Monday, May 17, 2010

Final legislative wrap-up

2010 Legislative Summary
Session review


The 2010 legislative session began with a flurry of activity Feb. 4 with the Senate Capital Investment committee rolling out their version of a bonding bill the first day of session. After spending the summer and fall traveling the state touring bonding projects, lawmakers were ready to get to work on a bill. Between the House, Senate and Minnesota Management and Budget, colleges and universities in the system hosted over 50 bonding visits. Traditionally, the bonding bill is not completed until the end of session; however, Rep. Alice Hasuman, DFL-St. Paul, and Sen. Keith Langseth, DFL-Glyndon, chairs of the House and Senate Capital Investment committees, said that the bill should stand alone and not be delayed until the end of session, because interest rates are low and bids are coming in low.

Lawmakers passed two different bills out of conference committee. When it appeared the governor would veto the first bill, legislative leaders pulled the bill back to re-work it and include projects the governor wanted. The final bill sent to the governor included $239 million (including user financing) in projects and repair and replacement for the Minnesota State Colleges and Universities system, which was a reduction of $66 million from the first bill. The governor line-item vetoed the bonding bill down to $680 million with cuts to the system projects over $130 million. In the final days of session, lawmakers attempted to make one last run at a bonding bill to include the vetoed projects, however the bill, HF 3492, ended up being only technical in nature.

Also competing for lawmakers attention in what is normally considered a bonding year, was an anticipated $1.2 billion budget shortfall for the current biennium, which was later adjusted in the February Forecast to $994 million for the biennium. For the upcoming FY2012-13 biennium, Minnesota Management and Budget projected a $5.8 billion shortfall.

A total reduction of $46.6 million was targeted for higher education. Under the 2009 American Recovery and Reinvestment Act, each state was required to follow a “maintenance of effort” spending proposal in education. If a state chose to receive federal education funding, it could not dip below the 2006 funding levels. This meant that Minnesota could only cut $46.6 million more out of the higher education budget in fiscal year 2011. If the cut was distributed in accordance with 2006 funding levels, the Minnesota State Colleges and Universities would receive a $10.467 million cut while the University of Minnesota would see a reduction of 36.1 million. The governor recommended a reduction to the Minnesota State Colleges and Universities system of $10.5 million and the House and Senate followed with the same recommendation for the system.

The Legislature approached the almost $1 billion budget deficit in three phases. The first phase resolved approximately one-third of the state’s budget deficit through a supplemental budget bill that made $313 million in reductions to state agencies and cuts to county and city aid. The reductions included $10.5 million to the Minnesota State Colleges and Universities system. The next two phases in the budget balancing process were slated to be the health and human services bill and the K-12 education bill. After passing the first budget bill, lawmakers went home to their districts for an Easter/Passover break and there were rumors around the Capitol that the Legislature would take an extended recess while waiting for Congress to pass legislation that would appropriate a little over $400 million to the state in federal funds.

However, legislators stayed in St. Paul and worked on other issues, such as K-12 education initiatives to help strengthen a potential second application for Race to the Top. As lawmakers worked to balance the remaining deficit, which included using the $408 million in federal funds to plug the majority of the remaining $536 million shortfall, two things happened; it became clear Congress would not pass legislation in time to rely on the $408 million in federal funding, and the Minnesota Supreme Court overturned Gov. Pawlenty’s unallotment from the 2009 session. While a nutritional program was the only plaintiff in the case and the court ruled on that program only, lawmakers and the governor were concerned about other cases being brought forward and sought to resolve what they considered to be a $3 billion deficit.

The last week of session, the Legislature passed a budget balancing bill that resolved the $3 billion deficit, and included $433 million in revenue through a fourth tier income tax bracket. As soon as the bill arrived on the governor’s desk he vetoed it claiming the tax increase would disproportionately harm small business owners and hamper job creation in the state. Gov. Pawlenty also said the bill does not do enough to address a projected nearly $5 billion deficit for the 2012-2013 biennium. Lawmakers got back to work on a bill.

Lawmakers worked around the clock the last remaining days of session to wrap-up outstanding bills and try to find an agreeable solution to balance the budget. The House and Senate passed another budget bill to solve the state’s shortfall but lawmakers did not have a firm agreement with Gov. Pawlenty. The bill was passed in the remaining hours and would resolve the deficit mostly through spending cuts. Negotiations over the bill fell apart however, over a provision dealing with health care funding.

The 2010 regular legislative session came to an end at approximately five minutes to midnight Sunday, May 16 when the House and then Senate adjourned sine die. House Majority Leader Tony Sertich, DFL-Chisholm, said the Legislature had an agreement with the governor, and at 12:01, Monday, May 17, the governor would call lawmakers back for a special session. Members reconvened for a special session at 12:01 a.m., May 17, and the agreed-upon budget balancing bill became HF 1 / SF 1.

The $50 million unallotment for the Minnesota State Colleges and Universities system was included in the bill. The cut was divided between the Office of the Chancellor and the campuses with a cut of $2.079 to the Office of the Chancellor and $47.9 million to the campuses. There is also rider language that states none of the reductions made in the Office of the Chancellor may be charged back or allocated to the campuses.

Members passed HF 1/SF 1 and the Senate adjourned the special session at 10:45 a.m. Monday, May 17 and the House adjourned shortly thereafter. The complete bill can be found here.

Bonding Bill

Early in the session, lawmakers passed a $1 billion bonding bill, which included $305.9 million in projects and repair and replacement for the Minnesota State Colleges and Universities system. Gov. Pawlenty indicated he would veto the bill due to the large size, so legislators held back the bonding bill in order to try and reach a compromise. The capital investment conference committee went back to work to revise the bill. Members brought the total down slightly from $999.9 million to $986.4 million, and included the core projects identified by the governor. The bill was revised once again to include an $11.5 million increase for the sex offender treatment facility in Moose Lake that the governor wanted, and was sent to the governor at $999.6 million. The new bill included $239 million (including user financing) in projects and repair and replacement for the system, which was a reduction of $66 million.

Gov. Tim Pawlenty line-item vetoed the bonding bill down to $680 million. In his veto letter to legislative leadership, the governor told lawmakers that “like any family or business, state government needs to live within its means and follow a budget,” and that he had said earlier he would not sign a bill as large as what was presented to him. The final bill the governor signed however; was smaller than his initial bonding recommendation. The governor cut 16 projects from the system, which totaled more than $130 million in line-item vetoes. Those vetoes include:

• Anoka Ramsey Community College fine arts building renovation - $5,357,000
• Anoka Ramsey Community College bioscience and allied health addition - $400,000
(original request was $16,484,000)
• Hennepin Technical College learning resource center - $10,566,000
• Minneapolis Community and Technical College workforce program renovation - $12,990,000
• Ridgewater College lab construction and renovation - $14,300,000
• South Central College, Faribault classroom renovation and addition - $13,360,000
• North Hennepin Community College bioscience and health careers center addition - $600,000
(original request was $26,581)
• Minnesota State University Moorhead Livingston Lord library and information technology renovation - $14,901
• Southwest Minnesota State University science lab renovation - $200,000
(original request was $5,666,000)
• St. Cloud State University integrated science and engineering laboratory facility - $42,334,000
• Dakota County Technical College transportation and emerging technologies lab renovation - $300,000
(original request was $7,230,000)
• Rochester Community and Technical College workforce center co-location - $3,238,000
• System wide initiative (nine campuses) for renovation of STEM classrooms - $4,835,000
• Minnesota State University, Mankato clinical science building design - $1,908,000
• Minnesota West Community and Technical College, Canby wind turbine training facility - $200,000
• Mesabi Range Community and Technical College engineering program - $3,000,000

Also included in the bill was an appropriation for $200,000 for a matching grant to Pine Technical college to design, construct, furnish and equip an entrepreneurship and technology business incubator. Lawmakers included $12 million to the City of Mankato to expand the Civic Center, including a performing arts theater and the Southern Minnesota Women’s Hockey Exposition Center for joint use by the city and Minnesota State University, Mankato; however, the governor vetoed this project.

The final bill includes lease revenue language for St. Cloud Technical College. The Minnesota State Colleges and Universities are to pay Minnesota Management and Budget one-third of the lease revenue received from the Allied Health Building property acquired for St. Cloud Technical College. The bill also includes language that allows a campus to use any unspent portion of an appropriation for a project that is completed for HEAPR purposes at the campus.

Budget Bill

The February economic forecast indicated that the state would be facing a $994 million state budget deficit for fiscal year 2011. The Legislature approached the almost $1 billion budget deficit in three phases. The first phase resolved approximately one-third of the state’s budget deficit through a supplemental budget bill that made $313 million in reductions, including a cut to the Minnesota State Colleges and Universities system.

Included in the higher education article of the bill is $10.467 million in reductions to the system in fiscal year 2011. Of the cut to the system, $500,000 is to be reduced from the central system office, along with an additional $500,000 internal obligation. The bill includes language that says the Board of Trustees must make a good-faith effort to make the reductions at campuses and the central office in a manner that minimizes reductions related to providing direct services to students and maximizes reductions for administrative services not providing direct services to students. The bill also increases the revenue fund authority in statute from $200 million to $300 million for college and university revenue fund projects.

In the area of financial aid, lawmakers had to fill a $42 million state grant shortfall. In committee testimony, Rep. Lyndon Carlson, DFL-Crystal, explained the circumstances behind the shortfall. Carlson said many more students are enrolling in higher education institutions and a larger number of these students have a greater financial need. The Office of Higher Education moved dollars from the second year of the biennium to the first year to cover the cost of this greater need, which has resulted in the shortfall in the second year, fiscal year 2011. Carlson also said that it is difficult to predict how much funds will be needed in the state grant program from year to year, but under law, the Office of Higher Education has to prorate students' awards if there is a shortfall. Due to the shortfall, an average loss students will see in their state grant awards is $300, but some students could see up to a reduction of $1,000 in their state grant. 7,000 students will lose their state grant award altogether and over 5,000 of those students are from lower cost two-year community and technical colleges.

The state grant shortfall was a topic of much debate among legislators. Rep. Tom Rukavina, DFL-Virginia, chairman of the House higher education committee expressed his regret at having to cut the state grant program and indicated he had hoped more could have been done for the students and higher education.

The bill reduces state work study $1.768 million in fiscal year 2011, and also reduces the summer transition grant funding by $1 million in fiscal year 2011. The bill reduces from nine to eight, the number of semesters that a student can attend while maintaining eligibility for the state grant program. A provision in the bill increases the assigned student responsibility and the assigned family responsibility. Both of these actions will help to resolve the shortfall. The bill also modifies the Achieve scholarship program and reduces the technical and community college emergency grants and makes clear that the emergency grant appropriation in fiscal year 2009 was a one-time appropriation. The bill also increases the borrowing limit for the SELF Loan program. The complete bill can be found here.


Higher Education Policy Bill


In addition to the budget bill, lawmakers passed a higher education policy bill. As of the time of this writing, the governor has not yet signed the bill. Included in the bill is:

• Language that increases the age of a senior citizen in statute from 62 to 66 to receive a tuition discount.

• Requirement of colleges and universities to make a reasonable attempt to identify and purchase locally grown food.

• The system, Minnesota Chamber of Commerce and representatives of industry groups and labor unions are to study program requirements for certificates and diplomas awarded by the system to determine the feasibility of designing technical education programs to allow students to have more opportunities to earn credentials with lower credit requirements that could be combined into higher level certificates or diplomas.

• Office of the Chancellor is required to streamline services provided through the office to reduce expenditures, better target the use of state resources and provide services at the most appropriate and efficient level so as not to duplicate any services provided at the institution level.

• Post-retirement health insurance premium reimbursement language.

• Board of Trustees is required to establish a pilot project to develop partnerships and training and employment opportunities for surgical technologists at institutions that offer a surgical technologist program.

• Minnesota State Colleges and Universities system and the University of Minnesota are required to study nanotechnology research and education and report to the Legislature on ways nanotechnology is used responsibly and safely.

• Pilot project language that would establish up to eight institutions in the Minnesota State Colleges and Universities system to invest some campus reserves in a local bank.

• The Office of Higher Education is required to monitor the implementation of the Higher Education Opportunity Act as it relates to disclosure of textbook pricing and other information to students.

• Credit transfer language that requires the Board of Trustees to develop and implement a plan to improve credit transfers within the system. The Board may convene working groups of affected faculty, staff, students and administrators in the system to work on issues and barriers to credit transfer. The language also states the Board must provide systemwide transfer information on campus Web sites necessary to determine the transferability of course credits, and the information must be easily accessible and kept current. The complete bill can be found here.



Contract Ratification Bill


Legislators passed the contract ratification bill the last couple weeks of session and the governor signed the bill May 13, 2010. An amendment was included in the bill that requires the Minnesota State Colleges and Universities system to submit a summary of the proposed agreements, awards or plans to Minnesota Management and Budget at a time and in a manner specified by the commissioner, so the commissioner can post information relating to these appointing authorities on the Web site. The bill includes the contracts and plans for Minnesota State College Faculty or MSCF; the Minnesota State University Association of Administrative and Service Faculty or MSUAASF; the American Federation of State, County and Municipal Employees or ASCFME, the Minnesota Association of Professional Employees or MAPE; the Middle Management Association or MMA; the Minnesota State Colleges and Universities Administrators; the Commissioner’s Plan; and the Managerial Plan.

State Employee Retirement Incentive Bill

The Legislature passed an early retirement incentive bill, Chapter 337, this session that was introduced in the 2009 session, however failed to make it to the governor’s desk last year. Lawmakers took up the bill again this session, passed it, and the governor signed the legislation into law May 13, 2010. The bill provides for employer discretion regarding who will be offered the incentive while taking into consideration equity, budgetary constraints and workforce planning concerns. Executive, legislative and judicial branch employees are eligible for the incentive, including Minnesota State Colleges and Universities employees. The employee has to have at least 15 years of service and is eligible for retirement. The incentive is an amount equal to the value of up to 24 months of employer paid medical and dental insurance programs to be paid into the employee’s pre-tax Health Care Savings Plan.

Omnibus Pension Bill

The omnibus pension bill worked its way through the Legislative Commission on Pensions and Retirement and the appropriate legislative committees, the differences between the House and Senate bills were worked out in conference committee, and the final bill passed both bodies prior to being sent to the governor. The last few days of session the governor’s spokesman, Brian McClung indicated the governor would veto the bill. The bill's Senate author, Don Betzold, DFL-Fridley, noted that the bill was the product of a year's worth of negotiations, and said the veto threat came as a surprise to him. Gov. Pawlenty did end up signing the bill in the final hour. The bill includes a provision that authorizes the Minnesota State Colleges and Universities system to contract out for investment selection and review services for the Individual Retirement Account Plan with providers other than just the State Board of Investment.

Omnibus Agriculture and Veterans Affairs Bill

The omnibus agriculture and veterans affairs bill includes a provision that extends the sunset on the veteran centers on higher education campuses from June 30, 2011 to June 30, 2012. Included in the bill is language that requires the commissioner of veterans affairs to report to the Legislature regarding alternative funding sources for the higher education veterans assistance program. Also included in the bill is language that requires the commissioner of agriculture to convene one or more meetings with milk producers, other industry stakeholders, and representatives of the University of Minnesota and the Minnesota State Colleges and Universities system whose work relates to the dairy industry, to consider the elements of a dairy research and education facility which would represent a partnership between higher education institutions and the dairy industry.

Omnibus Economic Development Bill

The employment and economic development policy bill was signed by the governor with the exception of two line-item vetoes; $2 million for a grant to the Mountain Iron Economic Development Authority for renewable energy projects, and an appropriation of 2.706 cents per ton to the Virginia Regional Medical Center for operating room equipment and renovations. Included in the bill that relates to the Minnesota State Colleges and Universities system includes language regarding the Minnesota Science and Technology Authority. Included in the duties of the Authority is working with the University of Minnesota, Minnesota State Colleges and Universities and the Mayo Clinic in promoting collaborative efforts to respond to federal funding opportunities. A Science and Technology Initiative Advisory Commission of 18 members is established in law and includes two representatives from the system, including a faculty member actively involved in science and technology research.

The bill also adds an additional duty of the Board of Trustees in statute. The Board must identify colleges offering flexible academic programs that accommodate the needs of laid-off workers and assist its other institutions in determining whether to offer similar programs. Language reads that colleges must increase the number of certificate programs available to meet the needs of unemployed Minnesotans.

Omnibus K-12 Education Bill

The K-12 education bill traveled a long road this session. The original bill in the House, HF 2431, which made its way through the committee process over the duration of the session, was tabled late in the session in the House Ways and Means committee, so it was replaced with HF 3833, another omnibus bill. That bill was fast-tracked and passed the House during the last week of session. The Senate did not have one omnibus K-12 education finance and policy bill, instead the Senate split proposals into smaller bills.

In the final hours of session, the House took up HF 2072, a third version of an omnibus K-12 education bill, sent it to conference committee, and then passed the final bill on the floor. However, the Senate rejected the bill. The House voted to give school boards the power to renew expiring property tax hikes without voter approval, but the Senate voted the bill down to send back to conference committee. Opponents said the proposal would deny voters the ability to renew a property tax increase previously approved by referendum. The bill also did not include the controversial provision regarding alternative teacher licensure or address job evaluation for existing teachers. Throughout session, the bill contained some contentious issues as lawmakers and the governor tried to put together a second-round application for federal Race to the Top funds. The governor, legislators and teacher unions could not agree on some of the key reforms that are part of the grant application criteria, including alternative teacher licensure.
During the special session Monday morning, legislators tried one more time to pass a bill, and took up the K-12 education bill in the form of SF 2 / HF 2. Members on the Senate floor said they were able to work out an agreement with the governor, and the Senate passed the bill. However, the House was unable to get enough votes needed (90) to suspend the rules and take up the bill. So the omnibus K-12 education bill once again did not pass.

Wrap-up

The bills summarized in this report do not include all bills passed during the 2010 session that relate to the Minnesota State Colleges and Universities system. Please watch for Mandates and Curiosities, the annual publication that highlights and summarizes new laws relating to higher education in Minnesota, to be posted to the government relations Web site in the coming weeks.

The 2011 legislative session is scheduled to begin January 4, 2011. When lawmakers return to St. Paul for the 2011 legislative session, the make-up of the Legislature will look different. 21 legislators have announced their retirement, including Representatives Dan Severson, R-Sauk Rapids, Larry Haws, DFL-St. Cloud, Rob Eastlund, R-Cambridge, Tom Emmer, R-Delano, Marty Seifert, R-Marshall, Laura Brod, R-New Prague, Jeremy Kalin, DFL-North Branch, Doug Magnus, R-Slayton, Randy Demmer, R-Hayfield, Paul Kohls, R-Victoria, Karla Bigham, DFL-Cottage Grove, Margaret Anderson Kelliher, DFL-Minneapolis, and Cy Thao, DFL-St. Paul.

Retiring senators include Senators Tarryl Clark, DFL-St. Cloud, Steve Dille, R-Dassel, Dennis Frederickson, R-New Ulm, Debbie Johnson, R-Ham Lake, Mee Moua, DFL-St. Paul, Jim Vickerman, DFL-Tracy, Steve Murphy, DFL-Red Wing, and Pat Pariseau, R-Farmington.

The primary election this year has been moved up to August 10, 2010 and Election Day is November 2, 2010. Offices up for election this year are state senators and state representatives, state executive officers including the governor, and U.S. representatives. You may tune in to election activity and campus events on the government relations Web site here.

Be sure to keep up on legislative news, both state and federal, at the Minnesota State Colleges and Universities blog, Facebook page and Twitter page. They can be located at:

Government Relations Blog

Government Relations Facebook

Government Relations Twitter

Friday, May 14, 2010

Countdown to session end; Federal updates on STEM, stimulus funds and credit cards

Legislative Update
May 14, 2010

Countdown to the end of session


With just a little over two days remaining until adjournment, legislative leaders and Gov. Pawlenty continue to negotiate a session-ending deal to balance the budget. According to the constitution, lawmakers must adjourn Monday, May 17, but note the Legislature is not allowed to pass bills the last day of session. So for all practical purposes, the Legislature will adjourn Sunday at midnight.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said today that the Senate has completed its work and is waiting to put the final touches on the budget balancing approach that will be acceptable to the governor. Pogemiller said if something comes out of conference committee that is good for the state, the Senate will pass it, but there is nothing left that needs to be passed other than a budget bill. Others are arguing there is still a K-12 education bill that should be passed.

The K-12 education bill has traveled a long road this session. The original bill, HF 2431, which made its way through the committee process this session, was tabled late last week in the House Ways and Means committee, so it has been replaced with HF 3833, the most recent omnibus K-12 education bill. That bill was fast-tracked and passed the House earlier this week by a vote of 86-47. The Senate does not have an omnibus K-12 education finance and policy bill, instead the Senate has split proposals into smaller bills. Lacking a Senate companion, the fate of the House K-12 education bill is unknown.

The higher education policy bill moved this week. After conferees met for the first and only time and passed the conference committee report Wednesday, the Senate passed the bill by a vote of 62-2, and the House passed it 113-17. The bill, SF 184, now heads to the governor. You may find the complete bill here.

A final summary of the 2010 Minnesota legislative session will be sent out Monday, May 17 after the Legislature adjourns sine die.

Please find the latest federal news below.

Science funding legislation stalls

The U.S. House was expected to vote on the America COMPETES law Thursday but the legislation was sent back to committee. This legislation would have doubled the budget of the National Science Foundation, continued funding for science and research programs for five years, and emphasized training in science, technology, engineering and math. The America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education and Science (COMPETES) Act was originally enacted in 2007. It was sent back to committee after Republicans raised concern about the bill creating too many programs and spending too much money.

No stimulus funding for teachers?

Colleges and universities may not receive extra stimulus funding this year to prolong teaching contracts. The Senate Appropriations Committee approved a $58.8 billion supplemental appropriations bill Thursday that did not include the teacher funding provision. Senator Todd Harkin, D-Iowa, originally proposed the education legislation calling for $23.3 billion to be used to "starve off the coming wave of teacher layoffs," he wrote in a press release. Education Secretary Arne Duncan sent a letter to leadership including Senate Majority Leader Harry Reid, D-Nevada, and Speaker of the House Nancy Pelosi, D-California, asking them to reconsider and support this legislation.

Credit card swipe fees reduced under amendment

College bookstores received a victory this week in Congress. The U.S. Senate voted 64-33 Thursday to pass an amendment which would require that fees associated with paying for books on a credit card be "reasonable and proportional" to the cost of the transaction, which could lower the fees colleges pay when students use credit and debit cards to pay for tuition or books. The fees average 1 to 2 percent of the purchase. This amendment is likely to benefit students as costs are sometimes passed onto the consumer. The amendment was tacked onto S.3217, the Restoring American Financial Stability Act of 2010.

Friday, May 7, 2010

Budget negotiations continue; Trustees confirmed; Policy conferees appointed; Nursing supported; Lots of bill passage; Federal Pell grant legislation

Legislative Update
May 7, 2010


Minnesota Supreme Court overturned governor’s unallotment

The big news this week that is changing the legislative landscape for the remaining 10 days of the session is the Minnesota Supreme Court ruling concerning Gov. Tim Pawlenty's unallotment last year. The court ruled 4-3 that the governor overstepped his executive authority by unilaterally cutting $2.7 billion from the state budget through the unallotment process. In a majority opinion written by Supreme Court Chief Justice Eric Magnuson, the court said the governor used the unallotment in an unintended way by cutting a state nutrition program before the Legislature had adjourned with a balanced budget. Magnuson said the Legislature has the primary responsibility for establishing the state's spending priorities through the enactment of appropriation laws. You can find the complete Supreme Court ruling here.

It appears that the implications of the ruling are much broader than the relatively small provision pertaining to the nutrition program that was the plaintiff in this case, and lawmakers now have to deal with a budget deficit that goes beyond the current $536 million shortfall. With the $2.7 billion unallotment overturned, the shortfall is likely to grow substantially to more than $3 billion. The governor's cut of $2.7 billion included $50 million to the Minnesota State Colleges and Universities system. Chair of the Senate higher education committee Sen. Sandy Pappas, DFL-St. Paul, said in the MinnPost online newspaper that the University of Minnesota and the Minnesota State Colleges and Universities system should not expect restoration of $50 million each from the governor’s unallotments. “Frankly I think that’s pretty unlikely,” she said. “We still have holes in our budget to fill, and so to go back and spend money on something that’s already cut is going to be unlikely, not this year, with this governor.” Pappas also said that because of the federal maintenance-of-effort requirements there are very limited areas in the higher education budget that can be cut. “We’ve cut the maximum we can cut from MnSCU and the University of Minnesota,” Pappas said.

Legislative leaders have been meeting with the governor to discuss how to handle this new deficit. In a press conference late this week, the governor's Deputy Chief of Staff Brian McClung said the governor is looking at the deficit in three parts and looking for ways everyone can agree. The three parts include $1.8 billion in shifts in K-12 school aid payments and property tax recognition, $700 million in unallotment cuts and the remaining $536 million deficit. McClung said he is hopeful lawmakers will at least ratify the $1.8 billion shift; however, while the shift has majority support in the House, there is not widespread support in the Senate. Sen. Larry Pogemiller, DFL-Minneapolis, said in a media availability today that while the Senate does not support the shift, he does acknowledge that it might be necessary to “kick the can down the road,” to resolve part of the deficit. Pogemiller said the Senate DFL caucus would rather make the hard structural decisions. Gov. Pawlenty has asked lawmakers to ratify the $2.7 billion in unallotments. As of the time of this writing, members of the House are debating an amendment on the floor that would enact the unallotments. Pogemiller and House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said lawmakers will also consider a new round of spending cuts.

Lawmakers will have their work cut out for them this next week as they work to balance the budget before heading home May 17. Pogemiller said today he does not want to work up until the last minute of session resolving the deficit. He said they learned from last session when they attempted to pass a major piece of legislation at the final hour.

Board of Trustee members confirmed by Senate

The full Senate has confirmed Minnesota State Colleges and Universities Board of Trustees members David Paskach and Christopher Frederick. Trustee Paskach was confirmed by the Senate Higher Education Budget and Policy Division in January 2009 and the full Senate just took action on his confirmation Thursday. Trustee Frederick was confirmed by the committee earlier this session and also received confirmation Thursday by the full Senate.

Higher education policy bill passes House, conferees appointed

The full House passed the higher education policy bill earlier this week by a vote of 98-31. Discussion on the floor was mainly surrounding an amendment offered by Rep. Phyllis Kahn, DFL-Minneapolis, that would allow alcohol to be served in premier seating at the University of Minnesota sports arenas. The amendment did not pass; however, the Senate included this provision in their version of the higher education policy bill.

Also on the House floor, Rep. Sarah Anderson, R-Plymouth, offered an amendment regarding the pilot project language in the bill that would establish up to eight institutions in the Minnesota State Colleges and Universities system to invest some campus reserves in a local bank. Rep. Anderson said the amendment would ensure the interest rate paid on deposits in local banks would be at least equal to the rate paid on campus reserves deposited in the state treasury. The amendment did not pass by a vote of 45-83.

After the House passed the bill, Sen. Sandy Pappas, DFL-St. Paul, moved to not concur with the House higher education policy bill and requested that a conference committee be appointed to work through the differences in the two bills. Senate appointees include Sen. Pappas; Sen. Ron Latz, DFL-St. Louis Park; and Sen. Claire Robling, R-Jordan. The House appointed three conferees as well. They are Rep. Tom Rukavina, DFL-Viriginia; Rep. Roger Reinert, DFL-Duluth; and Rep. Carol McFarlane, R-White Bear Lake. As of the time of this writing, the conference committee has not publicly met. You may review the side-by-side comparison of the two bills here.

The House bill includes language that increases the age of a senior citizen in statute from 62 to 66 to receive a tuition discount, caps the for-profit institutions in the state grant program, caps the one-time grant for a high school-to-college developmental transition program at $1 million; and establishes the Minnesota State Colleges and Universities central system office and provides for general duties of the office.

The supplemental budget bill signed by the governor earlier this session raised the revenue fund authority in statute from $200 million to $300 million. The House bill brings that authority increase down to $275 million. There is language in the House bill that requires the system along with the Minnesota Chamber of Commerce and representatives of industry groups and labor unions to study program requirements for certificates and diplomas awarded by the system to determine the feasibility of designing technical education programs to allow students to have more opportunities to earn credentials with lower credit requirements that could be combined into higher level certificates or diplomas.

Another provision in the House bill requires the system office to streamline services provided through the office to reduce expenditures, better target the use of state resources and provide services at the most appropriate and efficient level so as not to duplicate any services provided at the institution level.

The House bill does include language on credit transfer, which is somewhat different than what the recent conference committee adopted and the governor vetoed late last week. The language requires the Board of Trustees to develop and implement a plan to improve credit transfers within the system. The House bill also includes language on post-retirement health insurance premium reimbursements and language that states the system office cannot pass through any reductions to campuses that were made to the system office.

Also included in the House bill is language that states the Minnesota State Colleges and Universities system and the University of Minnesota shall study nanotechnology research and education and report to the Legislature on ways nanotechnology is used responsibly and safely. And finally, language in the House bill requires the Board of Trustees to establish a pilot project to develop partnerships and training and employment opportunities for surgical technologists at institutions that offer a surgical technologist program.

The Senate bill includes a provision that requires colleges and universities to make a reasonable attempt to identify and purchase locally grown food, and includes language that requires the Office of Higher Education to monitor the implementation of the Higher Education Opportunity Act as it relates to disclosure of textbook pricing and other information to students.

Nursing programs receive coordinated support

In the Senate this week, the committees on Health, Housing and Family Security and Commerce and Consumer Protection met jointly and among other issues, took up SF 3397, which encourages the Minnesota State Colleges and Universities system to apply for federal grants available to further the development and expansion of the clinical coordination project. This bill was before the committee for discussion.

Elizabeth Biel with the Healthcare Education Industry Partnership located at Minnesota State University, Mankato testified to the success of the original pilot project and current program. The goal of the clinical coordination project is to coordinate work sites for nursing students to get the clinical experience they need to complete to graduate and to increase efficiency and utilization within the state's clinical experience environment. Biel said that without the necessary space for clinicals, nursing programs across the state will be unable to educate more nursing students. Minnesota's health care education programs report that securing these experiences is among the top three barriers to maintain and expand graduation rates. Sen. Kathy Sheran, DFL-Mankato, a former nursing professor at Minnesota State University, Mankato, said that competing for clinical space is a real problem. Sheran said a lot of time and frustration goes into negotiating and scheduling clinical lab space with hospitals and clinics.

Biel said there are 38 nursing programs in the state, and the program is designed to tear down the silos and work together. The program has the potential to decrease nursing and allied health education program waiting lists that currently exist and increase the numbers of Minnesota’s qualified health care workers. Author of the bill, Sen. Sharon Erickson Ropes, DFL-Winona, said the program can be used as a model across the health care spectrum, and that this program is a good example that will help Minnesota qualify for federal grants available through the Health Care and Education Reconciliation Act of 2010.

Lawmakers act on legislation with one week left to adjournment

With just a little over one week left before the Legislature must adjourn Mon., May 17, both the House and Senate are busy processing bills. On the House floor this week, members debated the health and human services bill for more than nine hours and passed it by a vote of 79-54. The Senate passed the bill 42-19, and it is now in conference committee to work through the differences. However, Gov. Pawlenty has said he will veto the bill because of costs in future years. While the House bill makes cuts of $164 million in the current biennium, it does designate an additional $38 million in fiscal year 2011 and $53 million in the 2012-2013 biennium for Minnesota’s participation in an early federal health care reform initiative, an expansion of the state’s Medicaid program. Sen. Linda Berglin, DFL-Minneapolis, author of the Senate bill, has urged the governor to back away from his threatened veto of the bill. The Senate bill makes cuts of $114 million.

Also this week, the Senate passed the omnibus retirement bill on the floor by a vote of 44-19, and the House is scheduled to take up the bill on the floor today. The bill includes a provision that authorizes the Minnesota State Colleges and Universities system to contract out for investment selection and review services for the Individual Retirement Account Plan with providers other than the State Board of Investment. The bill also extends the early retirement incentive program that expired on July 15, 2009, to October 1, 2012, and resets the incentive payment amount from $17,000 to the total of the maximum state regular unemployment compensation and employer-paid medical, dental and life insurance premiums payable to the incentive recipient in the event of a layoff.

On the House floor this week, members passed the contract ratification bill 118-5 after an amendment was adopted that requires a summary of the proposed contract agreement, award or plan to be posted on a state Web site prior to being submitted to the Legislative Coordinating Commission for review. The Senate had passed the bill earlier without this amendment, so the Senate will have to take up the revised bill. As a reminder, the bill ratifies the contracts and plans for Minnesota State College Faculty or MSCF; the Minnesota State University Association of Administrative and Service Faculty or MSUAASF; the American Federation of State, County and Municipal Employees or ASCFME, the Minnesota Association of Professional Employees or MAPE; the Middle Management Association or MMA; the Minnesota State Colleges and Universities Administrators; the Commissioner’s Plan; and the Managerial Plan.

Another bill passed by the Senate this week by a vote of 62-0 is SF 3079. It modifies the Post-Secondary Enrollment Options program. The bill eliminates the language from statute that says a post-secondary institution may not advertise or otherwise recruit or solicit secondary students to enroll in post-secondary programs on financial grounds. The bill also allows a post-secondary institution to bill students for any textbooks and equipment that are not returned by the student. The House companion is awaiting a hearing in House Finance. The House omnibus K-12 education bill also includes the textbook provision.

Bills will continue to make their way out of committee and onto the floor the remaining days of session, and lawmakers will continue to pass bills off the floor and send them to the governor for signature, all while negotiations continue on how best to balance the state’s budget.

Congressman Paulsen introduces legislation to show support for full funding for Pell Grants

Earlier this week, Congressman Erik Paulsen, D-Minn., introduced legislation in the U.S. House of Representatives that calls for full funding of Pell grants, federal grant aid for post-secondary education. The bill, H.R.5198, expresses the sense of Congress that the federal Pell grant program plays a unique role in promoting economic and social mobility in the United States, financial aid has a significant positive impact on the post-secondary enrollment and success rates of students from low income families, and should be a high funding priority. The bill was referred to the Committee on Education and Labor.

“Pell grants are one of the most important tools in helping students afford the growing costs of post-secondary education, especially as the economy continues to lag,” Paulsen said. “As Congress seeks to prioritize the federal budget, meeting the commitments we've made to students who depend on Pell grants will be critically important. I'm hopeful this bipartisan effort will bring greater attention to this need, while also building momentum to fully fund Pell grant awards as we go forward.” You may find the bill here.

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 legislative web site.

Monday, May 10

9:00 AM
House Finance
Room: 200 State Office Building
Chair: Rep. Lyndon Carlson
Agenda:
SF2891 (Mullery) Interstate Compact for Juveniles adopted.
SF3134 (Kahn) State government programs or activities money appropriated or reduced, and provisions changed relating to expenses of governor-elect, income earned by the permanent school fund, lease-purchase agreements, general services, resource recovery, payment of aids and credits to school districts, tax return preparers, and implied consent.
HF2866 (Carlson) Executive branch authority modified to reduce unexpended allotments.
HF2922 (Thissen) Minneapolis Employees Retirement Fund; administrative functions transferred to the Public Employees Retirement Association, consolidation account created within the Public Employees Retirement Association, and money appropriated.

Tuesday, May 11

12:30 PM
Senate Higher Education Budget and Policy Division
Room: 123 Capitol
Chair: Sen. Sandra L. Pappas
Agenda:
University District Alliance report
HEFA confirmations