Legislative leaders who want their own budget office saw that effort inch closer to reality Wednesday after a measure sponsored by top leaders in both chambers cleared a House committee.

The bill, sponsored by House Speaker Kurt Daudt, R-Crown, and Majority Leader Tom Bakk, DFL-Cook, in the Senate, passed 13-2 and would add to the duties of the Legislative Auditor's Office. The independent agency would be charged with preparing reports that estimate the cost of pending legislation, commonly called fiscal notes.

Currently, fiscal notes are prepared by state agencies affected by pending legislation. They are reviewed and approved by the Minnesota Management and Budget Office (MMB), an executive agency that reports to the governor. An MMB spokesman acknowledged that the potential for political bias to creep into reports always exists, but the process ensures that doesn't occur. A Star Tribune review of e-mails surrounding a recently contested fiscal note on a GOP-sponsored bill found that MMB tempered potentially political language by Department of Education staff before it was finalized.

Dayton criticized the measure Tuesday, calling it redundant. He defended MMB staff against what he said are criticisms of their credibility and integrity, calling such complaints unfounded and unwarranted.

Nonetheless, House Majority Leader Joyce Peppin, R-Rogers, who testified on behalf of the legislation Wednesday, said it was prompted by recurring complaints in the past by both Republican and DFL legislators, who questioned the accuracy of fiscal notes.

"We're trying to put together our budget, and we should be independent and be able to get the information from the legislative branch and not have to rely on the executive branch to put together our budget proposals," Peppin said.

Proponents say the measure would give the Legislature the same power as the executive branch to analyze potential costs — a model that exists in more than 30 states, according to a 2012 legislative audit on the fiscal-note process.

Several past challenges

In the past, legislators from both parties have sometimes questioned the veracity of fiscal notes.

Republicans most recently challenged a fiscal note issued less than two hours ahead of a Feb. 26 floor vote on a GOP-sponsored bill that would revise teacher seniority rules that guide layoffs. Some Republicans decried the last-minute report, which pegged the bill's cost at $895,000, as bogus. A revised report released Monday showed those costs were lowered to $375,000 for the next two years.

The bill, a top priority for Republicans, is a controversial measure opposed by most of the DFL Party and the state's teachers union.

It would require school districts to consider performance, not solely seniority, when forced to cut staff. The House approved the bill 70-63 earlier this month.

Education Minnesota, the union that represents 70,000 educators in the state, warned the morning of the final House vote that local costs to school districts would be steep because they would have to negotiate new layoff procedures. It also said districts would face increased litigation risk if layoffs are tied to teacher evaluations because teachers would likely challenge evaluations.

Those reasons were contained in the preliminary language of the fiscal note describing local ramifications, according to e-mails obtained by the Star Tribune under the Data Practices Act. The original language seemed too political to an MMB official who ordered it be revised, e-mails show.

Language tempered

Drafted by Tyler Livingston, a Minnesota Department of Education (MDE) supervisor and a former teacher and union member, the language was later tempered by Liz Connor, an MMB executive budget officer, e-mails show.

"I have some concerns on the local impact section of the note," Connor first wrote to an MDE staffer. "Some of the language references unfunded teacher evaluation systems, which is in itself somewhat political … Also, teacher evaluation is current law and the fiscal note shouldn't include comment on possible ramifications of that policy."

After the language was revised, Judy Kuck, the MDE staff member, wrote back: "Is that too political?"

The final version of the local impact removed the language regarding litigation exposure, as well as language calling the teacher evaluation law "unfunded" and "ineffective."

Josh Collins, a spokesman for MDE, said Livingston's comments were a "subjective prediction" based on his expertise in crafting the 2011 teacher development and evaluation law. He said they were not political statements, and that his background as a former educator is valued at the department.

John Pollard, an MMB spokesman, said Wednesday that the e-mails showed MMB staff did its job by making sure the political language was not included in the fiscal note.

"The process worked," Pollard said, noting that the final fiscal note removed the potentially problematic language.

A 2012 Legislative Auditor's Office report that weighed in on fiscal notes and found that they were, for the most part, prepared with "plausible assumptions." It said that some notes could use more explanation, but that in recent years, under two administrations, there had been no instances "in which agency officials or staff from the governor's office have intervened inappropriately in the fiscal note process."