March 22 - 2019

"Second Deadline" is only a week away, which means that it's crunch time for policy committees to get to work. After that, policy committees will largely go dormant and the focus will shift to the finance divisions, which will be assembling their respective budget bills. 

This week we saw the beginning of debates about key budget issues that separate the sides. Governor Walz made a big push for more transportation funding needs and the debate about sun-setting the provider tax began. Both will be topics in the final package of session.  Walz also released his revised budget, to reflect the new forecast numbers and many other bills proceeded to move through the process.    
Walz Updates Budget Request
The Governor had to update his budget proposal this week as a result of the new forecast numbers that came out in February, which reduced the projected surplus by $500 million. 

The Governor kept IN, his proposed gas tax increase that he's been promoting on a  tour around the state. Higher Ed got an additional $25 million in the new proposal and the K12 budget increases from his initial budget remained intact. 

To cover the gap, the Governor proposes: capturing $142 million that was unspent from the reinsurance account; reducing spending by $131 million in other agency spending initiatives; capturing $65 million from new changes on business taxes; and lastly, reducing the amount set aside in the surplus, from $789 million to $562 million.

The GOP leadership is not likely to be receptive to these changes, especially since the Governor kept his gas tax proposal and has now added additional business taxes.
Provider Tax Debate
The debate about how to handle the provider tax heated up this week. This 2% tax on health care practitioners was implemented over 25 years ago and has been used as a key funding source to pay for health care insurance for those on MinnesotaCare, a program for working Minnesotans. In 2011 - during the shut down - there was agreement to sunset the tax in 2020 but doing so would have significant financial costs. DFL and GOP legislators are still very far apart on exactly how to replace those funds, so this will likely be a major issue at the end of session.

House Looks to Change Standard for Sexual Harassment
The Minnesota House passed a bill on a bipartisan vote of 113-10, that would change the standard for sexual harassment claims in the state, removing the phrase "severe or pervasive" from the language. The bill was debated last session and was raised as a key issue during the campaigns last fall, piggybacking on the #metoo movement. The Senate has not yet taken action on the bill.
Meeting our MN Commissioners
The people appointed by the Governor to lead our state agencies can have a significant impact on the policies that are created and enforced in Minnesota. Sometimes these people fly under the radar. Whenever there is an opportunity, I will link to stories or interviews that give a glimpse into who some of these people are.

This week, we feature a story featuring Minnesota's Department of Transportation (MnDOT) Commissioner, Margaret Anderson Kelliher.

Special Election - Results
Earlier this week, Nathan Nelson (GOP) defeated Tim Burkhardt (DFL) in the special  election to fill House Seat 11B, earning a little more than 68% of the vote. This seat had been held by Rep. Rarick who move to the Senate in a special election in Februaury.  

Top Legislative News 
What's Next?

With the focus soon shifting to the finance committees, budget Chairs have already begun working behind the scenes to put together budget bills that will meet their goals and those of their caucus.  This is an easier task f or some, than for others. 

These budget bills will begin to emerge in the next few weeks and then the "mark up" process will begin, as they eventually head to the floor for final votes.

Cap O'Rourke
President, O'Rourke Strategic Consulting 

Cap O'Rourke | (612) 483-1863 | |
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