State forecast released, Federal stimulus effect on Minnesota, System bonding project mean jobs, Charter school bill moves forward

Legislative Update
March 6, 2009

February forecast released

State leaders released the February economic forecast for the 2010-11 biennium earlier this week. With help from the federal stimulus package, the budget shortfall appears a bit better than expected – $4.6 billion as opposed to $6.4 billion. While the federal stimulus dollars help, it is not a permanent budget solution and will help reduce budgetary pressures only through fiscal year 2011. State economist Tom Stinson warned that with revenue collections down and expenditures up, Minnesota will have a long-term deficit. “This is probably going to be the longest and deepest recession since WWII,” he said.

The federal stimulus also offers enough new money to make a second unallotment unnecessary for the current biennium. Minnesota now is expected to end the 2008-09 biennium with a surplus of $236 million.

Gov. Tim Pawlenty said the state is facing a challenging time, and the belt will have to be tightened. Pawlenty highlighted the Inter Faculty Organization settlement that negotiated a wage freeze, saying it was a step in the right direction and will help state agencies plan. “This won’t eliminate the problem, but it will minimize layoffs,” he said.

The governor also said he will include a bonding recommendation of nearly $120 million in his supplemental budget. Pawlenty warned that creating a capital bill should be approached with caution, saying, “We have to be very mindful of managing the debt load of this state.”

After the forecast was released, House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said, “We are committed to solving our entire budget problem and positioning Minnesota for recovery and a brighter future.” House Minority Leader Marty Seifert, R-Marshall, pointed out that his caucus will be working with Democrats on compromises. Senate Minority Leader David Senjem, R-Rochester, said, “We need to solve this problem for the people that elected us.”

What does the federal stimulus bill mean for Minnesota?

The federal stimulus package has been the topic of conversation at the state Capitol this week. On Tuesday, House and Senate higher education committee members received an overview of how much funding the state would get for higher education. Mark Misukanis, acting director of the Minnesota Office of Higher Education, guided members through the federal legislation. Misukanis said about $800 million will come to Minnesota in the state stabilization fund. Eighty percent of this, or about $626 million, needs to be used for education, classified as K-12 or higher education. The federal stabilization funds are specifically intended to bring the state back to the 2006 education funding levels.

The federal stimulus package, also known as the American Recovery and Reinvestment Act, includes a Pell Grant increase to $5,350 in 2009-2010. Minnesota students will receive $108 million in Pell grants. The measure also contains more funding for work study. Of the $200 million nationally for this, Minnesota students would receive $3.89 million for two years. Campuses are required to match these funds by 25 percent, so the total increase in the state will be $5.19 million over two years. The bill also contains funding for competitive grants and broadband access, of which Minnesota colleges and universities can apply.

Misukanis said the next step is the governor’s supplemental budget, which he said should be out in the next two weeks. Overall, there is still much debate on exactly how the federal dollars should be used. The governor’s budget will help advance those conversations.

System bonding projects will put people to work

The Senate Higher Education Budget and Policy Division heard more about the Minnesota State Colleges and Universities and the University of Minnesota bonding proposals this week. Sally Grans, system director for facilities and programs for the Minnesota State Colleges and Universities, outlined the system’s current and future capital projects for committee members. Grans said five of the requested projects were approved by the Legislature last year, but later vetoed. The projects, which include renovation at North Hennepin Community College, classroom renovations on seven campuses, a health science center addition at Lake Superior College, a classroom center addition at Metropolitan State University and shop space addition and renovation at Mesabi Range Community and Technical College, are ready for bid. Grans said an additional four capital projects that were partially funded in 2008 are part of the proposal and can be bid within 120 days of funding.

Included in the system's 2009 capital request of $117 million is $50 million for repair and replacement projects at campuses around the state. Grans said $40 million, or 80 percent, of these projects could be under contract by December. Grans told committee members that the proposed projects will put people to work at approximately 1,500 construction and related jobs.

Committee members also approved language in two additional bills, SF 990 and SF 781, to be forwarded to the Capital Investment Committee in the form of a letter. SF 990 provides for bonding for the 2008 vetoed and partially funded projects and the University of Minnesota Bell Museum. SF 781 contains the repair and replacement projects for the higher education systems: $50 million for the Minnesota State Colleges and Universities and $35 million for the University of Minnesota. The system’s bonding request is scheduled next to be before the Senate Capital Investment committee Tuesday evening.

Charter school discussion takes center stage at Capitol

After days of discussion and testimony, the House K-12 Education Policy and Oversight committee approved a bill this week offering the most significant charter school reform in Minnesota since the state became the first in the nation to authorize charter schools in 1991. Session Daily reports that the original eight charter schools sponsored by school districts in 1991 were allowed to open as an experiment in school choice. Today, 153 charter schools sponsored by higher education institutions, nonprofit organizations and school districts educate 32,000 Minnesota students.

The bill, HF935, would strengthen and clarify ongoing responsibilities of the schools’ sponsors, improve their governance and fiscal accountability, and clarify the Department of Education’s oversight role. “This bill represents a lot of compromise and months of work,” said the bill’s author, Rep. Linda Slocum, DFL-Richfield.

Emergency stopgap passes to fund federal government another week

The last Congress was unable to pass appropriation bills providing funds for fiscal year 2009 prior to adjourning for the year, but members did pass a continuing resolution that would provide funding until today at previous spending levels. Fast forward to a new Congress, which is acting quickly to pass one large FY09 omnibus appropriations bill. Last week, the U.S. House of Representatives passed a single measure incorporating the remaining nine appropriation bills, including Labor-HHS-Education, into one large bill. The bill provides $4.4 billion more compared to the fiscal year 2008 funding levels for education overall. The Senate was supposed to pass the bill early this week, but had difficulty when the amount of amendments offered forced continuing debate on the bill. It is anticipated the Senate will wrap up debate Tuesday and vote on final passage. The current continuing resolution expires tonight at midnight, so Congress chose to pass a stopgag measure to fund the government through next Wednesday to avoid a shutdown of federal government.

Here's What's Happening at the Capitol:

This schedule shows all meetings that we are aware of at the time of publication that MAY have an impact on the system. This schedule may change. Please watch the House and Senate schedules posted on the Legislature web site (www.leg.state.mn.us).

Monday, March 9

11:00 AM *Note: Meeting will end at noon
Senate State Government Budget Division
Room: 112 Capitol
Chair: Sen. Don Betzold
Agenda:
S.F. 57-Rest: Minnesota management and budget (finance) commissioner duties modification.
S.F. 91-Rest: Searchable database of state expenditures web site requirement.
S.F. 107-Rest: State funds misuse provisions clarification, penalties enhancement and best practices for investigations development.

1:00 PM
House in Session
1:15 - Joint House/Senate Floor Session to elect the University of Minnesota Board of Regents

Tuesday, March 10

8:30 AM
House K-12 Education Policy Committee
Room: Basement State Office Building
Chair: Rep. Carlos Mariani
Agenda: HF501 (Mariani) Alternative graduation means created for students who have not successfully passed the Minnesota basic skills-test.
HF1037 (Swails) Home school mandates reduced.

8:30 AMHouse State and Local Government Operations Reform, Technology and ElectionsRoom: 200 State Office Building Chair: Rep. Gene Pelowski Agenda: HF1113 (Morgan) Early voting authorized.HF691 (Rukavina) Vacation donation program modified.

12:30 PM
Senate Higher Education Budget and Policy Division
Room: 123 Capitol
Chair: Sen. Sandra L. Pappas
Agenda: Discussion of OHE's Minnesota State Grant Review report
Discussion of OHE's Enrollment Patterns of Low-Income Families

2:45 PM
House Capital Investment Finance Division
Room: Basement Hearing Room
Chair: Rep. Alice Hausman
Agenda: HF 919 (Scalze) Specific information required for local capital improvement requests.
HF 918 (Hausman) General obligation bond sale provisions amended.
HF 1106 (Hausman) St. Paul Port Authority provided an application fee credit toward a future bond sale.
HF 562 (Wagenius) Higher education asset preservation standards modified.

2:45 PMHouse K-12 Education Finance DivisionRoom: 10 State Office Building Chair: Rep. Mindy Greiling Agenda: HF935 (Slocum) Charter school provisions modified.

4:30 PMHouse Early Childhood Finance and Policy DivisionRoom: 200 State Office Building Chair: Rep. Nora Slawik Agenda: HF106 (Swails) P-20 education partnership established HF1026 (Slawik) Early childhood education provisions amended

5:30 PM
Senate Capital Investment
Room: 123 Capitol
Chair: Sen. Keith Langseth
Agenda:
S.F. 781-Langseth: University of Minnesota and Minnesota State
Colleges and Universities (MnSCU) asset preservation bond issue and appropriation, 2009 Capital Investment bill.

7:00 PM
Legislative Commission on Pensions and Retirement
Room: 107 State Capitol
Chairs: Sen. Don Betzold
Agenda: SF197/HF318 (Skogen/Nornes): PERA; Service credit purchase for period of past due omitted contributions.
SF223/HF231 (Wiger/Lillie): MSRS/PERA; Teacher assistant retirement coverage exclusion option to qualify for deferred annuities augmentation.
SF281/HF260 (Anderson/Hausman); MFRA; Surviving spouse benefit eligibility specified.
SF305/HF122 (Bakk/Dill): MSRS; Disability benefit application filing date deadline exception.
SF605/HF757 (Jungbauer/Murphy, M.): DOT Pilots; Transportation department aircraft pilot disability and retirement provisions modification.
SF669/HF741 (Betzold/Kahn): MFRA/MPRA/PERA; Permitting Minneapolis Firefighters Relief Association and Minneapolis Police Relief Association membership in the Public Employees Retirement Association.
SF750/HF982 (Betzold/Murphy, M.): MSRS; Revise allowable service credit for job-share participants.

Wednesday, March 11

8:30 AM
House K-12 Education Policy
Room: Basement State Office Building
Chair: Rep. Carlos Mariani
Agenda: HF466 (Carlson) State Board of Education established.
HF1186 (Mariani) Center established for legislative educational analysis research and navigation in the next generation.
HF1187 (Mariani) Legislative and Citizen Commission on the Future of Public Education created.
HF648 (Mariani) Cardiopulmonary resuscitation and automated external defibrillator instruction guidelines established.

10:30 AM
House Bioscience and Workforce Development Policy and Oversight Division
Room: 200 State Office Building
Chair: Rep. Tim Mahoney
Agenda: HF1081 (Mahoney) Small growth business growth acceleration program eligibility expanded, matching funds required, and money appropriated.
HF744 (Mullery) Transitional employment training project funding provided, and money appropriated.
HF737 (Rukavina) Rehabilitation counselors for the blind certification provided.

12:30 PM
Senate Health, Housing and Family SecurityRoom: 15 Capitol
Chair: Sen. John MartyAgenda: *Note: The committee intends to act on SF1106. SF641 will be discussion only.
SF1106 (Lynch): Oral health practitioner licensure and regulation
SF641 (Prettner Solon): Dental therapists licensing and practice limitation

3:00 PM
Senate State and Local Government Operations and Oversight
Room: 123 Capitol
Chair: Sen. Ann H. Rest
Agenda: S.F. 815-Berglin: Medical supplies and equipment purchasing alliance.
S.F. 545-Prettner Solon: Mental health and substance abuse review licensed doctoral level psychologist final determination not to certify authorization; psychological impact of medications in psychology practice; health care reform review council membership
requirements modified.
S.F. 999-Kubly: Medical laboratory science professionals licensure requirements and medical laboratory science professional licensing advisory council creation.
S.F. 487-Clark: Office of early learning creation.
S.F. 866-Saltzman: Teachers reading instruction competence assessment licensure requirement.
S.F. 872-Higgins: State interoperability executive committee designation.
S.F. 82-Latz: Minnesota False Claims Act.
S.F. 729-Rest: Hennepin county human resources board and department personnel rules modifications.
S.F. 660-Marty: Automatic voter registration for drivers license applicants; secretary of state additional data requirement from public officials for voter registration system maintenance.
S.F. 661-Pappas: Postsecondary institutions resident student information report to secretary of state for voter registration purposes expansion; voter registration enhanced access to voter registration records and records of returned absentee ballots on the world wide web.
6:15 PMHouse Licensing DivisionRoom: 200 State Office Building Chair: Rep. Cy Thao Agenda: HF1226 (Thao) Licensure and practice limitations established for an oral health practitioner, fees established, and rulemaking requiredHF823 (Norton) Dental therapist fees, licensing, and practice limitations established

Thursday, March 12

8:30 AM
Senate E-12 Education Budget and Policy Division
Room: 112 Capitol
Chair: Sen. LeRoy A. Stumpf
Agenda:
S.F. 314-Skogen: Education finance operating referendum revocation voter signature requirement modification.
S.F. 851-Saltzman: Minnesota reading corps program establishment and appropriation.
S.F. 913-Bakk: Greenhouse gas emissions reduction; land use planning, development, incorporations and minimum acreage standards restrictions; redevelopment grant program bond issue and appropriations.

Friday, March 13

9:30 AMLegislative Commission on Pensions and RetirementRoom 107 CapitolChair: Senator Don BetzoldAgenda:S.F. 131 (Bonoff); H.F. 111 (Winkler): SBI; Require divestment of certain investments relating to Iran.S.F. 914 (Betzold); H.F. 1100 (Thissen): MERF consolidation with PERA-General.Other items as designated by the Commission chair.

Monday, March 16

9:30 AMLegislative Audit CommissionRoom: 107 State Capitol Chairs: Rep. Michael Beard, Sen. Ann Rest Agenda: Release evaluation report: MnSCU Occupational Programs