It’s the last day of the legislative session, and a pallor of a cloudy sky sets the stage for the day. Few of the Capitol observers believe there will be a compromise and this legislation session will end and if there is to be any tangible progress for this year, it will require some movement from both sides.
We have seen Speaker of the House Melissa Hortman (DFL-36, Brooklyn Park) and House Capital Investment Committee Chair Fue Lee (DFDL-59A, Minneapolis) carrying paper over to meet with Senate Capital Investment Chair Tom Bakk (I-03, Cook). We keep waiting to hear about different conference committee progress. Right now, the Taxes Conference Committee is meeting and they are passing principals, but the bill will not be closed as per Tax Committee Chair Paul Marquart (DFL-04B, Dilworth). Health and Human Services is still pending, all we have heard is HHS is mostly passing policy. Education is quite problematic, and since their are implications from this bill and requirements in the Tax Bill, much is up in the air. Senator Jeremy Miller (R-14, Winona) can be seen walking the halls, but he gives little indication of the direction things are heading.
We think the concept of Managing Failure, might be a fine synopsis.
Here are the agreed to Tax Principles.
- TAXCC-Conformity (PDF)
- TAXCC-Renters-13438266749855195508 (PDF)
- TAXCC-Sales (PDF)
- TAXCC-Income (PDF)
- TAXCC-LOCALTAX (PDF)
We overhead a major committee chair state the belief there will be a Special Session.
National and Minnesota Report
Is it too early to start talking about Governor Tim Walz b(DFL-MN) for President? We think not and had speculated this concept when the former Congressman was first elected. Since our state is the only one with a divided legislature and the split between urban, suburban and rural is so vast, having a candidate who can bridge the span of a divided electorate, will be a skill set our nation needs.
The vitriol we expect in the forthcoming campaign we be sharp, and Walz’ respond to the COVID Pandemic will be front and center. But, also, the fact our state is carrying the largest surplus in its history and Minnesota continues tot out perform the nation economically, are all worthy points for a nationwide campaign.
With his Washington DC experience coupled with his social studies teaching career and football coaching he will be a very attractive candidate. If President Joe Biden (D) decided to forgo a second term, Walz is our pick to step forward.
We have confirmed, the DFL Legislators intend to stay in St Paul, doing the people’s work and will not be in Rochester to endorse Governor Tim Walz (DFL-MN), Lt Governor Peggy Flanagan (DFL-MN), Attorney General Keith Ellison (DFL-MN) or State Auditor Julie Blaha (DFL-MN). Now, because of remote meeting capacity they could be, but it would send a bad message to the citizen’s of the state and give an impression the DFL members are not doing their work.
We confirmed this with House Majority Leader Ryan Winkler (DFL-46A, Golden Valley) and Assistant Senate Minority Leader Nick Frentz (DFL-19, North Mankato).
That fact the DFL State Convention is being held on the last week of session is pure stupidity and only is the responsibility of DFL Party Chair Ken Martin.
Granted the filing period for office opened on Tuesday, May 17, and will close on May 31, but this scheduling foul-up could have been avoided with attention to greater detail. The fact, the Republicans were in Rochester, and unlike the DFL, which has automatic delegate status for all DFL Constitutional and Legislators, something advance by our publisher Shawn Towle in the 1990’s, a week before the last week of session, did deter some legislative business, but the last week, come on.
Since, Martin is the longest serving DFL Chair looks like a good time for him to consider not running for reelection.
With the legislative session in its last days, and the DFL State Convention happening in Rochester. We wonder if the DFL members of the state legislature will be in attendance. The DFL Party allows legislators to be automatic delegates to the convention, but with the waning hours of the legislative session ticking away, will members be able to attend? Now, they do have the luxury of being remote, but what would that look like on camera. Will they be there for Governor Tim Walz (DFL) and the other Constitutional Officers?
We’re just curious.
We have a one-page .pdf which sows the signed Budget Framework. It doesn’t really help explain what the structure of the deal really is. Those details are still being worked out. But Here is what we know.
Yesterday, we received the following press release from Governor Tim Walz’ (DFL-MN) office. Upon viewing the House Legislative Session, later in the day we learned House Speaker Melissa Hortman (DFL-36B, Brooklyn Park) was working remotely.
Governor Tim Walz, House Speaker Melissa Hortman, and Senate Majority Leader Jeremy Miller today announced a broad framework for the end of the legislative session that includes $4 billion to invest in education, public safety, and health care, and $4 billion for a tax bill to provide financial relief for Minnesotans.
“I ran for Governor to ensure that every student in every classroom across Minnesota receives an education that will set them up for success. As a former classroom teacher, I know that these historic investments are how we get there,” said Governor Walz. “With an unprecedented surplus, we have the ability to make significant investments in the things that will improve Minnesotans’ lives, like health care, public safety, and education, while also providing tax cuts and putting money in Minnesotans’ pockets.”
“Getting money back to the people has been a top priority for Republicans this session and I’m very happy we were able to accomplish this with permanent ongoing tax relief for hardworking Minnesotans, families, and seniors,” Senate Majority Leader Miller said. “In addition to giving money back, this bipartisan agreement delivers targeted investments in public safety, education, nursing homes, and core infrastructure projects. Finally, leaving money on the bottom line is the fiscally responsible thing to do, especially as the economy appears to be slowing down.”
“House DFLers have been working all session to reduce costs for families, support workers, and improve public safety,” said Speaker Hortman. “We have reached a bipartisan agreement on a budget framework that makes strong investments in families’ economic security, education, health care, and public safety to address the challenges Minnesotans are facing. These investments are in addition to the budget we passed last year and the frontline worker bonuses that we got across the finish line last month. This is a positive step forward, but there is a lot more work ahead of us in this final week of the legislative session.”
The plan includes $1 billion for education, $1 billion for health care and human services, $450 million for public safety, $1.5 billion in additional investments, and $1.4 billion in capital investment projects. $4 billion will be put toward a tax bill, leaving $4 billion on the bottom line to help the state manage future economic uncertainty. Details will be finalized in the days to come.
During the day, capitol observers were skeptical if this “agreement” would bring thte session to a comfortable close of be the reason things fall apart. The odds on a Special Session are even money.
Hennepin and Ramsey County also held their conventions today. All of the incumbents were endorsed and in Ramsey retiring State Rep Rena Moran (DFL-65A, St Paul) secured the endorsement on the first ballot. Her success was directly attributable to her successor Samakab Hussein DFL endorsee for 65A, who turned out a significant Somali vote.
In Hennepin, Dwana Witt received the endorsement for County Sheriff on t he first ballot.
Now, we’re are waiting for the Hennepin County Attorney balloting to commence.
The balloting is over in Hennepin County. Mary Moriarty won rhe endorsement ont he 2nd ballot, and House Majority Leader Ryan Winkler (DFL-46A, Golden Valley) is going to contest int he Primary.
The balloting for Governor has commenced.
|Dr Scott Jensen||555||29.48%|
|Dr Scott Jensen||616||29.48%|
|Dr Scott Jensen||616||29.48%|
Mike Murphy takes the lead, slightly, Gazelka is dropped.
|Dr Scott Jensen||722||34.22%|
|Dr Scott Jensen||745||35.36%|
|Dr Scott Jensen||800||38.04%|
|Dr Scott Jensen||1233||59.02%|
|Dr Scott Jensen||1180||56.70%|
Jensen slips back.
Jensen got endorsed.
With House Speaker Melissa Hortman’s (DFL-36B, Brooklyn Park) Wednesday announcement on Twitter of a positive COVID test, House Majority Leader Ryan Winkler’s (DFL-46A, Golden Valley) endorsement contest for Hennepin County Attorney on Saturday, the State Republican Endorsing Convention also on Saturday in Rochester, House Capital Investment Chair Fue Lee (DFL-59A, Minneapolis) off to Ohio, because of his wife, is State Senator Tina Maharath (D-03, Whitehall) is giving birth to their first child and the fact the conference committee work seems to be mostly focused on policy language sets an interesting stage.
With neither body holding legislative sessions today or over the weekend, it’s clear there isn’t any sense of urgency. The speaker with have completed her five-day quarantine, hopefully without any residual effects, will hold talks with Senate Majority Leader Jeremy Miller (R-14, Winona). The leadership seems to be continuing with making the major funding decisions and keeping those conversations amongst themselves.
Since this is supposed to be a Bonding Session, our discussions with Senate Capital Investment Committee Chair Tom Bakk (I-03, Cook) lead us to believe, there will not be hearings, but rather a Langseth Model delivery of a fully formed Bonding Bill. This is a reference to former Capital Investment Committee Chair Keith Langseth (D-Glyndon) who delivered his bill in just such fashion. We spoke with Langseth about his approach and he said, “There has to be a balance, I think Higher Education should be a top statewide priority in my opinion.”
As we have said repeatedly over the years, we think there should be a differed maintenance Bonding Bill and when reading the line items in a Langseth bill we started seeing a new term of art-HEAPR (Higher Education Asset Preservation and Replacement).
We understand Speaker Hortman will have a Cash Bonding Bill, which will account for a significant amount from the Budget Surplus. Although with the remaining $6.553 billion after the $2.7 billion deal for Reinsurance, which placated Republicans and the Hero Pay for frontline workers which satisfied the DFL, how the remaining money is allocated is the crux of the question, especially when Republicans are still maintaining the American Experiment line of give it all back.
As we have communicated there will need to be cash in the Bonding Bill to make something happen, the question is how much. They could just put forward $2 billion from the surplus, provide one-time money and fund many statewide projects without any fiscal tails.
Since by many impressions, the Speaker has treated this session much like a normal funding session, and the endpoint is looming, it gives a semblance of credibility to the idea of the need for a Special Session, but more things have been achieved in past sessions with even less time available.
This would be a huge way for the state to move ahead, with a robust jobs bill, repair of infrastructure issues across the state and a campaign agenda where each side put Minnesota ahead of partisanship. This would leave over $4 million for other items along with a potential tax cut for the working class and maybe even a few Walz Checks.
We asked, the MN Office of Management and Budget to clarify an important question, which is how much of the $9.253 billion surplus was generated from Personal Income Tax. We will be clear, we thought this was a simple question, only to find out it was not. After waiting for over a day we received an email which attempts to spell it out.
Now, we ask this question as an informed position in light of Senate Majority Leader Jeremy Miller’s (R-14, Winona) constant statement, regarding the surplus as a result of over taxation. Well, truthfully, only a little more than 1/3 of the surplus is accumulated in this way. As you will see below $3.4 billion of the $9.253 billion stems from income tax, which is only 36.74%.
As negotiations move forward, we hope there will be more truth in advertising and a less rhetoric filled discussion. Granted, we know this is an election year, and everyone in leadership is trying to score electoral points, but when the truth is known and published here on Checks & Balances let the talks move forward with a common understanding on what those numbers actually are.
Here is the email we received from Patrick Hogan, Director, Enterprise Communications and Marketing | Communications and Planning
I think this illustrates why the answer to your questions is more complicated than one might at first think.
When the FY 22-23 budget was enacted, $127 million was left on the bottom line. As of the February 22-23 forecast, the 22-23 biennium is expected to end with a $9.253 billion surplus (this amount has shrunk and will shrink more as bills are enacted this session – in other words, the surplus fluctuates over time and as legislators make spending decisions). The growth in expected balance was generated by several components:
- FY 21 concluded with $3.1 billion more on the bottom line than expected, and this amount carried forward into FY 22-23. Of that FY 21 higher balance, $331 million was generated by lower than expected spending and $2.775 billion was higher than expected revenue, $1.5 billion from income tax, $656 million from corporations and $336 million from sales; the remainder from other revenue sources (https://mn.gov/mmb-stat/documents/budget/operating-budget/forecast/nov-2021/nov21fcst-fba-detail.pdf)
- The remaining $6.2 billion in higher balance is from $631 million lower spending and $6.4 billion higher expected revenue, offset by $995 million in higher reserve balances due to statutory allocations. Of the revenue change, $3.4 billion is from higher income tax receipts, $1.3 billion is from higher corporate receipts, $1 billion is from higher sales receipts. The remaining difference is from smaller revenue sources. For more detail, the reporter can compare the column labeled “Feb FY 2022-23” from this document with the column labeled “SS1 FY 2022-23” from this document.
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