Top researchers at the University of Minnesota Medical School made their case to legislators Tuesday for a $30 million infusion they say will help spur medical innovations and help develop cures for diseases such as HIV and prostate cancer.
The Senate's higher education omnibus bill, which lawmakers are finalizing this week, will include the $30 million for the medical school, said Higher Education Committee Chair Terri Bonoff, DFL-Minnetonak, who called it a "significant investment.
Bonoff and members of her committee heard a brief presentation by Sen. Dick Cohen, DFL-St. Paul, and U Medical School researchers who testified that the increased state funding will help elevate the school's standing nationally.
Cohen said that if the school doesn't receive the money, it would threaten its ability to retain high-caliber researchers who could leave for other top ranked medical schools or universities.
The medical school, which ranked in the top 15 in National Institutes of Health funding in the 1970s and ’80s, since has dropped to 30th nationally and 12th among public medical schools — which resulted in a drop in NIH funding.
Officials blame the drop on the loss of 90 tenured and tenure-track faculty from 1995-2001. U Medical School Dean Dr. Brooks Jackson said restoring the faculty could boost Minnesota’s ranking from 30th to 20th in as little as five years.
"This [the additional funding] is important if we want to elevate the stature of the medical school," Jackson told legislators. "This proposal will go a long way in getting us there."
The additional money would pay for 50 research faculty members over the course of eight years, improving research and attracting the best and brightest students.
Dr. Badrinath R. Konety, a specialist in bladder and prostate cancer, told lawmakers that many experts in his field were trained at the University of Minnesota, which had gained a strong reputation for research on the types of cancers he specializes in.
Net Minnesota tax collections were $2.3 billion in February and March, up nearly 5 percent from officials' projections in February, the Minnesota Management and Budget Office (MMB) reported Friday.
Revenues collected from individual and corporate income taxes and other miscellaneous revenues exceeded expectations for the month, officials said Monday. Individual income taxes for both months generated $850 million, about $21 million more than previously forecast. Sales tax receipts for October were down about $7 million.
Contained in Friday's report was an indication that low gas prices will spur economic activity in the state. MMB economists likened the low gas prices to tax cuts, "freeing up disposable income for spending on non-gasoline goods and services."
If low oil prices hold through the end of the year, economists estimate that spending on gasoline by Minnesotans will be as much as $2-billion less in 2015 than last year -- a savings of about $900 per household.
Democrats who control the Minnesota Senate said Thursday they had slightly adjusted spending goals for the legislative session, as they shift a bit more money into public schools, and environmental, economic development and agricultural programs.
Senate DFLers initially released "budget targets" at the end of March, but a release Thursday from Senate Majority Leader Tom Bakk said a few of those decisions had been tweaked. Such targets are a measure of how much state money the Senate's DFL majority wants to put into different sectors of state government spending.
Most notably, Senate DFLers shifted an additional $11.5 million into their total public school allotment. Another $11.5 million in additional funds is shifted into budgets for environmental, economic development and agricultural programs.
That money is being moved from two budget areas: $14 million from State Departments and Veterans, and another $9 million from an obscure spending category known as "Debt Service, Capital Projects and Other."
Budget targets from the Senate DFL and House GOP are vastly different, with details being filled in this week and next as legislative committees assemble budget omnibus bills. Dayton's spending proposal generally hews much more closely to the Senate DFL, though differences remain.
A bipartisan group of state lawmakers want to cut state taxes on premium cigars, as small retailers that sell the high-end products complain that the 2013 hike in tobacco taxes has cut deeply into their profits.
"This would not be rolling back taxes on all smoking by any stretch," said Rich Lewis, who has owned and operated Lewis Pipe & Tobacco in downtown Minneapolis for 40 years. "It would give us a chance to get our business going again."
Anti-smoking advocates have started mobilizing against the measure, as they draw links between evidence that smoking rates have fallen in Minnesota since the 2013 tobacco tax increase, which amounted to about $1.60 additional on a pack of cigarettes.
"Minnesota has a history of being hard on tobacco," said Michelle Morris, manager of tobacco prevention programs at the state chapter of the American Lung Association. "We should be celebrating these policies, not undoing them."
Still, the cigar tax cut proposal has high-powered support at the Capitol. Senate Majority Leader Tom Bakk, DFL-Cook, is a co-sponsor of the Senate bill. The Senate Taxes Committee reviewed the proposal Wednesday, and flagged it for possible inclusion in a broader omnibus tax bill.
Molly Moilanen, chief lobbyist for the anti-smoking coalition ClearWay Minnesota, said she thinks the cigar tax cut is likely to be included in the House's omnibus tax bill, making it a possible candidate for inclusion in the final tax bill that's sent to Gov. Mark Dayton. The House version of the bill is sponsored by nearly a dozen members of the Republican majority.
"They're going to decide if they want a tax break for tobacco companies and merchants at a time when they're proposing cuts to health care programs," Moilanen said of House Republicans. Preliminary estimates say it would cost the state about $1 million a year in lost tax proceeds if the cigar tax is reduced.
Sen. Dave Senjem, the chief Senate sponsor, said it's not a debate about the health implications of smoking. "That's a foregone conclusion," Senjem said. But as a matter of tax policy, Senjem said high-end cigars are taxed unfairly.
Every premium cigar, which is defined in state law as one that has been hand-rolled rather than machine-cut, is subject to a state tax that's 95 percent of its wholesale cost. That's capped at $3.50 per cigar, meaning every cigar that costs more than about $10 costs an additional $3.50 in taxes.
"So if you're trying to sell a box of 20 ten-dollar cigars, your customer is going to be paying $200 plus an additional $70 in taxes," Lewis said. Under the House and Senate bills, the cap would drop from $3.50 per cigar to 50 cents.
Increasingly, he said, customers have other options: they can go to cigar shops in Hudson, Wis., which already caps its per-cigar tax at 50 cents; or they can buy boxes of cigars online, where similarly low tax rates can be found.
"As it is now people just don't buy boxes of cigars anymore," Lewis said. He estimated his profits fell by about a quarter after the 2013 tobacco tax increase.
Senate Majority Leader Tom Bakk said if a bonding bill emerges from the Legislature this year, it will be modest, despite Gov. Mark Dayton's proposal today for nearly $850 million in bonding for infrastructure and other construction projects.
"That's not the real work of this session," said Bakk, a Cook Democrat. "(Bonding) is generally done in the even-numbered years. The budget is our priority this session," he said. He acknowledged bonding bills in odd-numbered years but noted their modest size compared to even-numbered years.
House Speaker Kurt Daudt said today House Republicans have no plans on a bonding bill.
Any bonding would start in the House as instructed by the Constitution, Bakk said. In case the House Republican majority changes course, Bakk said he has instructed Sen. LeRoy Stumpf, DFL-Plummer, to prepare a potential bill that would include money for the universities, wastewater infrastructure, housing and local roads and bridges, among other areas. He said the Senate bonding proposal would likely be more than recent odd-numbered year bonding bills of about $150 million, but less than Dayton's proposal.