able to score something down the road, he even said out loud in the elevator “Don’t worry its going to pass.” Well if he votes differently it will. Ingebrigtsen is known to oppose the hemp provision in the bill and is doing the bidding of the law enforcement community. This is a bit ironic since Rep. Mary Franson (R-08B, Alexandria) is the House author of the provision.

The reality is it will just take awhile longer than anticipated and the House is withholding the passage of the Bonding Bill until the Senate passed the Ag/Environmental bill.

Just a little drama on a Friday afternoon.

Carlson Soliciting Information for How to Vote on Facebook

We just saw this post from Sen. Jim Carlson (DFL-51, Eagan) on Facebook:

“Governor Mark Dayton called a special session to address five bills that contain a mixture of funding to operate the State and new/repealed policies. The most controversial bill is the so-called “environmental bill”. The Governor and the Senate DFL Majority have been painted into a corner where a YES vote will enact some of the worst environmental policies the state has seen in many years, and a NO vote might lead to a second special session or a state government shutdown if the players cannot agree to a passable fix in the next 18 days.

How do my friends, constituents, supporters, critics want me to vote on this bill?”

What are your thoughts or opinions? We do accept those as well

First Special Session Set to Start

Legislators are flocking in from all corners of the state to attend the first legislative session ever held in the State Office Building. The members will be occupying SOB rooms 5 and 10 and the spaces will be a little cramped.

The four legislative leaders Speaker Kurt Daudt (R-31A, Crown) Senate Majority Leader Tom Bakk (DFL-03, Cook), House Minority Leader Paul Thissen (DFL-61B, Minneapolis) and Senate Minority Leader David Hann (R-48, Eden Prairie) signed off on the agreement yesterday afternoon and the Special Session was called for at 10 AM today. The House and Senate will be taking up three provisions vetoed by Governor Mark Dayton (DFL): HF0844, the omnibus K-12 education policy and finance bill, HF1437, the jobs, economic development and energy bill and HF0846 the omnibus environment and natural resources finance bill.

Interestingly, there are three tax provisions contained in the K-12 bill. Because education is based partially on property tax collections the Education bill is effectively, a tax bill. The sales tax collection from bodies under the joint powers agreement will have their start date pushed back to January 1, 2017, rather than 2016. This will result in $20 million in revenues, which is said to be returned retroactively.  Additionally, there is a provision making full year non-residents ineligible for claiming the working family tax credit. This accounts for $10.3 million and means those who reside out-of-state, but work here in Minnesota will not be able to claim the benefit. The final provision takes the funding for the Working Families Credit out of the general fund rather than TANF (Temporary Assistance for Needy Families) funds, which come from the federal government.

During the Special Session, our attention will be trained on the Senate because it is likely one if not two of these measures will require significant Republican support in order to be repassed.

Originally, HF0844, K-12 bill, easily passed the Senate on a vote of 52-14 vote, but the bill was later vetoed because it didn’t contain a provision for Pre-K funding for four year olds sought by Governor Dayton. Since then he has dropped his requirement for the program and the legislature is set to take up the bill, without much controversy.

The Senate passed HF1437, the jobs bill, on a vote of 34-29 with 23 DFLers voting for and 16 voting against, there were 10 Republican votes in favor and 13 in opposition initially there were four Senators not voting: Sens. David Brown (R-15, Becker), Karin Housely (R-39, Stillwater), Sean Nienow (R-32, Cambridge) and Dave Thompson (R-58, Lakeville).

We understand there is some suave being applied her with discussions about a supplemental bill next session to address losses in areas like the neighborhood development corporation. Programmatic reductions may be offset when legislators comeback next year with additional money stemming from the state’s economic vitality.

The Senate later passed HF0846, Ag/environment bill,  on a vote of 37 to 28 with 10 DFLers voting in favor and 29 against there were 25 Republicans who voted in favor and 1 against with two not voting: Sens. David Brown (R-15, Becker), Karin Housely (R-39, Stillwater).

Yesterday, Dayton spoke with the DFL House and Senate Caucuses, we understand from conversations we have had with members in attendance, the Governor called for passage of these three bills saying they were the best compromises he could strike with House Speaker Daudt. He stressed his efforts to gain more ground and acknowledged his inability to do so.

If Dayton is to be measured by his initiatives this session he has a poorly checkered record. He pushed for Pre-K and relented; he sought a 50-foot ditch buffer to protect our states waterways and significantly compromised to the favor of the chemical agriculture industry, he sought to regain a provision for undermining the State Auditor’s office, which he had already signed and caved and finally he has threatened fellow DFLers, who are standing on principle, that he would campaign against them in their own districts if they “grandstand” and fail to go along. Given the power and authority Dayton has shown in the negotiations, his threat might not be very substantial and in fact his opposition could be a benefit. The best way a legislator can show independence to their constituents, would be to buck the governor.

As we examine the forthcoming issues the most problematic piece of legislation will be HF0846, Ag/environment bill, many DFLers have expressed their resolve and willingness to stand up for what they believe in, despite the feelings of the governor.  Senate Minority Leader Hann has said he doubts his caucus will put up more than 10 votes and this places DFLers at odds with their principles and governing.

Our analysis leads us to believe the following: Freshman DFL Senators will be less likely to stand against the governor and vote to cause a government shutdown. In fact, many of them were elected because of their criticism of the Republicans for doing the same and it would be hypocritical to do the same three years later.  As we have heard from reports Sen. John Hoffman (DFL-36, Champlin) voted against the bill initially, but will support the compromise language. Senators Melisa Franzen (DFL-49, Edina) and Greg Clausen (DFL-57, Apple Valley)both voted against the legislation the first time through and we will be watching their actions closely.

We expect those in leadership who voted against will feel more pressure to go along. We will not be surprised if Deputy Senate Majority Leader Sen. Jeff Hayden (DFL-62, Minneapolis) steps in line and supports the governor and the compromised position, but Assistant Majority Leader Katie Sieben (DFL-54, Newport) a former employee of US Senator Mark Dayton, will not toe the line. She along with Senate President Sandy Pappas (DFL-65, St Paul) gives cover to others in their caucus. We expect the women in the caucus will be less likely to do as they are told and show their true convictions. We will be interested to see what direction Senate Majority Whip Chris Eaton (DFL-40, Brooklyn Center) does since she voted again the bill the first time and it is her job to wrangle up floor votes.

The most problematic lot will be Senators in safe legislative districts with two or more elections under their belts. Sen. Bev Scalze (DFL-42, Little Canada), a strong environmental advocate and natural artist, may be a freshman Senator, but she also has four House elections to reflect upon. Similarly situated are Sen. Barb Goodwin (DFL-41, Columbia Heights) she is in her 2nd Senate term and had three House election in her background and Sen. Alice Johnson (DFL-37, Spring Lake Park) a Freshman Senator, but with 7 House terms.. They along with others like Sen. Kathy Sheran (DFL-19, Mankato) who have expressed their displeasure with the negotiations and the ultimate result may be heard even louder this time.

Our calculations and analysis of the data shows the Senators who originally voted in favor will stand pat and do so again They will be joined by those freshman who are less driven ideologically, or who represent marginal or swing districts, because they will be able to argue they voted on both sides of this issue, but prevented a government shutdown.

At this point we can only see 16 DFL Senators who will be readily voting for the bill, and 10 Republican, which leaves the bill eight votes short. If the other freshman, like Franzen, Clausen and Sens. Susan Kent (DFL-53, Woodbury), and Melissa Wiklund (DFL-50, Bloomington)  join Hoffman the vote is still two shy. We would advise they should not be quick to put their votes up on the tally board and be silent or vote present if called upon until the Republican produce their votes.

People should look for their indicators from the actions of the freshmen.

Second Special Session Deux

We will not be surprised if Governor Mark Dayton (DFL) calls another Special Session after Judge Donovan Frank put announces his ruling on sex-offenders June 17th. He has made it abundantly clear that the legislature needs to address this issue and because they have not he will. We expect he will call for their release and the governor will be placed in the uncomfortable position of addressing the issue.

This may be a prickly issue, but it is one that will not go away no matter how long it is ignored by the state’s elected officials.

Setting the Stage of the 2015 Special Session

Governor Mark Dayton (DFL) set the stage for a 2015 Special Session when he vetoed the Omnibus K-12 education policy and finance bill. He further enhanced his negotiating position by following that action with additional vetoes on the Omnibus jobs, housing, economic development and energy appropriations and the Omnibus agriculture, environment and natural resources appropriations bills. The crux of the debate has been focusing on the governor’s desire for a Universal Four-year old preschool program incorporated into the existing K-12 school system, on this point Republicans may have the advantage. Dayton’s proposal has significant long-term fiscal implications; known in legislative parlance as fiscal tails. A universal pre-K program comes with $200 million annual operating cost to serve all 4-year olds and an additional $2.25 billion in capital costs. Critics argue the same goals are able to be met with the state paying only a $100 million annual price tag, through a provision of scholarships targeted for at-risk youth. Those with the ability to pay can do so of their own accord. The Republicans ability to harness this debate is enhanced by former Federal Reserve Senior Vice-President Art Rolnick, who has made his mark in recent years extolling the economic sense of educational investments in early childhood development. Yesterday, Rolnick brought Speaker Kurt Daudt (R-31A, Crown) on a tour of New Horizon Academy in the Frogtown Neighborhood of St Paul. This is the community that Rolnick tested the program for use of MN Early Learning Scholarships. Prior to the program this facility did not exist. Rolnick, a self-described numbers guy, spoke with us this morning about his support for pre-K investment and his aversion to requiring a provincial tie to the public school system. He does acknowledge the role of the public schools as a part of the delivery system, but advocates a “mixed delivery” method, which we would call a public-private partnership. He is interested in the state supporting the $100 million annual investment, targeted scholarships for all of Minnesota’s at-risk youth. This investment will cover all students at or below 185% of the Federal poverty line. This proposal is an extension of the MN Model of Early Learning Scholarships, something Rolnick said, he credits Governor Dayton for creating in his talks throughout the country. The figures which are at odds stem from a study by the Rand Corporation which found the cost per hour of a school based program to be $19.06/hour compared to $3.47-5.77/hour at a for profit location. Republicans bristle at the idea of institutionalizing more public sector jobs. Remember this is in light the unionization of child care workers last legislative session. If a pre-K system were limited to only publicly available options private pre-schools, parochial pre-schools and parent based at-home programs would be denied funding. The loss of four-year olds would have a significant impact on private child care centers. Rolnick advocates for an enhanced Head Start program combined with a Four Star Parent Aware program, which teaches the parents as well as the students tools for success. In order to be included each facility must meet is the requirements and be either a three or four star program. These standards are set by the MN Department of Human Services in coordination with the MN Office of Early Learning. School Vouchers We asked Rolnick if the term scholarship was a euphemism for voucher and just a camel’s nose under the tent for public monies for private school vouchers and he said, “Education Commissioner Brenda Casselius asked the same question and the answer is yes, but only for pre-K. There is no evidence vouchers work for K-3.”  He again emphasized a mixed approach saying, “I am a problems/solutions guy. I believe in markets. This is the most effective program we have for closing the achievement gap.” He also said, ”We could create a sliding fee system available to all students.” Parental Involvement We asked Rolnick, if this approach enables more parental involvement, and he said, “We have evidence there is more parental involvement. When parents decide what programs their children attend because of the scholarships they have more engagement. Many times these parents have no high school education themselves and they proudly state, my child is going to college.” We will watch and see what transpires in the negotiations prior to the Special Session, but in this case, if the focus is on at-risk youth the Republicans may have the better approach. With limited dollars, available for closing the achievement gap, Dayton’s intent to serve all four-year olds would provide a broader reach create a stronger educational foundation for all students, but a more targeted approach uses less money for a better effect.

While Negotiations Are On About Pre-K, What Else? Transportation and Transit.

Today, Senate and House DFLers put out a press release focused on Transportation and Transit; we expect this is to keep their issues alive during the Special Session discussions. Remember, the Senate passed a “Lights On” Transportation Policy Bill and a small Bonding Bill, while the House would need to do so during the Special Session.

The DFL claims to have met the Republicans halfway by forgoing a gas tax increase at the wholesale level and proposing a $.10/gallon at the pump is expected to result in $300 million/year. This combined with sales tax on auto parts, which is constitutionally dedicated produces $381 million in FY 16-17, and $493M in FY 18-19 and a  1.5% in license tab Registration fees adds an additional  $191.6M in 16-17, and $278.8M in FY 18-19. They also propose an opt-in Metro Transit tax of ½ or ¾ cent to stabilize the funding source for transit.

A Special Session is a Necessary Outcome

At the onset of the legislative session Governor Mark Dayton (DFL) established three specific priorities, which the legislature has largely ignored: Stable funding for transportation and transit, ditch buffers on agricultural lands to protect the state’s water supply from agricultural pollution and universal, voluntary pre-K education for four year-olds. Normally, governors get 85% of what they want and in each of these areas the legislature has come up drastically short.

This backhand delivered by the legislature to the governor only warrants its own corporal response. Governor Dayton should veto the Agricultural Finance and Natural Resources, and Education Bills and demand a Transportation Finance Bill in a Special Session. Especially because the Ag/Nat Bill effects many rural communities, which Republicans claim as their core constituency. The bills that are coming to his desk are woefully inadequate.

As we heard at the start of the legislative session this is the Governor Unbound, he should prove he embodies the self-declared moniker. It is important that the governor carry through with his threat to veto the Education Bill and by vetoing the Agricultural Finance and Natural Resources Bill he hits the Republican House right in their proverbial bread basket.

When one looks at the bills headed to the governor it is easy to see the slight.

The Transportation Omnibus Bill is a “Lights on Provision”, is mainly about policy and it enables a continuation of the discussion next legislative session, or when the legislature next meets. The bill does not address the governor’s concern for a stable funding resource to pay for road, bridges or transit needs.

There is no provision, study or any response to governor’s call for addressing or remediating the pollution caused by farm application of pesticides, herbicides and fertilizers. The agricultural industry has successfully asserted its influence forgoing any changes in agricultural policy or practice. This means farmers will continue to plant Round-Up Ready seeds, which are encased with the pollutants next season and our state’s waters are still in peril.

The E-12 Funding Bill lacks funding for any innovations in education and barely meets the effects of inflation. The only reason it does so is because inflation is at a historic low. After, nearly a decade of perpetual deficits, the Senate has succumbed to the pressures of the House, and made only moderate adjustments to the per pupil funding formula. If Minnesota seeks to reclaim its title as the “Brainpower state” it will need to wait for another opportunity.

During the press conference announcing the February Revenue forecast, we asked Governor Dayton if he consider his approach to be more of a long-term rather than a short-term as proposed by the House Republicans. He agreed with the premise of our question and thanked Publisher Shawn Towle for the idea, saying he was going to use that himself.

When one looks at the various budget bills it is hard to see any change in the funding mechanisms from past legislative sessions when the state faced large deficits. It is interesting to note in 1998, the DFL House Majority adjourned Sine Die because they for Baby Ed and Governor Arne Carlson (R) wanted Ex Post Facto legislation for Marvin Windows. When it became clear the House would not get what they wanted they adjourned Sine Die. Coincidentally, that is the same year the DFL lost the House Majority and Jesse Ventura (RP) became governor. In our opinion, this set the state on its path to ruin.

If we are to learn anything from the past it is our state moves forward when everyone is pulling in the same direction.