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First bills target schools, taxes

Briana Bierschbach//January 11, 2013

First bills target schools, taxes

Briana Bierschbach//January 11, 2013

House Speaker Paul Thissen, left, and Senate Majority Leader Tom Bakk, right, promised to balance a projected $1.1 billion budget deficit without gimmicks and without heading into a government shutdown. (Staff photo: Peter Bartz-Gallagher)

But House and Senate differ in approach

In their first joint action of the 2013 session, the newly elected Democratic leaders of the Minnesota Legislature held a news conference to show they were on the same page regarding broad goals for the biennium. First and foremost, House Speaker Paul Thissen and Senate Majority Leader Tom Bakk promised to balance a projected $1.1 billion budget deficit without gimmicks and without heading into a government shutdown.

“The Speaker and I actually shook hands this afternoon that we are not going to participate in a state government shutdown,” Bakk said on Wednesday. “One little caveat: We haven’t talked to the governor about that yet, but I assume he’s not going to want to through another one either.”

Their similarities seem to end there. The first 10 bills released from both chambers this week — which, historically, have been taken as an expression of top caucus priorities — paint a picture of two leaders with fairly different ideas of how the session ahead should play out. While House File 1 proposes to pay back about half of the state’s remaining school shift balance — which stands at roughly $1.1 billion — Senate Democrats opted to invest in early education in its first bill introductions. Senate Democrats proposed two different bills to make it harder to pass constitutional amendments in the Legislature, while a marquee bill from House Democrats deals with direct property tax relief.

“Believe it or not, Rep. Thissen and I did not have a conversation about what each body should lead with,” Bakk said. “It’s a bicameral Legislature.”

House Majority Leader Erin Murphy also warned that, despite DFL control of both legislative bodies and the governor’s office, Capitol watchers should not expect to see them marching in lockstep. “We are not always going to agree,” she said. “We are going to be like a choir: Sometimes we’re going to be in great harmony, and sometimes there are going to be some tunes or tones that are going to be a little off.”

Senate bills: taxes, constitutional amendments

Health and Human Services Division Chairman Tony Lourey earned the honor of carrying Senate File 1, which proposes to set up a state-administered marketplace where individuals and corporations will be able to purchase health insurance, as required by the terms of the 2010 federal Affordable Care Act (ACA). Lourey and DFL Rep. Joe Atkins released the proposal at a bipartisan bill unveiling this week, noting that the bill’s prominence in both chamber’s session priorities is a matter of timing. The state is facing a March deadline to enact such legislation in order to be in compliance with the ACA, which will be fully implemented in 2014.

Under the legislation, the exchange will be overseen by a seven-member board, and the state’s cost of implementing the exchange is expected to be paid for by tapping up to 3.5 percent of premiums on plans sold through the exchange.

The Senate’s second bill hits at a priority mentioned by all three Democratic leaders this week: investing in education. The Senate route will establish all-day kindergarten education. Freshman DFL Sen. Greg Clausen, who has served as a principal in the Apple Valley and Rosemount districts, has authored the proposal, which would put the state on the hook to fund the program in state schools at an estimated cost of $170 million per year starting in the fall of 2014. (Parents would still be allowed to opt for half-day kindergarten for their children.)

Brooklyn Center DFL Sen. Chris Eaton will carry Senate File 3, a bill to increase the minimum wage from $6.15 to $7.50. The bill includes a provision to index that figure to inflation in years ahead.

“Whether it’s a teenager in a part-time job or low-income workers struggling to stretch each paycheck, putting more money in the pocket of minimum wage earners is good for the whole economy,” Eaton said. “The money is going to be spent at local businesses.”

Bakk himself will carry Senate File 4, which proposes changing state law to require a three-fifths vote in both chambers to pass a constitutional amendment on to the general election ballot. The bill would also require one election cycle to pass after an amendment is approved before it can be placed on the ballot. But some legal observers say it would take a constitutional amendment to change the majority requirement that’s already spelled out in the state constitution. And another of the Senate’s first 10 bills, authored by DFL Sen. Dick Cohen, is couched as a constitutional amendment to require a two-thirds majority in the Legislature to pass a constitutional amendment.

Those bills come after an election cycle that saw two GOP-led ballot initiatives (a gay marriage ban and a voter photo ID requirement) defeated by voters. “Minnesota just came off of one of the most divisive elections our state has ever seen. Sign wars in neighborhoods, sign wars in communities, ‘Vote No’ and ‘Vote Yes,’” Bakk said. “I hope that we never have to go through another election like that.”

Rounding out the list of the upper chamber’s top 10 bills is a handful of tax policy changes straight from the desk of Tax Reform Division Chairwoman Ann Rest. One would require online national retailers like Amazon and eBay to collect online sales taxes on purchases made in the state. Another bill would lower state’s sales tax rate while removing an exemption on the purchase of clothing that costs more than $200.

Bakk says he can’t handicap the chances that any particular tax bill will pass this session. “I don’t know the answer to that,” Bakk said when asked if Rest’s sales tax proposal was a priority. “Members will introduce bills, and what they will have to do is figure out how to get 34 votes for them.”

House: property taxes, school shift

House and Senate Democrats have set up a fight between thechambers on the biggest non-budget priority for the session: education.

The House File 1 slot was reserved for a bill that would repay roughly $550 million to the state’s schools, or about half of the money owed to districts after years of balancing budgets by delaying payments to schools. House Democrats made it a major issue on the campaign trail this year. As in the Senate, the House gave its top education bill to one of its prized freshmen: DFL Rep. Yvonne Selcer of Minnetonka, a former president of the Hopkins school board.

“We dug ourselves a hole,” Thissen said on the opening day of session, shortly after being elected speaker. “One of the ways to get our budget back in order in a permanent way is to pay back that school shift.” Bakk, however, says he doesn’t see a need for a school shift payback bill because there’s already a provision in state law that requires the state to pay back the funds.

The House’s second bill, authored by DFL Rep. Jim Davnie, will deliver direct property tax relief. In the bill, the Department of Revenue would proactively tell people that they are eligible for a property tax refund. The bill also increases the percentage of rent that is defined as property taxes.

House File 3 allocates $30 million between 2014 and 2015 to a new Minnesota Investment fund under the direction of the Department of Employment and Economic Development (DEED). House File 4 makes modifications and sends money to the Minnesota Trade Office, and the fifth House bill is Atkin’s proposal to set up an insurance exchange.

The House and the Senate do have a few ideas in common. For instance, both DFL majorities want to see an expansion of Medical Assistance. Both chambers are also aiming to raise the minimum wage, but House File 10 proposes a much bigger bump to the minimum wage than the Senate.

Instead of raising the wage to $7.50 an hour, House bill author Joe Mullery wants large employers — with profits exceeding $625,000 annually — to pay employees a minimum wage of $9.83 an hour, and small employers to pay $8.01 an hour. Both bills include a provision that will adjust the minimum wage for inflation in the following years.

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