Democratic and Republican legislative leaders sat down with reporters Wednesday for a sneak peek at what the 2014 session has in store.
For an hour and a half, House Speaker Paul Thissen, Senate Majority Leader Tom Bakk, House Minority Leader Kurt Daudt and Senate Minority Leader David Hann fielded questions on a wide range of topics that might or might not come up when the Legislature returns to work Feb. 25.
At the top of the DFL agenda for the coming session will be a hike in the state minimum wage. How high that increase has yet to be determined -- the House passed a bill that would raise the wage to $9.50 an hour while the Senate passed a bill that would have increased the current $6.15 state minimum to $7.75. The 2013 session ended before the two sides could hammer out a compromise.
Republicans are leery of a wage hike, pointing to a new study by the Congressional Budget Office that found that increasing the federal minimum wage to $10.10 could eliminate as many as 1 million jobs nationwide (or as few as zero) if employers downsized to save on salary costs.
"This is going to unemploy the under-employed," Daudt said.
Bakk countered that the same study found that the same theoretical wage hike could lift as many as 900,000 Americans out of poverty.
Thissen predicted the House and Senate will reach a compromise and pass a wage hike within the first few weeks of the session. Minnesota's economy is strong, he said, and will only get stronger if its workers earn better wages.
"For all the doom and gloom that's been said about 'our economy is going to collapse, businesses are going to flee,' we certainly haven't seen that. In fact, it's going the other direction," he said. "When we last raised the minimum wage in Minnesota, when we last raised it at the federal level, you didn't see that impact on jobs. What the CBO report did say, and what everyone seems to agree with, is that it actually increases economic activity in the nation and the state where that goes into effect."
There was no more consensus about what to do with the expected state budget surplus.
"Our priorities are really to go back and...fix some of the mistakes of the last session," said Daudt,who joined Hann in calling for repeal of the three new business-to-business taxes that passed last session, as well as closing some of the state tax gaps that opened up when the Legislature opted not to bring state tax codes into full conformity with all the new federal tax breaks.
Thissen agreed that the state could probably afford a few tax cuts if the current revenue forecasts hold true. But Bakk wasn't eager to spend any surpluses right away. During the boom times of the 1990s, he said, the Legislature gave back $10 billion in tax cuts and Jesse checks. The result, he said, "plunged us into deficit management for almost a decade."
"We are only one revenue forecast with our head above water," he said. "To immediately run off and try to please everybody...It's very easy to vote for things and just hand off the ramifications of it to the next Legislature. But I am the next Legislature...We don't want to run the risk. This economic recovery still seems pretty fragile to me."
Daudt said the mere existence of a surplus is a sign that the Legislature overreached last session.
"I hope I don't see anybody doing a victory lap about having a small surplus right now," he said. "That money belongs to the taxpayers. What it means is that we overtaxed Minnesotans."
There were a few points of bipartisan agreement. All four leaders said they supported the 5 percent campaign that is working to raise wages of caregivers around the state and the leaders agreed that there are plenty of projects around the state that could find their way into a bonding bill this session, although the exact size of that bill remains in dispute.
Daudt said his caucus would support a "reasonable-sized" bonding bill -- somewhere in the neighborhood of $800 million -- that favors repairs to existing infrastructure infrastructure and funds for higher education over new construction. Thissen agreed that the $800 million number is "a good target for us to head for."
There were a few issues the DFL majority has no interest in revisiting this session. MNsure, the state's new online health insurance marketplace, got off to a rocky launch after it passed the Legislature last year. Nor were lawmakers interested in revisiting the stadium issue -- although Bakk noted that the Legislature might have to make a few tweaks to please the NFL as it scouts the city as a potential Super Bowl host.