Gov. Mark Dayton’s administration rolled out a comprehensive government streamlining package Tuesday, outlining more than 1,000 proposed changes to make state services easier and more efficient.
The overhaul seeks changes in every corner of state government, from speeding environmental permitting to making it easier and faster the buy fishing licenses and pay taxes. The initiative also seeks to root out antiquated laws clogging up the books and adding work for state agencies.
Iron Range Resources and Rehabilitation Board Chairman Tony Sertich, who is leading the streamlining effort for Dayton’s administration, said state law is filled with antiquated provisions. He noted one state law even has a detailed prescription of exactly who must capture or kill wild boars in the state.
Dayton is staking a lot of political currency on the outcome of the initiative, which he calls “unsession.” He wants legislators to devote a significant amount of time weeding out antiquated or cumbersome laws.
But Dayton is not merely trying to declutter the state law books. He wants to make it easier and less aggravating for consumers of state services, which has been a frequent gripe when dealing with state government.
Dayton is not the first governor to try such an effort, but it is the most concerted one in a long time.
In selecting Sertich to lead the effort, Dayton has tapped a former House Majority Leader with a strong sense of how to get things through the sometimes unruly legislative bodies.
Dayton’s top policy advisers have been meeting regularly and touching base with legislative committee chairs, who will be vital to the success or failure of the effort.
Legislative committees will begin holding hearings on the streamlining measures this week.
A new report by the Minnesota Department of Revenue shows that property taxes held steady this year, down about $8 million after all state property tax refunds.
“This drop in property taxes is good news for Minnesotans, who for years have been hammered by double-digit property tax increases," DFL Gov. Mark Dayton said. "Thanks to the relief provided by the DFL Legislature last year, property taxes are actually going down statewide, for the first time in 12 years."
The amount of savings is less than Dayton and Democratic legislators predicted last year, but Minnesota Department of Revenue Commissioner Myron Frans called it “great progress.”
Republicans had warned that Democrats' desire to lower property taxes by increasing aid to local governments wouldn’t work, arguing that cities and counties would merely bulk up their budgets without lowering local property taxes.
"Despite Democrats repeated promises to reduce property taxes, Minnesotans learned today they are facing the highest property tax levy in state history,” said Hanska Rep. Paul Torkelson, the Republican lead on the House Property and Local Tax Division Committee. “Governor Dayton and Democrats set the target and they missed. After Democrats took $2.4 billion in new taxes and fees this past session, hardworking taxpayers can't afford to pay more."
Revenue Department officials found that city, county and school levies went up about $125 million this year, but that was before $133 million in state property tax aids and credits were returned to taxpayers.
Since 2002, property taxes rose an average of $332 million each year, according to the Revenue Department.
Frans said the state has finally broken the cycle.
“Overall, the number is one we are pretty satisfied with,” he said.
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.
Facing a tight deadline, DFL House leaders are rushing ahead with a tax-relief proposal that could save Minnesotans $500 million over the next year.
Roughly 1 million Minnesota taxpayers will see a tax reduction, including 650,000 married filers whose taxes would go down an average of $120. The package includes tax relief for married couples, parents of adopted children and those who lost their home to foreclosure.
The proposal also includes the repeal of three new business sales taxes on warehousing services and telecommunications equipment and repair.
DFL House Speaker Paul Thissen said Thursday that the House could approve the entire package next week. The House Taxes Committee is expected to pass the measure Thursday, and likely with bipartisan support.
The Senate would then need to consider the proposal, which generally has strong support of DFL Gov. Mark Dayton.
Some legislators are racing to complete the tax measure as Tax Day looms and the much-criticized warehousing tax is set to kick in next month.
The proposal hinges on Friday's new economic forecast, which is expected to show a budget surplus of close to $1 billion.
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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