Minnesota’s strengthening economic recovery has left the state with a budget surplus of $1.23 billion, a dramatic jump from just a few months ago.
The surplus is another sign of the strength of the state’s economic recovery and will set off a new round of budget fights as Minnesota legislators figure out what to do with the windfall in an election year.
Minnesota Management and Budget Commissioner Jim Schowalter said the economy “continues to steam along,” and he has an upbeat outlook.
“I don’t want to get too much irrational exuberance here,” he said earlier this week, “but things are going well.”
Schowalter said the new, two-year federal budget deal has ushered in fresh confidence after years of repeated budget and debt ceiling showdowns in Washington.
“There is no budget crisis, and that helps people plan and understand where they are at,” Schowalter said.
Budget watchers have seen hints of the good news as monthly tax revenue collections beat projections over the past few months. “I think that is one of the good economic indicators of the activity already going on,” he said.
Minnesota’s economy continues to outpace the nation, Schowalter said, and “there doesn’t seem to be any signs of that slowing down.”
Minnesota has one of the lowest unemployment rates in the country, standing at 4.6 percent. The state created nearly 46,000 jobs in the past year, one of the fastest-growing states in the nation.
Legislators have been in session less than two weeks and are already figuring out ways to spend the money.
Leaders in the Minnesota House want to set aside at least $500 million for tax relief, which has to be booked as spending in state budgets. A coalition of Democrats and Republicans want to use a significant share of the money to bulk up the state's budget reserves to prepare for the next economic downturn. Many legislators want to use a share of the money to increase transportation spending, or even use it to pay cash for the multimillion-dollar State Capitol renovation.
“Our priority, number one, is the tax relief,” said House Minority Leader Kurt Daudt, R-Crown. “What this shows is that Democrats have collected too much money from the taxpayers. Let’s send it back.”
Senate Majority Leader Tom Bakk supports some tax relief, but also wants to set aside money to build up the state’s rainy day fund. He is concerned spending all the money now could cause problems in future years.
“The one thing I feel pretty strongly about is the budget reserve,” said Bakk, DFL-Cook.
GOP gubernatorial candidate Marty Seifert came to the Minnesota Capitol on Thursday to announce the selection of Rep. Pam Myhra as his running mate.
“Pam is a person that is immensely qualified,” Seifert said in front of blue-and-white campaign signs.
Seifert, a former legislator, previously recruited her to run for the Minnesota House. He called her a “work horse, not a show horse.”
The pick highlights the geographic diversity of this ticket, Seifert said. He is from Marshall and Myhra is a two-term representative from Burnsville, one of the Twin Cities suburbs that could be a battleground in the gubernatorial race.
“We have a good balance to bring the conversation back to the mainstream, rather than the far left, where we have been wallowing for the past few years,” Seifert said.
Myhra called her running mate “trustworthy and a strong conservative.”
“He has the right mix of experience and Minnesota values to be a great governor,” she said.
Myhra, 57, said she will not run for re-election in the House and focus on being Seifert’s surrogate on the campaign trail.
If elected, Seifert said Myhra would become the state’s ambassador and a leader in the state’s literacy efforts.
Seifert is the second GOP gubernatorial candidate to select a running mate. GOP Sen. Dave Thompson selected fellow Republican Sen. Michelle Benson as his lieutenant governor.
DFL Gov. Mark Dayton’s lieutenant governor, Yvonne Prettner Solon, has decided not to join him in his quest for a second term. Dayton selected his chief of staff, Tina Smith, as his new running mate.
Republican gubernatorial candidate Marty Seifert picked state Rep. Pam Myhra as his running mate, the Seifert campaign confirmed.
Myhra is a low profile two-term state representative from Burnsville. Solid, not flashy, she is known as a hard worker with conservative credentials.
The pick will give Seifert, of Marshall, a second in command as the campaign stumps across the state for delegates and votes. He is the third gubernatorial candidate to announce a pick for lieutenant governor.
DFL Gov. Mark Dayton tapped his chief of staff Tina Smith, who stepped down from her post this month to go on the campaign trail full time, as his running mate and GOP Sen. Dave Thompson picked fellow Republican Sen. Michelle Benson as his running mate.
Myhra ousted a sitting DFL House member in her first election. In her last election, after new maps were drawn that added Republican areas to her district, she won 54 percent of the vote in a district where Republican presidential candidate Mitt Romney won barely 51 percent of the vote.
Seifert, who was House minority leader when Myhra was recruited to join the House, is expected to formally announce his pick at 10:30 am on Thursday at the state Capitol.
A Seifert campaign source said that she will not run for re-election to the House so that she can campaign with Seifert, who has left open the possibility that he will run in an August primary.
Lawmakers have been gone from the Capitol for months, and return on Tuesday with all the politics and policy they left behind last year.
But in the House, they started the session with some bipartisan work.
The House unanimously passed $20 million bill to help low income Minnesotans with heating bills. With another week of subzero temperatures in the forecast and the region still gripped by a propane shortage, the measure is backed by the leadership of both parties and the governor.
"When we get hotline calls, people are calling in fear and desperation," Minnesota Department of Commerce Commissioner Mike Rothman told members of the House Ways and Means Committee at an informational meeting Tuesday morning.
The measure will particularly aid those who have been struggling with high propane bills in Minnesota's particularly cold winter. After 45 minutes of debate, the measure to shift funds out of the general fund and into the Low-Income Energy Assistance Program.
Senate Majority Leader Tom Bakk, DFL-Cook, has said the heating assistance bill will likely be the first measure on the governor's desk this session. Senate spokesman Amos Briggs said the Senate will act "quickly and urgently" to complete the legislative work on the bill.
Bakk told Senate members on Tuesday that the Senate may act on that bill on Monday.
Bakk said the $20 million House bill the House passed does not match with a memo he has from Gov. Mark Dayton, which said $17 million is needed.
Bakk said the earliest date he saw for the emergency fund run out of money was March 1, which is Saturday, when state employees won’t be sending out checks.
“Even if it is March 1, getting the bill to the governor March 3 is, I believe, plenty timely,” he said.
Given the accelerated timeline, Dayton will likely be able to sign that $20 million measure into law by next week.
The House and Senate also appointed, or re-appointed, members to deal with bicameral negotiations on a bill to hike the minimum wage.
Last year, the all Democratic Capitol failed to pass any minimum wage increase, despite the fact that DFL leaders said it was a priority, when the House and Senate could not agree on an increase.
This year advocates, who will hold a large rally at 4 p.m. in the Capitol today, are pushing to raise the wage from one of the nation's lowest -- $6.15 an hour -- to one of the nation's highest -- $9.50 an hour by 2015.
Sen. Chris Eaton, who is sponsoring the minimum wage measure in the Senate, said the Senate plans extensive hearings on the measure before it brings it up for votes.
House Majority Leader Erin Murphy, DFL-St. Paul, said she thinks it is time to pass the measure.
“Minnesotans have talked about that minimum wage all summer and fall,” Murphy said. “I think the Senate is listening to them and I think we’re going to be able to make the action complete this year.”
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This post will be updated throughout the day on Tuesday.
A heavily redacted stack of legal invoices released by the the governor's office this month shows that the state was receiving shutdown-related legal bills months after the 2011 shutdown ended.
As the government shutdown was dawning in the summer of 2011, Gov. Mark Dayton's office had said that outside legal counsel would be pro bono. But early this year, a report from the Minnesota Legislative Auditor's Office revealed that in fact the office had paid about $77,000 for the work.
Dayton's outside counsel, David Lillehaug, first charge for his time was on July 5, 2011, just after state government began shutting down. On that day, Lillehaug charged the state $4,417 for 10 and a half hours of work. The government shutdown began on July 1.
Parts of the invoices Star Tribune received from the governor's office were blacked out so some details of the work remain unclear.
The bills for legal work from Lillehaug's firm continued well after the three-week shutdown ended. The state received a bill in October that included a charge for Lillehaug's time from late September.
All the bills were fully paid well before Dayton picked Lillehaug last year to fill a vacancy on the Minnesota Supreme Court.
Dayton has said the money the state paid for shutdown-related legal work was well worth it.
"We hired the best constitutional lawyer in Minnesota and he performed superbly well," Dayton said last month of the legal charges. Of the payments, the governor said: "He earned it."
See the invoices below. If you are viewing this post on a mobile device, click to full site to see the embedded documents.
Headline updated to add the word "some."
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