Friday, May 13, 2011

Budget deal coming?: Conference committee bills move; U.S. Congress reviews job training; Senate considers DREAM Act; Federal budget talk timeline

Legislative Update
May 13, 2011

Conference reports demonstrate momentum with 10 days remaining

Higher education, K-12 education and state government are among the conference reports conferees have negotiated to a single legislative position this week. Gov. Dayton said the conference reports need to only be posted, not sent to the floors for passage by the full Legislature, before he will start negotiating, so we should see the governor start to engage. Senate Deputy Majority Leader Geoff Michel, R-Edina, said legislative leaders want the governor to sign the bills. “We don’t want to send a bill to veto land,” Michel said. He said they’re still optimistic and there’s plenty of time to reach agreement.

Senate Majority Leader Amy Koch, R-Buffalo, said there’s an increase in the level of engagement with the governor and his staff. Koch said once the committee reports are posted, they will work with the governor to achieve a timeline. When asked by the media why leadership has not publicly released their conference committee targets, Koch said they are “working targets,” that are continually moving. She indicated the target position will be posted with the conference committee reports. When asked if leadership is moving away from the $34 billion budget target down to $32 billion with further cuts in some of the bills, Koch wouldn’t comment, but said they will continue to live with what’s in the checkbook. “We ultimately want agreement with the governor,” Koch said.

House Speaker Kurt Zellers, R-Maple Grove, said he is confident the work can be completed because Gov. Dayton and Republican leaders get along well. “This is a game of personal relationships,” Zellers said, and called Dayton a very genuine man. Dayton left this afternoon for the governor’s fishing opener in Grand Rapids with an expected return of Saturday evening. Lawmakers plan to meet in floor session Saturday, and leaders will work through the weekend to get closer to a deal. Dayton is expected to engage in negotiations this weekend when he returns. Given this movement, many wonder if a May 23 adjournment is within reach. Still remaining however, is the philosophical difference that exists between Republican legislators and the governor on raising taxes. Stay tuned.

Higher education conferees finalize bill

Conferees wrapped up the higher education finance bill Thursday night. The cut for the Minnesota State Colleges and Universities system ended up at $130 million, or 10.7 percent, for the 2012-2013 biennium from the fiscal year 2011 base doubled. (If you look at the numbers from the fiscal year 2012-2013 forecasted base, the cut comes out to be $180 million, or 14.3 percent, over the biennium). The total appropriation for the system each year is $540.5 million, down from the fiscal year 2011 budget of $605 million.

The House language that provided for a one percent performance set aside of state appropriation was included in the report and will be made available based on the achievement of three of five goals. Those goals include; (1) increase by at least seven percent, compared to fiscal year 2009, graduates or degrees, diplomas and certificates conferred; (2) increase by at least ten percent, compared to fiscal year 2010, the number of students of color; (3) increase by at least fifteen percent, compared to fiscal year 2010, the full year equivalent enrollment of students taking online or blended courses or the number of online and blended sections; (4) increase by at least one percent the fall 2011 persistence and completion rate for fall 2010 entering students compared to the fall 2010 rate for fall 2009 entering students; and (5) decrease by at least two percent, compared to calendar year 2009, total energy per square foot.

Also related to the budget, the House language was adopted that requires the Board of Trustees to place the highest priority on meeting the needs of employers for a skilled workforce when making reductions, approving programs of study, establishing requirements for completion of programs, and approving course offerings and requirements for credentials. The Board is also required to focus on the efficient delivery of higher education, eliminate duplication throughout the system and streamline the operation of the system to provide an education that prepares students for the workforce needs of Minnesota.

The bill caps tuition for the state universities at five percent in the first year of the biennium and four percent in the second year. For the state colleges, the bill caps tuition at three percent each year of the biennium. Regarding tuition and fees, language was included in the bill that reads; "The Board of Trustees of the Minnesota State Colleges and Universities must limit the rate of increase for any mandatory fee charged to a student at a university or college to four percent per year in the biennium ending June 30, 2013, unless a higher increase is approved by a public majority vote by the recognized campus student association." Mandatory fees are those that are generally charged to all students at a college or university.

Also adopted in the report is the House language regarding the undergraduate tuition guarantee plan that encourages the Board of Trustees to offer entering students a plan providing stable tuition for two-years for students pursuing a two-year degree, or four-years for students pursuing a four-year degree.

The language on credit transfer originally in the House bill was amended and then adopted that reads; “When providing the report required by Laws 2010, chapter 364, section 38, the Board of Trustees of the Minnesota State Colleges and Universities shall provide the information about progress made toward achieving the goals described in the system's Smart Transfer Plan, and shall provide information about the number of students transferring between and among the system's two- and four-year institutions during the previous fiscal year. In addition, the Board of Trustees shall include a system study of mechanisms for effective transfer in other states.”

Conferees put more money into the state grant program to partially fund the state grant projected deficit for 2012-2013. The program will see an additional $21.1 million over the biennium. This equates to a $6 million decrease from the House position and a $14 million increase from the Senate position.

The language relating to senior citizen tuition that was in both the House and Senate bills, was included in the final conference report. The language reverses the law set last session that moved the age from 62 to 66 to receive tuition benefits. This language moves the age back to 62.

And finally, the House repealers were adopted. They include; the requirement for public institutions to sell American-made clothing and apparel in their bookstores to the extent possible; the requirement that public employers purchase or require employees to furnish uniform or protective accessories that are made in America; the matching state grant program that is part of the Minnesota College Savings plan; and the requirement to provide one-time Achieve grants to students who were eligible before Jan. 1, 2009 and have not yet been awarded the grant.

Some of the provisions not adopted in the conference report include the language that says any transformational initiatives in the system can only be funded out of the Office of the Chancellor and shared services appropriation; the cap of $120,000 (governor’s salary) on the chancellor and presidents salaries; the allocation of any system salary savings to be used to mitigate tuition increases or allocated under the Board's allocation model; and the provision that requires the system to do a comprehensive evaluation of the system's structure and report back to the Legislature.

The spreadsheet for the bill is attached to this email for your review. The conference report is available here.

Legislative leaders have indicated they will hang onto the conference reports and not sign them in order to negotiate a global agreement with the governor.

State government conference committee reaches tentative agreement

There was quite a bit of activity in the state government conference committee this week. Earlier in the week, conferees spent time discussing state employees, including the Minnesota State Colleges and Universities system's employees in relation to the provisions in the bill. Russ Stanton with the Inter Faculty Organization, or IFO, testified that the IFO supports the House language that exempts the Minnesota State Colleges and Universities system faculty and administrators from the salary freeze. Stanton said the system has already taken reductions, and the current higher education bill already includes cuts.

Minnesota Management and Budget Commissioner Jim Schowalter said he appreciates the interest in the competitiveness for the employees in the Minnesota State Colleges and Universities system, but would hope the rest of state government would be exempt from a salary freeze as well. Schowlater said he understands the budget situation, but a salary freeze puts the state at a competitive disadvantage and will not get Minnesota where leaders are looking to go as a state. “We need to develop a trained and skillful workforce,” Schowalter said, and asked conferees to look at the policy from a workforce point of view as well. He said the language doesn't provide for any flexibility.

In regards to exempting the Minnesota State Colleges and Universities system from many of the state agency cuts or salary freeze, Rep. Mike Benson, R-Rochester, told Senate conferees that he sits on the higher education committee and heard the commitment the system already has on trimming the budget. He said the system has done a good job of managing costs and has already demonstrated the ability to look at the efficiencies needed to bring costs down. Co-Chair Morrie Lanning, R-Moorhead, said the Legislature should treat the system the same way they treat the University of Minnesota. Rep. Keith Downey, R-Edina, echoed Benson's comments, and added that the Office of the Chancellor has already undergone a lot of scrutiny in regards to the system's back office functions. Downey said the Office of the Legislative Auditor recommended a couple "tweaks" last year, but overall the system functions well.

As the end of the week drew near, conferees began taking action not only on identical and similar language between the House and Senate bills, and some of the more controversial policy provisions, but began to talk money. Conferees reached a tentative agreement Thursday night to set the overall cut to state government operations at 34 percent, which more closely resembles the House bill. Lanning said conferees will not sign the report right away, but instead will discuss it with Gov. Dayton and his administration. Another conference committee is scheduled for Monday evening. Once the report is available, it will be posted here.

Congressional review of job training programs in higher education subcommittee

The U.S. House Subcommittee on Higher Education held a hearing earlier this week regarding removing inefficiencies in the nation’s job training programs. This is a subcommittee of the House Education and the Workforce Committee chaired by Rep. John Kline, R-MN.

The Government Accountability Office, or GAO, identified 47 separate employment and training programs administered across nine federal agencies, which cost an estimated $18 billion in fiscal year 2009. The hearing was an attempt to look at consolidation and improved coordination among workforce development programs. Subcommittee Chairwoman Virginia Foxx, R-NC, asked for ideas of red tape that can be eliminated. She said the administrative dollars in this type of work can be spent better, and believes the states provide an opportunity to innovate.

Andrew Sherrill, Director for Education, Workforce and Income Security in the GAO office, discussed the benefits of co-location services, which allows a better delivery of services for clients. Sherrill researched states that consolidate services and agencies, and some states said they were able to save money from greater administrative efficiencies; however, they were unable to quantify it.

Larry Temple, Executive Director of the Texas Workforce Commission, provided an example of what’s been done in Texas. Temple said in 1995, the Legislature created the Texas Workforce Commission combining 20 plus services into one new commission. Temple said when leaders were asked to create the commission, there was no example or blue plan to follow so it was created without much knowledge on what should be done. He said the workforce commission has been able to save a lot of money by consolidating the services, especially in rural areas.

Evelyn Ganzglass, Director of Workforce Development with the Center for Law and Social Policy, said her organization does not believe in a one-size fits all approach. She said physical co-locations of services are not always the best fit. Ganzglass said the Center for Law and Social Policy believes Congress should align programs and encourage organizations to work together, provide multiple pathways to postsecondary education, and streamline paperwork with eligibility requirements.

Rep. Ruben Hinojosa, D-Texas, asked Dr. Sherrill if he found any duplication of services between the 47 employment and training programs. Sherrill responded that GAO found some overlap, but did not find any duplication. For example, Sherrill said they found TANF recipients who received training, also received training employment services. Chairwoman Foxx said she understands the local level is working on programs to help local people, but bureaucrats in Washington are trying to regulate the programs. Foxx said she thinks the nation might be better off by sending the money to the states and letting the states regulate their workforce programs.
An archived webcast of the hearing is available here.

DREAM Act re-introduced in Senate

On Tuesday, President Obama outlined a plan for immigration reform that included the DREAM Act, which was then reintroduced in the U.S. House and Senate on Wednesday. The DREAM Act would provide certain undocumented youth who have been in the United States for at least five years, have good moral character, complete high school or earn their GED, and complete two years of college or military service, the opportunity to apply for permanent legal status. The bill also includes a repeal of the ban on in-state tuition for undocumented students.

In support of the DREAM Act, Sen. Michael Bennet, D-CO, said, “The Administration can and should act now to grant deferred action to exemplary students who meet the rigorous requirements for eligibility under the DREAM Act. Not only will these children be better off for it, our country will be better off as well.” In response, House Judiciary Chairman Lamar Smith, R-TX, argued, “I am sympathetic to the young illegal immigrant children who were brought to the United States illegally by their parents, but the DREAM Act doesn't solve our illegal immigration problem, it exacerbates it. Amnesty will encourage millions more parents to bring their children to the U.S. illegally."

Allocation and timeline announced for fiscal year 2012 budget

This week, the U.S. House Appropriations Committee announced the fiscal year 2012 allocations for each of the 12 appropriations subcommittees and provided a tentative timeline for action on the bills. The 2012 allocation for the Labor, HHS, Education Subcommittee is being proposed at $139.2 billion, which is approximately $18 billion less than the fiscal year 2011 level at $157.4 billion. In comparison, President Obama is recommending an appropriation of $180 billion to Labor, HHS, Education for fiscal year 2012. This reduction in funding raises concern about funding the Pell Grant Program. Committee Chairman, Hal Rogers, R-KY, said he anticipates the committee mark-up and approval of all 12 appropriation bills before the August recess. The mark-up for Labor, HHS, Education is scheduled for July 26 for the Subcommittee and August 2 for the full Appropriations Committee. “I promised when I became Chairman that I would complete our Appropriations work on time and on budget, and I will do everything I can to fulfill that promise,” Rogers said.

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's web site.

Saturday, May 14

10:00 AM
Senate in Session

1:00 PM
House in Session

Monday, May 16

8:00 AM
House Ways and Means
Room: 200 State Office Building
Chair: Rep. Mary Liz Holberg
HF211 (Wardlow) Liability limits modified for tort claims against the state and political subdivisions, conciliation court claims regulated, right of appeal provided on class action orders, statute of limitations on claims modified, prejudgment interest modified, attorney fees regulated, and cause of action for sex trafficking violations provided.
HF637 (Drazkowski) Food, beverage, and lodging establishment statutes exemption modified.
HF705 (Crawford) Counties permitted to perform private audits that meet state auditor requirements, publication and reporting requirements eliminated, surplus law library funds provided, county clerk hiring requirements repealed, seed and feed loan provisions repealed, Ramsey County Community Corrections Department duties provided, and clarifying and technical changes made.
HF1025 (Beard) Energy provisions modified relating to energy rates, energy conservation and savings programs, utility cost recovery and investments, qualifying facilities and non generating utilities, energy-related rate impacts, large energy customers, cold weather notices to energy consumers, hydropower, an innovative energy project, transmission lines, Public Utilities Commission approval for security issuance by utilities, assessments, establishment of Energy Reliability and Intervention Office, the Energy Conservation Information Center and residential weatherization programs, and membership in Melrose Public Utilities Commission.
HF1068 (Beard) Transportation and public safety policies governing provisions provided including data practices, bicycles and bikeways and bridges, transportation construction contracts, motor vehicles, traffic regulations, driver licensing and training, alternative financing for transportation projects, railroads, motor carriers and commercial drivers, and agency reporting, establishing fees and an account, pilot program expanded, seaplane base variance provided, provisions repealed, technical changes made, and money appropriated.
HF1423 (Gottwalt) Adoption assistance reform, child protection, child support, and technical and conforming amendments provided.
HF191 (Downey) Redundant Technology Elimination Act proposed, state agency information technology systems and services consolidated, Office of Enterprise Technology duties transferred, and money appropriated.
HF1261 (Holberg) Metropolitan area transit and paratransit capital expenditure additional financing provided, and certain obligations issued.
SF346 / HF554 the language of HF554 (Johnson) will be offered as a delete-everything amendment to SF346 .

6:00 PM
Conference Committee on S.F. 1047: Omnibus state government bill
Room: 200 State Office Building
Chairs: Sen. Mike Parry and Rep. Morrie Lanning
SENATE: Parry; Gazelka; Thompson; Daley; Vandeveer
HOUSE: Lanning; Downey; Benson; Stensrud; Anderson
Agenda: S.F. 1047-Parry: Omnibus state government, military affairs and veterans affairs appropriations; Minnesota Sunset Act.