The Minnesota State Capitol, Minnesotans needing affordable housing and higher education institutions will see some of the most profound transformations as part of a $1.17 billion package of state-backed construction projects.
The Minnesota House overwhelmingly passed the measure early Friday morning and it now goes to the Senate for final approval.
The measure includes $126 million to finish the State Capitol renovation – the single-largest item in the package.
“Bonding bills have many good things in them, and many things that are less good,” said state Rep. Dean Urdahl, R-Grove City. He said that for him, the Capitol renovation outweighs the things he finds less desirable.
Legislators set aside $240 million for new and renovated buildings at the state’s higher education institutions, including money for the Tate Laboratory of Physics at the University of Minnesota and a clinical sciences facility at Minnesota State University, Mankato.
The agreement includes $100 million for affordable housing, the largest housing investment in state history. Community leaders from around Minnesota have pleaded with state officials for more housing, saying the limited supply is holding back growth in their regions.
Legislators want $56 million to renovate the Minnesota Security Hospital, a psychiatric facility in St. Peter. They also want nearly $30 million for the Department of Corrections, including a perimeter fence at the correctional center in Shakopee, coming less than a year after an inmate escaped from the facility.
Democrats included $22 million for the Lewis and Clark Regional Water System, a multistate project to pipe water from South Dakota to a handful of southwestern Minnesota communities with unreliable water supplies.
Lawmakers have also agreed to allow local communities to borrow money to pay for the remainder of the $69 million project. The state will increase aid to local communities to pay a large share of the local debt load.
The state is paying for convention center expansions in Rochester, Mankato and St. Cloud, projects that have been passed over for years.
The measure includes money to redevelop Nicollet Mall, expand the Minnesota Children’s Museum in St. Paul and renovate Duluth’s historic NorShor Theatre.
Minnesota Zoo will get $12 million from the state, including $5 million for Heart of the Zoo II and the rest in asset preservation and new exhibits.
The House overwhelmingly passed the $846 million borrowing portion by a vote of 92-40. An additional $200 million in cash passed a short time later, 82-50.
Legislative leaders who negotiated the construction package asked Gov. Mark Dayton to sign a letter pledging not to veto any of the projects.
He replied with a last-minute list of his own requirements, including passage of a government reform measure, a provision that requires disclosure of toxic chemicals in children’s products and a handful of other provisions.
Negotiations continued early Friday morning and Dayton had yet to sign the letter.
Gov. Mark Dayton’s staffers were walking around the Capitol around midnight passing out a list of last-minute items the governor was insisting upon as legislators finished the final measures of the session.
The governor's staff released the list after legislative leaders asked the governor to sign a letter guaranteeing he would not veto the $1.17 billion package of state construction projects, which was painstakingly negotiated between DFL and GOP leaders.
Dayton is seeking passage of a government streamlining measure regarding rule making.
Dayton is also seeking passage of the the 2014 Toxic Free Kids Act, which would require manufacturers to disclose presence of toxic chemicals in toys, school supplies and personal care products. The measure has endured a wave of opposition from the business community.
The governor is also pipeline safety requirements and an assessment on pipelines.
Dayton also wants $500,000 to pay for sober schools.
The governor is also demanding tougher dog and cat breeding laws, along with $310,000 in 2015 to implement the changes.
Advocates have been pressing for tougher regulations for commercial breeding facilities through licensing, inspection and enforcement of commercial breeding facilities. They are also seeking civil and criminal penalties for breeders that break the law.
The governor also instructed legislators not to pass a measure that would ban the state from imposing sprinkler requirements in larger, new homes.
Members of a special legislative committee harshly criticized the Minnesota State Lottery’s expansion into online ticket sales Tuesday, and appear willing to end the Internet venture.
“I know it’s a difficult issue, a controversial issue, people have money in it,” said Sen. Roger Chamberlain, R-Lino Lakes. But the lottery director “entered into a bad deal" with online vendors.
A bipartisan coalition of legislators oppose the lottery’s expansion into online scratch-off lottery ticket sales, saying lottery officials did so without authorization. They are also critical of the lottery for embarking on a new initiative to sell lottery tickets at high-tech gas pumps.
Lottery director Ed Van Petten said they are merely selling the same games they always have, only now through the Internet and gas pumps. He insists they do not need legislative permission to do so.
The lottery's online expansion has drawn the attention of charitable gambling advocates, tribal casinos and convenience store owners fearing that the online sales will cut into their businesses.
Van Petten told the committee that prohibiting online sales will make it harder to reach younger customers, a computer savvy group that has shown less interest in traditional lottery tickets.
“We have found simply that the lottery is not on the minds of young adults,” he said. “We just feel like the added brand awareness, that the Internet presence will bring, will educate our players and bring new players into the retail environment.”
Lottery tickets sales are declining, but profits have remained strong as record lottery payouts have spurred existing customers to spend even more.
Halting online sales could cost the state millions, both from breaking contracts with online vendors and in lower profits for the state. Lottery profits are specifically earmarked to go into the state general fund and for a list of environmental and conservation efforts.
Since February, the new online games account for just $235,000 compared to $145 million in conventional paper ticket sales.
Van Petten praised the state’s charitable gambling industry and said does not aim to compete with them. “It’s a great system and I have no intention in trying to harm them,” he said.
Rep. Leon Lillie, DFL- North St. Paul, criticized Van Petten for not being more available to legislators with questions and concerns in the last month.
“I feel like we are being held hostage” by the lottery’s contract with online vendors, Lillie said. “I am greatly disappointed in so many different areas.”
In an interview after the hearing, Van Petten said he has attempted to provide information whenever legislators asked for it.
“I am not a lobbyist, I am an administrator and I have an agency to run,” he said. “I didn’t see the need for a continual presence.”
The full Legislature could vote to block the lottery’s online gambling initiative this week.
Minnesota tax collections lagged a little behind expectations in April, coming in at $1.7 billion.
Overall income tax, sales tax and corporate taxes were off a combined $12 million, about 0.7 percent below the forecast.
Individual income tax withholding in April was off the most, down $19 million. April sales tax receipts were up $17 million over the forecast, a rise of 4.3 percent over predictions.
For fiscal year 2014, tax collections are at $15.371 billion, $78 million below estimates.
Minnesota Management and Budget officials said in a statement that monthly revenue reports can swing wildly and “should be interpreted with caution.”
Nearly 1 million Minnesotans will get $103 million in new tax breaks as part of a measure finalized Thursday, with more than half devoted to direct property tax relief for homeowners, farmers and renters.
“We wanted to do it as direct as possible,” said state House Taxes Committee chairwoman Ann Lenczewski, DFL-Bloomington. Homeowners, renters and farmers will get “super-sized” rebates this year.
House and Senate DFL leaders have been working for weeks to agree on a tax relief package using the remainder of the state’s $1.2 billion projected budget surplus.
House Minority Leader Kurt Daudt, R-Crown, said there is strong bipartisan support for tax relief this session. He has not reviewed the measure in detail, but expected it would have at least some Republican support.
About 940,000 homeowners, renters and farmers will get additional tax relief as part of the new measure.
Legislators earmarked $17 million in property tax relief for more than 90,000 farmers. The average farmer in Minnesota will get $410 in direct property tax relief, an increase of about $200.
Homeowners will share $12.1 million in property tax relief and renters will get an additional $12.5 million in property tax relief for the year.
“There is a good balance of tax relief for everyone,” said Senate Taxes Committee chairman Rod Skoe, DFL–Clearbrook.
Legislators are devoting $4.5 million this year and $10 million next year to control invasive species at public-access boat landings.
The House and Senate also want to create a pilot project to help retention and recruitment of volunteer first-responders. Volunteers in 14 qualifying counties will get a $500 stipend to stay with their squad.
Military income paid to National Guard members, whether active duty or reserve, will be tax free, under the proposal.
Parents of students struggling with reading can get a tutoring credit of up to $2,000 a year. The proposal also changes the timing of when businesses can submit sales tax payments, easing cash flow problems for many businesses.
The measure also includes more than 80 pages refinements and changes to clean-up the tax code. Modernizing of the state's tax law is part of Gov. Mark Dayton’s massive government streamlining effort he launched earlier this year.
The measure does not include an expansion of the childcare credit, a provision Dayton has pushed for strongly.
The governor wants to expand the child tax credit to all families, not just low-income families. Doing so would increase the costs from $15 million a year to nearly $74 million.
House Speaker Paul Thissen, DFL-Minneapolis, said the tax credit is good policy, but too expensive to tackle this legislative session.
The House and Senate are expected to pass the tax measure next week, likely with strong bipartisan support.
This is the second tax relief measure of the session. All told, more than 2 million Minnesotans will get a total of $550 million in tax relief if the new measure becomes law.
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