With hugs and applause, the joint House-Senate panel ironing out the Legislature's final tax deal finished its work shortly before midnight Saturday.
The deal includes tax increases on couples making more than $250,000 and singles making more than $150,000 in taxable income; a hefty cigarette tax increase; state spending to spruce up Rochester, a top Mayo Clinic priority; and, a little bit of money to explore the possibility of a new state office building. It also includes a one-year cap on local government levy increases.
The panel dealing with transportation issues also wrapped up and the one considering state government issues finished up their work around 1 a.m.
Those measures will not include what had been among their most controversial provisions. In the transportation measure, lawmakers considered but did not include either a gas tax increase or a metro sales tax; and the final state government bill will not include salary increases for lawmakers.
With all the budget committees finishing their work, lawmakers still had miles to go for a timely finish by Monday at midnight. The full House and Senate still need to pass the three budget measures to complete their work.
Some of the deadline pressure showed up among tired lawmakers, anxious to complete the task of approving Minnesota's next two year budget.
As the tax panel was concluding, Bakk, DFL-Cook, and House Speaker Paul Thissen, DFL-Minneapolis, appeared in the august committee room, causing a bit of a stir.
As the committee turned to look at Bakk, he joked: "It's the guy that's saying wrap it up already."
"All these people want to go home," Bakk said with a smile.
A few moments later, House Speaker Paul Thissen added his own joking instruction: "Vote!"
As of 1 a.m. Sunday, the House was still debating an education funding measure, which would pay for all day kindergarten statewide. The Senate is expected to take that measure up on Sunday around 1 p.m. And both the House and Senate still needed to approve the tax, transportation and state government measures.
Legislative leaders were also hoping to revive a measure to fund state capital projects. Those bonding bills require a supermajority and on Friday an $800 million borrowing bill failed to reach that bar in the House.
Bakk said he hoped and Thissen hoped to meet with Republican leaders on Sunday to see if they can reach an agreement on a slimmed down borrowing bill that could win Republican votes.
Meanwhile, if the legislative leaders had a deal on approving a minimum wage -- a top DFL priority that fell to the side when DFLers in the House and Senate could not agree on how much to hike the wage floor -- they did not let on.
"I would never say anything's over. But I have not had any discussions today about it," Thissen said late Saturday. The House passed a wage hike that would bring the minimum to $9.50 an hour.
Bakk said that's too much for the Senate, which passed a minimum wage hike to $7.75 an hour.
"Eight dollars is the authority that the caucus gave me that I can go to. I know I have 34 votes for eight," Bakk said.
The Minnesota Senate signed off on a $11.3 billion budget for the state’s health and human services programs Saturday.
The bill is one of the largest the Legislature will pass in the final days of the 2013 session and it passed on a party-line vote. Among other things, the HHS omnibus includes a 5 percent pay increase for nursing home caregivers who have not gotten a raise in four years. The budget also includes extra funding for in-school mental health care and assistance for families seeking pricey autism therapy for their children.
“This bill is a good bill that moves Minnesota forward,” said Senate Health and Human Services Chairman Tony Loury, DFL-Kerrick, before the Saturday vote.
The bill passed the House Friday night and now moves to the governor's desk for his signature. The new budget year starts in July.
Republicans blasted the bill, both the way it is funded and the things it won’t be funding. In a year when the Democratic leadership is pushing a $2 billion tax bill, Republicans argued that HHS – the part of the budget that serves the oldest, sickest and poorest Minnesotans – shouldn’t have been singled out for $50 million in budget cuts.
Senate Minority Leader David Hann, R-Eden Prairie, warned that the state’s HHS budget is too reliant on federal funding. The state will receive millions of dollars from Washington to help with the rollout of the new federal Affordable Care Act programs.
Hann said he has no confidence that those funds will be there in the long term. If they go away, he said Minnesota will be left with the bill for new programs designed to ensure that Minnesotans have access to affordable health care and health insurance.
“I think the Health and Human Services budget is really about setting priorities,” Hann said. “We have to talk about reform, how we’re going to meet those priorities in a way that is sustainable. We have to do that in a way that is fiscally disciplined. I think this bill that we have before us fails on all three of those points.”
The health and human services budget took a battering during the recession, including more than a billion dollars’ worth of cuts in the last budget cycle.
“Those were incredibly devastating cuts,” Lourey said. “The cuts last biennium were so deep, we put in words, in our budget, that we were going to discontinue people from cancer treatments … we were going to discontinue people from kidney dialysis. Lifesaving treatments. That was a hard thing to watch.”
The new HHS budget is about 6 percent larger than the current budget. An aging population and rising demand keep pushing the budget higher each year.
In an effort to curb that growth, the DFL leadership called for $150 million in targeted cuts to the health and human services budget. During weekend budget negotiations with Gov. Mark Dayton, they reduced that target to $50 million – leaving HHS negotiators with enough extra money to fund pay increased for nursing home workers.
Those proposed sparked an outcry, particularly from the state’s caregivers, who had not seen an increase in their wages in years. The new budget includes $30 million for caregiver raises, Lourey said.
Mayo Clinic's proposed expansion in Rochester has brought one legislator to tears.
Late Friday night, a powerful tax committee patched together the final details of the tax proposal. A rare moment of exhilaration came as legislators finalized the state’s contribution to Mayo Clinic’s multibillion-dollar expansion in Rochester.
The complex and politically dicey subsidy appeared dead several times over the last several months, only to be miraculously resurrected in recent days.
When the committee gave its unanimous endorsement to the project, a rare wave of applause erupted in a room stuffed with groggy lobbyists, legislative staffers and tax watchers.
House Taxes Chairwoman Ann Lenczewski, a relentless critic of the earlier funding plan, apologized “for being such a pest” throughout negotiations.
Republican Sen. Dave Senjem, a retired manager at Mayo and lead supporter of the project, walked over and gave a long hug to Rep. Kim Norton, a Rochester Democrat who also pushed the plan.
Tears streamed down his face as Senjem returned to his chair.
As a sign of Senjem’s devotion to the project, he is expected to vote for the DFL led tax bill — even the taxes that many in his party fiercely oppose.
Both the House and Senate still need to approve the overall tax bill, which includes the Mayo project. Gov. Mark Dayton took a personal interest in the project, directing his chief of staff to personally help guide the project to completion. His staff says he will sign the measure when it lands on his desk.
The Minnesota House has approved the budget for the state's health and human services programs for the next two yeras.
The HHS budget provides services to some of the oldest, sickest and poorest Minnesotans and it is one of the largest slices of the state budget. The House approved the HHS conference report by a vote of 73-61 late Friday night, after an hour and a half of debate.
Among other things, the new HHS omnibus bill will offer a 5 percent pay increase to nursing home caregivers, expand mental health services for children and reduce spending on the fast-growing Health and Human Services budget by $50 million over the next two years.
"I think it's a good bill," said House Health and Human Services Finance Chairman Thomas Huntley, DFL-Duluth.
A $6 billion-a-year budget "sounds like a ton of money," Huntley said. "But hardly any of it goes to the welfare moms. Ninety percent of it goes to seniors who are in nursing homes, or who we're trying to keep out of nursing homes, or it goes to people with disabilities. That's where the money is."
Republicans, however, blasted the budget, and particularly the $50 million in cuts. In a year when the Democratic majority was pushing a $2 billion tax bill, they arged that there was no excuse for cutting a budget that serves the needy.
"Over $2 billion in new fees, and instead of providing stable funding for long-term care providers, you want to rely on shifts and gimmicks," said House Minority Leader Kurt Daudt, R-Crown. "Why aren't you prioritizing nursing homes and the disabled?...We can do better."
Huntley shot back that this was the first time he'd ever been criticized by the GOP for not spending enough money.
House Majority Leader Erin Murphy noted that the bill will give nursing home caregivers their first raise in more than four years.
"It does far more for Minnesota, and Minnesota seniors, than Republican lip service," she said.
The bill also sets out the framework to transition MinnesotaCare into the state's new Basic Health Program. These plans, part of the new Affordable Care Act, are meant ensure that Minnesotans who live on the brink of poverty, but do not qualify for Medicaid, can afford health insurance.
The federal government failed to come up with guidelines for these new programs, so Minnesota simply petitioned the government to use the existing MinnesotaCare program as a template. Which makes Minnesota the first state to get its plan off the ground, Huntley said.
"We've just turned MinnesotaCare into the Basic Health Plan," Huntley said. The federal government will reward the state by covering 100 percent of the cost of the program for the next several years, freeing money up in the HHS budget for other purposes.
But a few months ago,Huntley was furious when the initial budget targets from the House and Senate increased funding for almost every state agency except HHS.
"I was ready to resign, but I got over that in a few weeks," he joked. "We went from a $150 million cut to a $50 million cut, which made life a lot easier, and we also got a lot of money out of the Affordable Care Act, and the Department of Human Services found some ways to make some additional money."
Democratic leaders, alarmed by the ballooning growth of the HHS budget, set out to slow that growth with $150 million in targeted cuts. Those targets sparked protests, particularly from caregivers, who had not seen a pay raise from the state in almost five years.
Republicans also blasted the cuts. During an April floor debate, they condemned the idea of cutting the budget for the sick an elderly in a year when the Democratic majority was pushing tax increases and new revenue sources that would raise $2 billion.
On Thursday, Gov. Mark Dayton and Democratic leaders emerged from closed-door budget negotiations to announce that the $150 million in cuts had been scaled back to $50 million. That gave House and Senate negotiators enough funds to provide a modest pay raise to nursing home caregivers.
The conference report now moves to the Senate.
A $800 million bonding bill, loaded with infrastructure projects for every corner of the state, went down in flames in the Minnesota House on Friday.
The vote means there will be no funds to repair the crumbling state Capitol, or to expand three regional civic centers or fund $45 million worth of transit projects for the Metropolitan Council, or dozens of other projects around the state.
"One word: tragic," said House Capital Investment Committee Chairwoman Alice Hausman, DFL-St. Paul, who worked for months to try to assemble a bill that would get the eight Republican votes she needed. Bonding bills require a super-majority of 81 votes to pass.
Only three Republicans -- Reps. Mark Uglem of Champlin, Chris Swedzinski of Ghent, and Tama Theis of St. Cloud -- joined the majority in the final 76-56 vote. Some Republicans held up newspapers in a studied show of indifference as they voted no.
Republican leaders in both the House and Senate had signaled that the budget and tax bills were their priority, and that they would not support a bonding bill, even one filled with funds and projects many districts were anxious to receive. Bonding bills leverage the state's borrowing ability to help communities pay for projects they might not be able to afford themselves. This one would have funded everything from road, bridge and sewer projects, to parks and museums, and almost $19 million to fund improvements at the Minnesota Veterans Home in Minneapolis.
"You have to eat your supper before you have your dessert, and the bonding bill was always the dessert," said House Minority Leader Matt Dean, R-Dellwood. "Our job here is to get our budgets done, and here we are with our backs against the wall and we don't have our budget done."
Hausman, who said she had commitments from at least eight Republicans who promised to vote for the bill, said there was no time to try to push a pared-down bonding bill before the session ends on Monday.
"What would be the point of taking it up tomorrow?" she said. "We have been trying for months to solidify the votes. So overnight, nothing's going to change. It's inconceivable to me how people could make this kind of judgement."
Even if the GOP pledged to support such a bill, Hausman said, "why would we ever trust that they were telling the truth?"