Top leaders in the Minnesota House and Senate have proposed creating a legislative budget office to provide legislators "nonpartisan, accurate, and timely information on the fiscal impact of proposed legislation."
The bills, introduced Monday, come after Republicans late last week questioned a report issued just hours ahead of a floor vote on a GOP-sponsored bill that would revise teacher seniority rules that guide layoffs.
The report, known as a fiscal note, was prepared by the Department of Education and approved by the Minnesota Management and Budget Office (MMB).
Under the current structure, fiscal notes are prepared by agencies who would be affected by proposed legislation. It is then approved by MMB. Lawmakers from both parties have in the past questioned analysis, raising questions of partisanship.
It would require that state departments and agencies, as well as the state Supreme Court, provide information to the proposed Legislative Budget Office.
Democrats and Republicans at the Capitol agreed Friday that Minnesota's projected $1.9 billion budget surplus is great news for the state, but there was considerably less agreement on what to do with it.
"Today is good news for Minnesotans," said House Speaker Kurt Daudt, R-Crown, echoing comments by Gov. Mark Dayton and DFL legislative leaders.
But, where Dayton and DFL allies suggested greater spending on areas like education and transportation, the GOP's emphasis was as-yet-unspecified tax relief -- and the argument that Dayton now should jettison his proposal to raise state taxes on gasoline for transportation projects.
"I think this surplus means Democrats can stop talking about a gas tax in St. Paul," Daudt said. That's after Dayton said just a few minutes earlier that he intended to proceed with that proposal, which involves a new, 6-percent-per- gallon tax on gas at the wholesale level. Daudt said a portion of the surplus should be spent directly on rebuilding roads and bridges.
Daudt was elusive about what kind of tax relief Republicans might pursue. But he suggested at least $900 million, or about half the new surplus figure, should be returned to taxpayers. Whether that might come in the form of wide-reaching relief, like an income or sales tax cut or rebate, or more targeted relief through tax credits or carve-outs to smaller subsets of taxpayers, he wouldn't say.
"Anything is on the table," Daudt said.
Various Republican lawmakers have already introduced bills tending toward the latter approach, with tax relief for businesses meant to promote new job creation, tax relief for farmers and other proposals.
Still, it was clear Republicans have their eyes on spending some portion of the surplus. Besides roads and bridges, Daudt and other GOP leaders expressed an interest in boosting state payments to nursing homes and spending more on schools, among other possible priorities.
"We will be proposing spending but it will be spending targeted at results," said Senate Minority Leader David Hann, R-Eden Prairie.
As new spending requests from interest groups flooded in via press release, Democratic legislative leaders said the new money available should be focused toward programs that aid working families.
"We hope to hear the priorities of communities across the state," said Senate Deputy Majority Leader Jeff Hayden, DFL-Minneapolis.
The state's budget office on Friday reported that Minnesota's projected budget surplus grew to $1.9 billion, up $832 million from a previous projection, setting the final stage for budget negotiations at the Capitol.
The Minnesota Management and Budget Office, which publishes the twice-yearly budget and economic forecast, attributed the nearly doubling of the budget surplus to an improvement in the state's labor market, lower gas prices and a stronger U.S. dollar.
Officials said that since the November budget forecast, revenues are projected to rise an additional $616 million, or 1.5 percent. Projected spending, based on current law, is down $115 million, or 0.3 percent.
"Today's news is very good news, over the last few years, we have righted the ship," said Myron Frans, the recently appointed budget commissioner. In recent years, “we were facing large deficits as we began the budget process. By focusing on balanced budget proposals, we’ve paid back our schools, enhanced strong revenues for the state… we’ve carefully managed our state budget."
He went on: “Minnesota is truly a success story. We have a balanced and diverse economy. And we have a growing economy.”
Friday’s economic forecast showed improvements in the national and state economies that are expected to drive higher wage growth and an uptick in household formations, said state economist Laura Kalambokidis.
Higher consumer confidence nationally “is buoying consumer spending, which is the largest driver of the U.S. outlook,” Kalambokidis said.
Gov. Mark Dayton told reporters that the surplus, which he credited to the state’s well-performing economy, should be used to invest in education and transportation, his two main priorities. Though he’s not opposed to offering tax cuts as Republicans are putting forth, he said spending on schools and the state’s infrastructure would be a way to spur future economic development.
“Inevitably, there will be another national economic slowdown or downturn, and Minnesota’s economy will be affected like everyone else’s,” he said. “Our budget surplus will disappear, so I propose that we invest our collective good fortune in our collective better future.”
Friday’s revised figure will provide the framework with which legislators will craft their respective budget proposals. Dayton has already proposed a $42-billion budget, with the majority of new spending earmarked for education. He said Friday that his revised budget will call for an additional $444.2 million in spending to fund his legislative priorities.
He will present his revised proposal in early March.
DFL legislators said the surplus will provide additional money to fund their priorities, which include universal pre-kindergarten, a child-care tax credit similar to Dayton’s and increasing the state’s contribution to schools by boosting the per-pupil funding formula.
Republican legislators meanwhile are calling for much of the surplus to be returned to taxpayers. They also oppose a separate $11-billion transportation proposal by Dayton which calls for new sources of revenue, including a wholesale gas tax and an uptick in the metro-area sales tax .
This is a developing story. Check back later for updates and more details.
WASHINGTON -- Sen. Al Franken was elated Thursday when the Federal Communications Commission approved rules that ensure Internet providers treat all legal content equally.
"Last spring, I could not have predicted that we would be celebrating this victory today," Franken said, on the Senate floor. "The best principles of our democracy have won out. It's clear that the voices of the American people have been heard. I've often called net neutrality the free speech issue of our time."
Franken has long fought in the weeds on net neutrality. At a Judiciary Committee hearing last year on the issue, there was standing room only because so many "free Internet" activists filled the room to hear Franken speak. Franken often talked about Comcast's "100 lobbyists" on Capitol Hill fighting for the Time Warner merger and challenged fellow Judiciary Committee Republican Sen. Ted Cruz to explain his opposition to net neutrality. Cruz called the issue "the Obamacare for the Internet."
"It was a statement that seemed to demonstrate a basic misunderstanding of what net neutrality is and how the Internet works," Franken said Thursday."Some folks really don't get it."
Franken said thanks to the FCC's ruling -- commissioners split on a party line vote -- he can "stream videos of my amazingly cute grandson just as easily as I can stream a hit TV show."
(This post has been updated)
The issue that already divided Democrats at Minnesota's Capitol -- Gov. Mark Dayton's pay raises for his cabinet -- split Republicans on Thursday too, with the Senate GOP strongly against the deal struck between Dayton and Republican House Speaker Kurt Daudt to resolve the dispute.
The Senate narrowly approved the compromise Thursday, in a 35-29 vote that saw the chamber's Republicans in uniform opposition. A few hours later the House approved the bill much more widely, 108-20, with almost no debate.
The bill now heads to Dayton, who said he would sign it.
The lively Senate debate put majority Democrats in the position of defending Dayton and Daudt's deal, which put Dayton's $900,000 in pay raises to 30 state commissioners on hold and restores legislative oversight of future salary hikes, but gives Dayton a one-day window on July 1 to restore the raises.
"We are not stopping these increases. These increases will still go into effect," said Sen. Michelle Fischbach, R-Paynesville. Dayton would not say earlier Thursday whether he intends to restore the raises.
Dayton and Daudt negotiated the deal after Dayton's public falling-out with Senate DFL Leader Tom Bakk over the issue. Sen. Dick Cohen, DFL-St. Paul, stressed that point repeatedly as a succession of Republicans bashed the compromise, and suggested it would be a political liability for Democrats in 2016.
Minnesota Action Network, a right-leaning political group founded by former Sen. Norm Coleman, already circulated campaign-style literature targeting DFL Sen. Melisa Franzen of Edina over the pay raise issue. She's a likely target of Republicans hoping to pick up swing district seats in 2016.
But the support from most House Republicans could defang it as a winning political issue for Republicans. "I want to thank Speaker Daudt personally. He has said we're not going to politicize these issues of commissioner pay for the rest of the session," said House Minority Leader Paul Thissen, DFL-Minneapolis.
Few DFL senators spoke in favor of the raises, though Cohen called them defensible. "State government has lost significant folks of high competence and high quality," he said.
The pay issue got attached to a stopgap spending bill that includes about $16 million in emergency money for a handful of state agencies and operations.