Budget plans announced; Salary freeze bill introduced; Governor names higher education commissioner; Bonding bill disagreement; Board approves plan

Legislative Update
January 21, 2011

Leadership rolls out phase one of budget balancing plan

Republican legislative leadership introduced an early action budget bill this week that proposes $1 billion in cuts. The House Ways and Means Chair Mary Liz Holberg, R -Lakeville, said this is phase one of the budget adjustment, and leadership plans to pass legislation prior to Feb. 10 in order to see a reduced deficit in the February forecast. When leadership was asked if they’re going to send the budget reduction bill to the governor right away or sit on it since the governor called the bill “piecemeal cuts and partial solutions,” Speaker Kurt Zellers, R-Maple Grove, said they will respect the process but “won’t wait around until April and let everything come to a screeching halt.” Zellers said he wants to be respectful of the governor and his administration since the governor is still appointing his cabinet.

Senate Finance Chair Claire Robling, R-Jordan, said the bill enacts the reductions made in last year's budget-balancing bill. The bill would make more than $840 million in one-time spending cuts permanent, including $584 million in cuts to tax aids and credits, $185 million to higher education, and $72 million to various health and human services programs. Robling said the bill also asks for Minnesota Management and Budget to identify $200 million in savings that could be achieved by capturing unspent funds in agencies’ budgets.

For the Minnesota State Colleges and Universities system, the reduction in the bill to the system's fiscal year 2011 budget is $50 million. This would bring the current annual state funding level of $605.5 million (which is slightly below the fiscal year 2002 funding level) to $582 million. Laura King, vice chancellor and chief financial officer of the system, addressed the $23 million cut to the base each year, telling committee members each cut makes the execution of the system’s mission harder. Fiscal Analyst Doug Berg said the cut is a 7.2 percent reduction to the system base and a 6.9 percent reduction to the University of Minnesota's base. There was much discussion in the House Higher Education committee regarding the cut's impact on campuses, and Rep. Joe Atkins, DFL-Inver Grove Heights, unsuccessfully made a motion to lay the bill on the table until they had a better sense of the impact. The bill passed by a vote of 8-7 and heads next to the Ways and Means committee on Monday morning. The Senate is expected to take up the bill Wednesday in the Finance committee.

House Minority Leader Rep. Paul Thissen, DFL-Minneapolis, said this first budget bill is not the direction lawmakers should take and that piecemeal budgeting is not going to work. Thissen told the media he hopes Republicans will explain next week why they are in such a hurry to pass along a property tax increase and tuition increase to Minnesotans.

Majority Leader Matt Dean, R-Dellwood, said, “This is not a normal year when lawmakers can slowly work their way into session.”

You may view the bill here.

Salary freeze bill gains traction in House
A bill that would freeze state employees’ salaries beginning July 1, 2011, and lasting indefinitely cleared the House State Government Finance committee this week and is on its way to the Ways and Means committee. Prior to the 12-8 party-line vote, members discussed the bill’s merits. At a time when many employees in the private sector have lost jobs or taken pay cuts, author of HF 127, Rep. Denny McNamara, R-Hastings, said it’s fair to hold public employee wages flat. He argued that allowing employees to accept raises at a time when the state is cutting its budget could result in layoffs. “I would prefer to see as many state employees keep their jobs as possible,” McNamara said.

Rep. Ryan Winkler, DFL-Golden Valley, called the idea of freezing pay “a perfectly reasonable position” but argued the issue would be better handled through the state’s normal labor contract negotiations.

Committee Chair Morrie Lanning, R-Moorhead, said that while lawmakers traditionally use a hands-off approach to collective bargaining for state employees, it is appropriate for the Legislature to require a pay freeze in a time of deficits.

The bill affects employees in all three branches of state government but would not prohibit employees who are promoted or transferred to different jobs from accepting increased salaries. Minnesota Management and Budget has estimated a cost savings at $64 million over the next biennium. There is no companion bill in the Senate at this time.

You may view the bill here.

News from the governor’s office
Gov. Mark Dayton continues to build his administration, with the addition of Sheila Wright to head the Office of Higher Education. Wright is dean of the Hamline University School of Education. According to Dayton’s news release, “Dr. Wright has dedicated her career in education to addressing the crucial issues of teacher quality and the achievement gap, working in P-12 and higher education, as well as in state government and non-profit organizations.” Wright also has served as associate dean of academic programs and a faculty member in the School of Education at Saint Xavier University in Chicago, and taught at Carleton College in Northfield and Minnesota State University, Mankato.

Also this week, Gov. Dayton named northern Minnesota developer Mark Phillips as the new commissioner of the Department of Employment and Economic Development. Dayton said the appointment helps him underscore his commitment to new jobs. Phillips, who works for Kraus-Anderson Construction, said he shares Dayton's strategy to engage the business community and make use of all the available tools in state government.

Dayton also announced this week that he will give his State of the State speech in the House chambers at noon on Wednesday, Feb. 9.

Disagreement on bonding bill
House Capital Investment committee members met this week for the first time this session to review the capital budget process. Gay Greiter, budget coordinator with Minnesota Management and Budget, said in her testimony that an off-year bonding bill typically has been for "emergencies" and the governor is not required to submit a capital budget recommendation, but she said he indicated he plans to do so this year.

Gov. Dayton has said he will introduce a $1 billion bonding bill later this month and that half of his proposal will fund the projects vetoed by former Gov. Tim Pawlenty, while the other half could be assigned by legislators. House Chair Larry Howes, R-Walker, said in this week’s Capital Investment meeting that if a project is in a lawmaker’s community or region, it's probably considered an emergency. Senate Capital Investment Chair Sen. David Senjem, R-Rochester, said he has no immediate plans to meet as a committee.

Board of Trustees approves 2011 legislative agenda
At this week’s Minnesota State Colleges and Universities Board of Trustees meeting, the board reviewed and approved the 2011 legislative agenda, which states: The members of the Minnesota State Colleges and Universities Board of Trustees will advocate for:

The board-approved biennial budget request of $1.26 billion, the amount set in current law.

Potential opportunities for capital budget funding to completeprojects that were approved in 2010 but not funded.

State and federal financial aid policies and formulas that have an overall benefit to students attending Minnesota State Colleges and Universities.

Actions that would enhance the system’s ability to meet its strategic plan and action plan goals:

Increase persistence and completion rates of students from groups traditionally underrepresented in higher education.

Increase the percentage of students enrolled in one or more college-level courses in science, technology, engineering and math.

Increase the percentage of credits provided through online and blended courses.

The members of the Minnesota State Colleges and Universities Board of Trustees will oppose:

Actions and policies that would restrict the ability of the Minnesota State Colleges and Universities system to maintain quality, preserve access and serve students.


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.

Monday, January 24
10:15 AM
House Ways and Means
Room: 200 State Office Building
Chair: Rep. Mary Liz Holberg
Agenda: HF130 (Holberg) Fiscal year 2011 appropriations reduced, policies changed, and appropriation reductions made for fiscal years 2012 and 2013; and tax aid, credits and payment reductions made.

11:00 AM
Senate in Session

3:00 PM
Senate Higher Education Policy and Finance
Room: 107 Capitol
Chair: Sen. Michelle Fischbach
Agenda: Overview presentation from Minnesota State Colleges and Universities

3:00 PM
Senate Education
Room: 15 Capitol
Chair: Sen. Gen Olson
Agenda: S.F. 40-Olson, G.: Alternative Teacher Licensure

3:00 PM
House in Session

Tuesday, January 25
8:15 AM
House State Government Finance
Room: 200 State Office Building
Chairs: Rep. Morrie Lanning
Agenda: Minnesota Management and Budget (MMB) Department Overview:
Jim Schowalter, Commissioner
Lori Mo, Assistant Commissioner, Accounting Services
Kristin Dybdal, Assistant Commissioner, State Budget Director
Judy Plante, Assistant Commissioner, State Human Resources
Nathan Moracco, Director State Employee Insurance (SEGIP)
MMB will also give an overview and answer questions on the recently released "Workforce 2010" report.

10:30 AM
Senate Committee on Jobs and Economic Growth
Room: 107 Capitol
Chair: Sen. Geoff Michel
Agenda: S.F. 1-Michel: Discussion of SF 1.

12:30 PM
House Higher Education Policy and Finance
Room: State Office Building Basement Hearing Room
Chair: Rep. Bud Nornes
Agenda: Overview of Private Higher Education in Minnesota:
Minnesota Private College Council
Minnesota Career College Association

1:00 PM
Senate Agriculture and Rural Economies
Room: 107 Capitol
Chair: Sen. Doug Magnus
Agenda:
Summary of the Department of Agriculture Livestock Investment Grant Program
Presentation by Minnesota Farm Bureau
Presentation by Minnesota Farmers Union
Overview of the Agricultural Utilization Research Institute (AURI)
Overview of the NextGen Energy Board

3:00 PM
Senate Education
Room: 15 Capitol
Chair: Sen. Gen Olson
Agenda:
Testimony on mandate relief
S.F. 56-Thompson: School safe schools levy set aside requirement removal; school district and charter school salary freeze imposition; staff development reserved revenue and school district contract deadline and penalty repeal.

Wednesday, January 26
8:15 AM
House State Government Finance
Room: 200 State Office Building
Chair: Rep. Morrie Lanning
Agenda: Panel Discussion on Innovation and Transformation Opportunities in Government: This is a follow up discussion on the recently released Minnesota Commission on Service Innovation Report released in December 2010.

8:30 AM
Senate Finance
Room: 123 Capitol
Chair: Sen. Claire A. Robling
Agenda: S.F. 60-Robling: 2010 legislative-enacted budget reductions extended

10:15 AM
House Government Operations and Elections
Room: 5 State Office Building
Chair: Rep. Joyce Peppin
Agenda: HF173 (Peppin) Sunset Commission created, and sunset and review of state agencies provided.
HF2 (Banaian) State budget priority-based process created, sunset process established for state agencies, and money appropriated

3:00 PM
Senate Higher Education Policy and Finance
Room: 107 Capitol
Chair: Sen. Michelle Fischbach
Agenda: Minnesota State Grant Program Overview from Minnesota Office of Higher Education and follow-up information from Minnesota Office of Higher Education.

3:00 PM
Senate Education
Room: 15 Capitol
Chair: Sen. Gen Olson
Agenda:
S.F. 55-Hann: Charter school authorizer approval deadline modification.
S.F. 69-Olson, G.: Home schools mandates and reporting requirements reduction.

Thursday, January 27
8:30 AM
Joint Senate Meeting: Committee on Finance; Committee on Taxes
Room: 15 Capitol
Chairs: Sen. Claire A. Robling, Sen. Julianne E. Ortman
Agenda:
State Demographics, Presenter - Tom Gillaspy, State Demographer
Tax Expenditure Reports, Presenter - Dr. Paul Wilson, Research Director, MN Dept of Revenue

11:00 AM
Senate in Session

12:30 PM
House Higher Education Policy and Finance
Room: State Office Building Basement Hearing Room
Chair: Rep. Bud Nornes
Agenda: Legislative Reports from the Office of Higher Education:
Achieve Scholarship Program
Intervention for College Attendance Program (ICAP)
Reducing Textbook Costs

1:00 PM
Senate Agriculture and Rural Economies
Room: 107 Capitol
Chair: Sen. Doug Magnus
Agenda:
Summary of the Minnesota Agriculture and Rural Leadership (MARL) program
Presentation from the University of Minnesota

Friday, January 28
2:00 PM
Joint Meeting: Committee on Environment and Natural Resources; Committee on Jobs and Economic Growth
Room: Hibbing Community College
Chairs: Sen. Bill Ingebrigtsen, Sen. Geoff Michel
Agenda: Discussion on environmental permitting/jobs and economic growth