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.
(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.
Expanding on a recent proposal by DFL. Gov. Mark Dayton, a Republican senator wants to offer a $1,000 non-refundable tax credit for families with young children to help offset the cost of child care.
The so-called Toddler Tax Credit, sponsored by Sen. Karin Housley, R-St. Mary's Point, would provide an estimated $500 million tax relief for families with children under the age of 5.
“The costs that go along with raising young children put a lot of financial strains on our families,” Housley said in a statement. “Any type of tax relief we can give these families will be a welcome break.”
Housley's proposal would have no income limits, unlike Dayton's proposal which would cap it $124,000 for households that claim the child-care tax credit.
The two proposals are aimed at addressing high child-care costs in Minnesota, where the cost of child care compared to median income makes the state the third-least-affordable in the country.
Child care costs most acutely affect single-parent households, according to a 2013 report by Child Care Aware, an industry group that compiles state-by-state data.
The average cost for child care annually was $13,876 for a single-parent household, eating up more than half of the parent’s annual median income, according to survey and census data. For married, two-parent households, the cost of child care annually ate up just more than 15 percent of their median income.
Senate Majority Leader Tom Bakk said he and Gov. Mark Dayton cleared the air in a private conversation Wednesday morning, settling once and for all on the legislative path out of the commissioner pay raise dispute that fractured their relationship, and also agreeing they have too many shared priorities as DFLers this session to let their feud fester.
Dayton hosted Bakk and other top DFL lawmakers at a breakfast meeting Wednesday at his official residence. "The way it kind of ended was he and I in the corner talking, and he actually put his hand on my shoulder and I put mine on his," said Bakk, DFL-Cook.
"The governor and I just have way too much work to do to be at odds with each other this session. I think we're fine," Bakk said. He said they agreed to jointly appear at a March 5 news conference to tout DFL transportation priorities this session.
Dayton's Deputy Chief of Staff, Linden Zakula, called it "a congenial and constructive meeting."
House Minority Leader Paul Thissen, also present at the meeting, said the tone between Bakk and Dayton was cordial and that the larger group discussion remained focused on issues.
The public falling out two weeks ago between the Capitol's two most powerful DFLers came after Dayton revealed that he had raised salaries for about 30 state commissioners to the tune of nearly $900,000 a year, with a handful getting an additional $35,000 a year in salary. Republicans and some DFLers bristled at the size of the raises, despite the 2013 Legislature having granted the governor the power to raise them without further legislative oversight.
Under the deal to resolve it, struck largely between Dayton and Republican House Speaker Kurt Daudt, the raises will be temporarily put on hold. Come July 1, Dayton could reinstate them to the full amount; but after that, the Legislature would regain the final authority on whether further raises are granted.
That's a major surrender for Dayton, who initially defended the raises as necessary to recruit and retain top talent for his cabinet. But the issue because a political distraction for the governor, who more recently has spoken repeatedly of the need to retrain the focus of the session on issues of more wide-ranging impact to Minnesotans.
The raise issue got attached to an unrelated stopgap spending bill that distributes about $16 million to several state agencies that encountered unanticipated costs in recent months. A House-Senate conference committee was set to meet Wednesday afternoon to finish up that legislation, and Bakk and Daudt both said they expected their respective chambers to take a final vote on the matter on Thursday.