Higher education bill work continues; Economic Development vetoed; Tax bill agreement reached

Legislative Update
May 8, 2009

Conferees close to agreement on higher education omnibus appropriation bill - waiting for targets
After meeting for almost two weeks, the higher education conference committee has made progress on many policy differences in the House and Senate bills, but without targets, they cannot negotiate the finance provisions. Conferees have adopted the language that requires the Pell grant surplus to stay in the state grant program, but no other decisions on how to spend the state grant surplus have been made. Minnesota State Colleges and Universities students are advocating for an increase in the living and miscellaneous expense, or LME allowance, which they said is the most equitable way to spend the state grant surplus.

Conferees considering the policy provisions have deleted the language that states the Minnesota State Colleges and Universities cannot fill administrative or managerial positions or use search firms for hiring.

The provision on American-made clothing in bookstores was amended to delete the word "only." The language now reads, "To the extent possible, a bookstore located on the campus of a public college or university in Minnesota must offer for sale clothing or articles of apparel that are manufactured in the United States of America. The college or university must make a report to the legislature on the results of efforts to comply with this section."

The provision on labor market data review for the Minnesota State Colleges and Universities was amended to read, "The board must assess labor market data when conducting college program reviews. Colleges must provide prospective students with the job placement rate for graduates of technical and occupational programs offered at the colleges."

Conferees also deleted the tuition guarantee provision that requires the system to offer students a four-year stable tuition rate. Also, the language in the House bill authorizing the sale of the Minnesota State College-Southeast Technical aviation training center was adopted.

The provision in the bill that required, as a condition of enrollment, that each entering Minnesota resident student complete the federal application for student aid, or FAFSA, was amended to now require all eligible institutions to adopt policies and procedures that ensure applicants are aware that they must annually complete the FAFSA to be eligible for financial aid. The Minnesota Office of Higher Education is to report to the Legislature.

The language on the oral health practitioner and dental therapist programs was amended to be the advanced dental therapist program. Either the University of Minnesota or the Minnesota State Colleges and Universities will be able to train dental therapists and advanced practice dental therapists.

The conference committee has adjourned until Monday. Because the higher education bill includes federal stimulus funds, more time may be needed to work through the complications presented by the federal stimulus package. Stay tuned.

Governor vetoes economic development bill - lawmakers go back to work
Gov. Tim Pawlenty vetoed the economic development conference committee report this week. The bill includes $350.6 million in total spending, representing a cut from forecasted base funding. The Senate had proposed $356 million and the House $368.4 million. "I think we have a really good compromise here," said economic development conference committee co-chair Sen. David Tomassoni, DFL-Chisholm, after the conferees adopted the report. Tomassoni said he did not like some of the budget cuts included in the final bill, but said they were made in the interest of reaching a compromise with the governor’s office.

The governor stated in his veto message to the Legislature, that the items he felt necessitated a veto were not subject to line-item veto, therefore triggering a veto of the entire bill. One of the biggest reasons given by the governor for vetoing the bill is the provision that forgives a loan payment by the city of St. Paul to the state of Minnesota for the Saint Paul River Centre.

Included in the bill was $1 million from the 21st Century Minerals Fund for a grant to the Northeast Higher Education District for planning, design, and construction of classrooms and housing facilities for upper-division students in the engineering program.

Also included was language that directs the Commissioner of the Department of Employment and Economic Development to lead a project to provide advice on state agency collaboration in the design, coordination, and administration of a strategic science and technology program for the state. A representative of the Minnesota State Colleges and Universities was to be a project member.

Conferees reach agreement on tax bill - will likely be vetoed
Working late into the night Thursday, the tax conference committee passed a tax bill that would raise approximately $1 billion from new taxes to fund K-12 schools, nursing homes and hospitals. The bill adds a new fourth-tier income tax rate of 9 percent for married couples filing jointly and earning more than $250,000, and for single taxpayers making more than $141,250. The 9 percent rate sunsets after tax year 2013 if the February 2013 economic forecast shows a general fund balance of $500 million or more. The bill also charges credit card companies a 30 percent surtax on income from interest exceeding 15 percent, raises the sales tax on alcoholic beverages from 2.5 to 5 percent and charges an excise tax on alcoholic beverages. Of the revenue raised from the different taxes, $586 million would fund K-12 education, $288 million would go to nursing homes and long-term care, and $114 million to hospitals.

The conference committee report is currently being debated on the House floor. The bill will likely be vetoed by Gov. Pawlenty who has said he will not sign any bill with tax increases included. The governor’s budget proposes using $1 billion from tobacco bonds that will have to be repaid over 20 years. Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said that if the bill is vetoed, deeper cuts can be expected in E-12 education and health care.

Bonding bill still being debated
Conferees for the capital investment bill continue to meet and negotiate a number of projects. This week, lawmakers discussed flood mitigation, commuter and passenger rail projects and transit projects. For the Minnesota State Colleges and Universities, both the House and Senate are now at $40 million for HEAPR and both bodies include all five vetoed projects from the 2008 session. At the time of this writing, a conference committee has not been called.

With May 18 deadline approaching lawmakers continue session-ending negotiations
While conference committees meet to wrap up appropriation bills, the Legislative Commission on Planning and Fiscal Policy continues to meet almost daily to reach agreement on the $6.4 billion budget deficit. The commission, chaired by Speaker Margaret Anderson Kelliher, DFL-Minneapolis, has become the forum for transparency regarding end-of-session negotiations.

Speaker Anderson Kelliher said that federal stabilization money is complicating the mix in setting spending targets, especially in the areas of health and human services, K-12 education and higher education. Thursday was the final deadline for conference committee reports to be finished. However, the House and Senate voted to amend their Joint Rules regarding committee deadlines. In Thursday’s floor session, Majority Leader Tony Sertich, DFL-Chisholm, referenced Minnesota Management and Budget Commissioner Tom Hanson who stated in a recent commission hearing that he would rather see them all take a little more time and not rush through bills just to meet a deadline.

With May 18 just a little more than a week away, many wonder if the Legislature is headed into overtime. Stay tuned.

Here's What's Happening at the Capitol:
The legislative schedule is fluid and subject to change. Please watch the House and Senate schedules posted on the Legislature web site.

Monday, May 11

8:30 AM
House State Government Finance
Room: Basement State Office Building
Chair: Rep. Phyllis Kahn
Agenda:
HF0354 (Hilstrom) Mortgage foreclosure proceedings on homestead property mediation provided prior to commencement, and homestead-lender mediation account created;
HF0723 (Murphy, M.) Omnibus retirement bill;
HF0866 (Hosch) School districts required to obtain employee health coverage through the public employees insurance program;
HF1032 (Fritz) Self-advocacy program established for persons with developmental disabilities, and appropriated money transferred.

At the call of the Chair
Higher Education Conference Committee
Room: 118 Capitol
Chairs: Sen. Sandra L. Pappas and Rep. Tom Rukavina
Agenda: S.F. 2083-Pappas: Omnibus higher education appropriations.

Time TBA
Legislative Commission on Planning and Fiscal Policy
Room: TBA
Chair: Speaker Margaret Anderson Kelliher
Agenda: TBA