Final negotiations over how much to spend, save and give back through tax cuts begin in earnest this week, as House and Senate conference committees line up to sort out their differences. The first order of business is marrying the two chambers’ supplemental budget bills, which find Democratic legislators seeking a compromise between two considerably dissimilar spending priorities.
Most notably, the House intends to use a portion of the remaining surplus for $322 million in new expenditures during this budget biennium, while the Senate bill spends just $210 million. The two chambers’ plans grow even further apart in the “tails,” the 2016-17 budget biennium: The House bill totals about $940 million in new expenditures, nearly $200 million more than the corresponding figure in the Senate. All told, the Senate plan would leave nearly $740 million in projected surplus on the bottom line for 2016-17, while the House bill would put that figure at $362 million.
Aside from the bottom-line disparities, the chambers have also staked out different positions on where to direct resources, with the House carrying increases for education, transportation and economic development — none of which are matched on the Senate side of the ledger.
Sen. Charles Wiger, DFL-Maplewood, who is among the upper chamber’s conferees, said the Senate DFL caucus would have liked to do more spending in certain areas, including the E-12 Finance Division, which he chairs. But those desires were tamped down early on this session, as Senate lawmakers received “very specific instructions” on how much surplus money to carry forward into the next budget cycle.
“It was made very important, by our leadership, for us to be fiscally responsible and live within our means — which we’ve done,” Wiger said.
Rural broadband touted in House
House leaders pushed one of that chamber’s positions with a Tuesday morning press conference, where DFL leaders drew attention to a $25 million expenditure toward expanding broadband access in greater Minnesota. That provision would help pay for high-speed Internet infrastructure around the state, which House Speaker Paul Thissen said he and other legislators heard a lot about as they toured the state over the Easter/Passover break.
“It is an issue of competitiveness,” Thissen said, “It’s also an issue about balancing the playing field between all parts of the state, so that no part of the state is being left behind as we move toward a 21st century economy.”
The Senate’s budget leaves out broadband funding entirely. Gov. Mark Dayton has expressed general support for broadband expansion, but did not include funding for that element in his own supplemental budget.
In total, the House supplemental package contains $38 million in new spending for economic proposals, while the Senate bill has around $17.6 million, with new outlays for a business development grant program and the Minnesota Minerals 21st Century Fund, a mining innovation program that stands to gain $5 million under the Senate plan.
Education: House raises general formula
The House and Senate differ widely on how, and how much, to allocate for education needs. Under the leadership of Rep. Paul Marquart, DFL-Dilworth, chair of the House Education Finance Committee, that body passed a $75 million funding boost for K-12 education. The bulk of the money would go toward a 1 percent increase in the general education funding formula, which accounts for more than $54 million this budget cycle. That increase would rise further still during the 2016-17 budget period, in which the provision carries a cost of $122 million.
The Senate’s approach to education funding was more targeted and specific, according to Wiger, who explained that he was “very focused” on finding additional funds for early childhood education scholarships. In sum, the Senate bill contains $41 million in supplemental education spending this budget, and about $66 million in the coming biennium, more than $100 million lower than the House figure.
That the Senate package includes a roughly $9 million line item for early childhood scholarships, while the House does not, was both “surprising” and “a little disappointing” to Rep. Ryan Winkler, DFL-Golden Valley, who carried that legislation this year. Winkler said he was confident that the provision could survive a conference committee, given that a number of conferees, including Sen. Richard Cohen, DFL-St. Paul, chair of the Senate Finance Committee, are in favor of the early childhood scholarship expansion.
“Getting $9 million out of a $1.2 billion surplus for kids in poverty does not seem like too much to ask,” Winkler said.
Differences include transportation spending
Also remaining to be worked out is the issue of transportation spending. The House contains a proposal for $50 million in one-time spending during fiscal year 2015; $11.5 million of that total would go toward repairing roads damaged by the prolonged and brutal winter, while another $10 million is set aside for the transportation department’s “Corridors of Commerce” fund. The Senate, meanwhile, passed just $9 million in new transportation spending, $8 million of which would pay for transit appropriations in greater Minnesota.
In some cases, the House and Senate are in agreement on how to handle spending during the 2015 fiscal year, but show marked differences in the subsequent biennium. On health and human services, both the House and Senate passed a 5 percent increase for disability service providers, which would cost of roughly $80 million in the current budget period, and another $192 million in the next. But the House plan also includes a 5 percent boost for nursing home facilities, which adds up to $35 million over the next two-year budget.
Speaking broadly, Wiger explained that House lawmakers were given wider latitude to spend across a number of categories, while the Senate tried to keep budgets tight where possible.
“[The House] had a bigger appetite, with more funds to deal with,” Wiger said. “That needs to be addressed soon.”