Funny money?; Senate Taxes, HHS proposals unveiled

WHAT’S HAPPENING TODAY

EVENTS

THURSDAY

10:15 – 11:15 a.m.:  Fifth Judicial District Drug Courts event, State Capitol Rotunda.

Noon – 1:30 p.m.:  Minnesota Zoo at the Capitol, State Capitol Rotunda.

3:00 p.m. – 4: 30 p.m.  American Red Cross event, State Capitol Rotunda.

4:00 – 8:00 p.m.:  Edward Burdick memorial. Roseville Memorial Chapel, 2245 Hamline Ave. N., Roseville.

7:00 p.m.:  U.S Farm Bill Discussion Panel.  Experts in Agricultural production and policy participate in an open forum and Q&A. Sponsor: Universities Fighting World Hunger. Free with museum admission ($5/adults. $3/students and seniors).  Bell Museum, University Ave. & 17^th Ave. S.E., Mpls.

WHAT HAPPENED YESTERDAY

FUNNY MONEY: Some $1.2 billion in projected House HHS Finance savings — about 75 percent of the chamber’s total HHS cuts, and 25 percent of the House GOP’s total deficit reduction measures — are too non-specific to assess their real budget impact, DHS Commissioner Lucinda Jesson (pictured right) and MMB Commissioner Jim Schowalter told House HHS Finance Chair Jim Abeler in a letter sent Wednesday. 

The letter was just one salvo in a heightened wave of DFL criticism Wednesday over some of the accounting behind GOP budget proposals. Abeler’s bill, for example, assumes more than $700 million in savings from unspecified cost-saving measures and proposals that depend on the granting of a federal waiver. His Senate counterpart, David Hann, had slightly more detail in some of his suggested spending cuts, but more than $600 million of his $1.8 billion cut comes from the assumption that Washington will approve a waiver even more sweeping and more deeply at odds with Obama administration policy than Abeler’s proposal.

Republicans, meanwhile, seem undeterred, and all signs say they’ll move forward with or without official fiscal notes. Specifically, Hann told us his bill contains no fallback measures to balance the budget if his projected savings aren’t realized, something a number of other chairs (Abeler included) have at least included in their bills.

COHEN: Criticisms of overblown savings claims aren’t restricted to the HHS budgets. Former Senate Finance Chair Dick Cohen pointed to a pair of GOP state government measures that represent savings of $83 million on Republican spreadsheets, but just $4.7 million in recently released fiscal notes. “You simply cannot make up a number and book it in your budget,” Cohen said flatly.

HMOs: Gov. Mark Dayton announced an executive order reforming the way the state deals with HMOs under its public health care programs. The order, an apparent victory for the growing chorus of bipartisan voices calling for greater transparency in HMO accounting/spending, requires regular audits and competitive bidding for contracts. See more from PIM here.

SENATE TAXES: Capitol observers got their first look at Sen. Julianne Ortman’s taxes proposal Wednesday. Most notable was its treatment of LGA cuts: The bill simply kept the language already passed by the Legislature (and vetoed by Gov. Mark Dayton) earlier this session. That “phase one” bill froze LGA payments at 2010 levels for the next biennium. Ortman tried to paint the proposal as a compromise, striking a balance between the much-maligned House local aid proposal to concentrate cuts in the cities of Minneapolis, St. Paul and Duluth and Dayton’s proposal to hold all local aid programs harmless. Watch for Senate GOPers to paint this picture moving forward as they try to position Ortman’s proposal as the moderate compromise.

Here are a few other items worth noting from the bill:

• The bill would OK a 0.5 percent sales tax for all cities across the state — subject to voter approval. Depending how such taxes were structured, the cities adopting them could face some LGA offsets, however.
• The bill does not incorporate Sen. Geoff Michel’s corporate income tax relief proposal or House Taxes Chair Greg Davids’ income tax relief. “You can’t get everything you want,” Michel said after the hearing. Michel’s proposal was included in SF 1.
• The bill would phase out the corporate property tax over the next decade, and also includes $44.3 million in expanded property tax refunds and a $105 million reduction in the renter property tax refund.
• Several parts of the bill include language to clarify and modify mineral tax provisions ahead of anticipated — and controversial — nonferrous mining initiatives in northeastern Minnesota.
• Ortman’s proposal stands in stark contrast to the House’s, and she acknowledged as much when asked about the road ahead: “Oh, I know we’ll have some interesting meetings with the House,” she said.

SENATE HHS: Chair David Hann unveiled his omnibus proposal Wednesday as well, making public a package of deep — and in places questionable — budget cuts sprinkled with policy proposals that prompted one lobbyist to refer to it as “The Anti-Science Act of 2011.” In policy, the proposal blocks the state from spending its money or accepting federal money for family planning services, blocks cloning by any public or private entity, and eliminates the state blood registry, along with a host of other grant programs and medical boards.

The central tenet of its budget-cutting power, however, is a proposal that Hann estimates would save the state more than $650 million. The catch: It would require signoff from Washington. Hann would undo the early MA expansion and put all but the poorest Minnesotans (above 75 percent of poverty) who are currently on state health insurance into the Healthy Minnesota Contribution Plan, which subsidizes high-deductible, private insurance plans. This would effectively eliminate MinnesotaCare and the bulk of the state’s Medicaid program. The House proposal, in contrast, would keep the expanded Medicaid program, but seek a global waiver from Washington to run it however the state sees fit — and then turn MinnesotaCare into the Healthy Minnesota plan.

If the House waiver proposal seemed unlikely earlier this week — Dayton called it “fantasy island” — Hann’s looks by comparison like a Hail Mary. The House proposal would request that the feds approve a global waiver much like the one Rhode Island received in 2008. Hann’s proposal, however, would effectively be asking the Obama administration to sign off on a waiver that would drastically reduce the benefit of Medicaid to half the state’s recipients — at the exact time the Obama administration is looking to put millions more Americans into the program via its federal health reform law. Hann rejected that line of reasoning, however. Asked if he thought Washington would approve his plan, Hann replied, “I don’t know why they wouldn’t.” DFLer Linda Berglin asked Hann in committee when he planned to bring forward a “serious” proposal. “It’s a terrible bill,” she said.

MET COUNCIL WHACKED: Things took a curious turn in the Ways and Means Committee when Rep. Mike Beard‘s Transportation omnibus bill came up for review.  Rep. Ann Lenczewski, who’s been making noises about the dollars taken from Counties Transit Improvement Board funding in the GOP budget, criticized the Beard proposal for undertaking what she called a raid on local government funds to balance the budget. Calling it a tax-raising proposal, Lenczewski insisted that the bill should be referred to the Taxes Committee rather than the House floor. In a move that surprised Beard, lobbyists and folks from the Met Council, Chair Mary Liz Holberg pulled out of the bill the entire section dealing with CTIB and other local funding. That leaves the Met Council short $69 million in state allocations over the biennium — since those funds would have originally come from the local taxing units. Holberg said the group will have to “figure out how to fill the hole.”

BEARD’S TAKE: After the Met Council changes, Beard told us, “If you don’t believe in the Resurrection, hang around here. All kinds of dead things come back to life.”

IRON RANGE: The Iron Range delegation will look to flex some of its much-diminished muscle today when Rep. Tom Anzelc, Rep. Tom Rukavina and other members of the delegation take aim at some of the more creative accounting proposals suggested by the GOP at an 11 a.m. news conference. Expect the lawmakers to focus specifically on a proposed $60 million transfer to the general fund from the Douglas J. Johnson Economic Protection Trust Fund, which is underwritten by taconite taxes.

EDUCATION FINANCE IN WAYS AND MEANS: Rep. Pat Garofalo, presenting his Education Finance bill to the Ways and Means Committee, was careful to point out that the bill came in at 99.8 percent of the level of the Dayton budget. Still, the Dayton administration hasn’t seem convinced: Education Commissioner Brenda Cassellius criticized the bill earlier this week and signaled it was a prime veto target.

DILL DEMURS: Arrowhead Rep. David Dill, most often aligned with the hook-and-bullet set, told the House Environment and Natural Resources Committee that he would not be voting for its omnibus bill, saying that cuts in PILT funding were “unconscionable.”  He told us that though there were some amendments added to the bill that would help folks in his district, he could not vote in favor of an “all-cuts bill.”

WHITHER RACINO?: We caught up with the Minnesota Family Council’s Tom Prichard hanging out with the lobbyist scrum outside Senate Chambers. Prichard said racino legislation faces an uphill battle, as conservative Republican lawmakers would not support the bill. He noted that opposition to gambling expansion is a part of the state’s GOP platform.

NEW SHOP: Former U.S. Rep. Jim Oberstar’s chief of staff Bill Richard started his own public affairs shop earlier this year and has been doing federal relations work for Gov. Mark Dayton. This week, known in Washington as March Madness (the time when constituents come to press funding needs with lawmakers), found Richard escorting Lt. Gov. Yvonne Prettner Solon through a series of meetings with Minnesota’s Congressional delegation.

ON THE MOVE: Kate Lerner will be leaving the Minnesota Association of County Social Service Administrators, where she has been the organization’s director, at the end of April. She is taking a new job as director of county relations at the Minnesota Department of Human Services.

TODAY’S CAPITOL SCHEDULE

The Senate will be in session at 11 a.m.

The House will be in session at noon.

HOUSE COMMITTEE HEARINGS

The Environment, Energy and Natural Resources Policy and Finannce Committee will hear HF 1162, nonnative species provisions modified, permits to control or harvest aquatic plants requirements modified, and criminal and civil penalties provided, at 8:15 a.m. in 5 SOB.

The Judiciary Policy and Finance will continue testimony on its omnibus bill HF 440 at 8:15 a.m. until noon. The committee will reconvene if necessary at 4:30 p.m. in 10 SOB and meet again, if necessary, at 8:15 a.m. in 200 SOB.

The State Government Finance Committee will continue mark-up of its omnibus bill and hear amendments at 8:15 a.m. in 200 SOB.

The Agriculture and Rural Development Policy and Finance Committee will hear its omnibus bill HF 1039 at 10:15 a.m. in Basement SOB. The committee will recess at 4:00 p.m. and reconvene at 4:30 p.m. in 5 SOB.

The Health and Human Services Finance Committee will hear and take action on its omnibus bill HF 927 at 12:30 p.m. in 200 SOB and will recess at 4 p.m. and reconvene at 4:30 p.m. 5 SOB.

The Jobs and Economic Development Finance Committee will hear its omnibus bill HF 1049 at 12:30 p.m. in 10 SOB.

The Ways and Means Committee will hear three bills at 1 p.m. or after session at the call of the chair in 200 SOB.

HF 934 Education Omnibus Bill
HF 1101 Higher Education Omnibus Bill
HF 1010 Environment, Energy and Natural Resources Omnibus Bill

SENATE COMMITTEE HEARINGS

The Finance Committee will hear three bills throughout the day Thursday, starting with the Agriculture and Rural Economies Budget bill at 8:30 a.m. in 123 Capitol. The committee will recess when that’s finished or for session and resume afterward in Capitol 118 to hear the higher education omnibus bill S.F. 924 and the jobs omnibus bill S.F. 887, assuming both measures are ready to be heard.

The Health and Human Services Committee will work on its omnibus bill S.F. 760 at 8:30 a.m. in 107 Capitol.

The Taxes Committee will work on its omnibus bill S.F. 27 at 8:30 a.m. in 15 Capitol.

The Judiciary and Public Safety Committee will hear its omnibus bill S.F. 958 and amendments with the intention of passing it at 1 p.m. in 15 Capitol.

The Transportation Committee will hear its omnibus bill S.F. 898 at 1 p.m. in 123 Capitol and, if necessary, recess at 2:30 p.m. and reconvene at 5 p.m. in the same room.

The Energy, Utlities and Telecommunications Committee will hear its omnibus bill and take final action on it at 3 p.m. in 123 Capitol and, if necessary, the agenda will be continued at 4:30 p.m. in 318 Capitol.

The Environment and Natural Resources Committee will hear nine bills at 3 p.m. in 107 Capitol.

S.F. 673 Adopt-a-WMA (wildlife management area) program establishment.

S.F. 25 Itasca county tax-forfeited lands pilot land exchange process creation.

S.F. 92 Carlton county tax-forfeited land bordering public water public sale authorization.

S.F. 181 Carlton county tax-forfeited land bordering public water sale.

S.F. 439 St. Louis county tax-forfeited land sales.

S.F. 492 Pine county tax-forfeited land private sale.

S.F. 560 Itasca county tax-forfeited land bordering public waters sale.

S.F. 606 Aitkin county private sale of surplus lands and conveyance of public lands.

S.F. 712 State lands valuation methods for acquired lands modification; state parks, forests, recreation areas and wildlife management areas additions and deletions; public and private sales of certain surplus state lands authorization.

The State Government Innovation and Veterans Committee will continue discussion of its omnibus bill at 6 p.m. in 318 Capitol.

HOUSE COMMITTEE HEARINGS

HF 12 Green acres and rural preserve program changes made. Passed by Ways and Means Committee. Referred to House floor.

HF 42 Omnibus tax bill. Passed by Ways and Means Committee. Referred to House floor.

HF 651 Relating to natural resources; establishing LaSalle Lake State Recreation Area as a satellite unit of Itasca State Park; appropriating money. Laid over in Legacy Funding Division for possible inclusion in omnibus bill.

HF 658 Dakota County; Darvan Acres Nature Center money appropriated. Laid over in Legacy Funding Division for possible inclusion in omnibus bill.

HF 792 Watline Trail funding provided and money appropriated. Laid over in Legacy Funding Division for possible inclusion in omnibus bill.

HF 816 Air National Guard Museum funding provided, and money appropriated. Laid over in Legacy Funding Division for possible inclusion in omnibus bill.

HF 934 Education Finance omnibus bill. Passed by Taxes Committee. Referred to Ways and Means.

HF 985 Oliver H. Kelley Farm Historical Site funding provided, and money appropriated. Laid over in Legacy Funding Division for possible inclusion in omnibus bill.

HF 1010 Committee omnibus bill. Amended and passed by Environment and Natural Resources Committee. Referred to Ways and Means.

HF 1039 Committee omnibus bill. Amended and passed by Agriculture and Rural Development Policy and Finance. Referred to Ways and Means.

HF 1140 Omnibus transportation bill.  Passed by Ways and Means Committee. Referred to House floor.

SENATE

SF 664 Laid over in Capital Investment Committee for possible inclusion in omnibus bill.

SF 779 Goodhue county surplus state land conveyance to the city of Red Wing. Amended and passed by Local Government and Elections Committee. Referred to Senate floor.

SF 887 Committee omnibus bill. Passed by Jobs and Economic Growth Committee. Referred to Finance.

SF 899 Committee omnibus bill. Amended and passed by Commerce and Consumer Protection.  Referred to Finance.

SF 919 Election administration and districting procedures modifications. Amended and passed by Local Government and Elections Committee. Referred to Senate floor.

SF 921 Authorizing single source acquisition of public  safety equipment; authorizing long-term leasing of public safety equipment. Amended and passed by Local Government and Elections Committee. Referred to Senate floor.

SF 924 Committee omnibus bill. Passed by Higher Education Committee. Referred to Finance.

SF XXXX Education omnibus bill. Amended and passed as a Senate file by Education Committee. After floor introduction, will be referred to Taxes.