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