May 10 - 2019

T-minus 10 days ....
Last week I told you that both House and Senate leaders had a mutual goal of having budget targets set by May 6th. If you remember, I also mentioned that I had significant doubts, given some pretty huge divisions at the Capitol. This week the leaders proved me - and every other capitol regular - correct, when they did NOT reach agreement on spending targets by May 6th...or May 7th or 8th or ... well, let's just skip ahead to this Sunday, when negotiations are scheduled to resume at 6pm.

As a precursor to those negotiations, legislative leaders are scheduled to climb into a small vessel this weekend to see if agreement can be found. No really, it's the Governor's fishing opener this weekend, so Governor Walz and all four legislative leaders will be in a boat Saturday, trying to work this out. But the official negotiations will be held Sunday.

We are at that time of session when there are offers - and counter offers - and then someone is insulted at an offer ... and round and round we go. There are many issues that are currently preventing agreement but the most significant points of disagreement are related to revenue raising. There are two major revenue increases that both Governor Walz and the House are relying on; the provider tax and the gas tax. Not surprisingly, GOP leaders are opposed to both.
  • The provider tax is a 2% tax on medical bills and was set to expire. It creates $1.4 billion each bienium. DFLers want to eliminate the expiration date and keep the rate as is.
  • The proposed gas tax would add up to 5 cents - every 6 months - up to a maximum of 20 cents (more) per gallon. It would raise the state's current gas tax from 28.5 cents per gallon to 48.5.
Meanwhile, conference committees were running at full steam this week (some much more amicably than others) but without a budget to reference, it makes reaching  "agreement" pretty difficult. After reviewing  the funding and policy differences some committees have adopted a few "same or similar" provisions but in reality, little has actually been moved. Mostly, everyone is just waiting until targets are set.


Conference Committees
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Conference Committees - Schedule
For updates call 651-296-0504

You can find all Side by Side language comparison here on the Mn revisors website.
 
Omnibus agriculture, rural development and housing 
SF 2226/HF 2200
Senate Conferees: Westrom, Weber, Goggin, Draheim, Dziedzic
House Conferees: Poppe, Hausman, Pelowski, Vang, Gunther
1100 Minnesota Senate Building 

Omnibus E-12 education bill
SF 7/HF 2400
Senate Conferees: tbd
House Conferees: Davnie, Youakim, Pinto, Sandstede, Urdahl
5 State Office Building

Omnibus environment and natural resources 
SF 2314/HF 2209
Senate Conferees: Ingebrigtsen, Ruud, Eichorn, Johnson, Tomassoni
House Conferees: Hansen, Persell, Fischer, Becker-Finn, Nelson, N.
G-3 Capitol

Omnibus health and human services 
SF 2452 /HF 2414
Senate Conferees: Benson, Abeler, Utke, Jensen, Marty
House Conferees: Liebling, Moran, Schultz, Halverson, Hamilton
1200 Minnesota Senate Building

Omnibus higher education 
SF 2415 /HF 2544
Senate Conferees: Anderson, P., Draheim, Jensen, Relph, Clausen
House Conferees: Bernardy, Pryor, Lien, Klevorn, Nornes 
123 Capitol

Omnibus jobs, energy and commerce bill
SF 2611/HF 2208
Senate Conferees: Pratt, Dahms, Osmek, Housley, Simonson
House Conferees: Mahoney, Wagenius, Stephenson, Long, Hassan
10 State Office Building

Omnibus judiciary and public safety bill
SF 802/HF 2792
Senate Conferees: Limmer, Anderson, B., Johnson, Lang, Latz
House Conferees: Mariani, Lesch, Moller, Pinto, Zerwas
120 State Office Building

Omnibus state government bill
SF 2227/HF 1935
Senate Conferees: Kiffmeyer, Anderson, B., Koran, Mathews, Carlson
House Conferees: Nelson, M., Freiberg, Ecklund, Kiel, Dehn
G-23 Capitol

Omnibus tax bill
SF 5/HF 2125
Senate Conferees: Chamberlain, Senjem, Dahms, Howe, Rest
House Conferees: Marquart, Loeffler, Lislegard, Gomez, Davids 
G-15 Capitol

Omnibus transportation bill
SF 1093/HF 1555
Senate Conferees: tbd
House Conferees: Hornstein, Koegel, Tabke, Richardson, Torkelson
200 State Office Building
What's Next?

So this weekend Governor Walz and four caucus leaders will go fishing and hopefully have some fun and lighthearted discussions. Then on Sunday, they will restart budget negotiations to reach a final agreement.

IF they are going to finish up on time, both sides will have to give. 
The Governor and House will likely have to significantly reduce and delay the gas tax, if not lose it all together. The GOP will probably need to accept some form of the provider tax or a replacement. If neither side moves from their positions, finding agreement will be ... challenging.

So far, there does not seem to be any particular hurry to reach a deal. Which, in reality, is not different from past years. There is certainly time to wrap up by May 20th (scheduled end of session) but the pace will need to pick up.

If/when targets are reached, we can expect conference committees to move very quickly to approve and adopt funding and some policy provisions. Then, staff will need to assemble the agreed language before they can be signed and voted on. This can all take time and lead to a rushed end of session; something all leaders said they wanted to avoid.
 
Cap O'Rourke
President, O'Rourke Strategic Consulting 

Cap O'Rourke | (612) 483-1863 | cap@orourkesc.com | www.orourkesc.com/
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