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Kathy E. Noecker

Budget conferees head toward finish line

Ag and job provisions last negotiating points in $283M package

DFL lawmakers capped a frenzied day of negotiations Tuesday with a relatively calm committee tour of nearly two-thirds of the $283 million supplemental budget proposal they are working to complete less than a week before the 2014 legislative session must adjourn.

Conferees on the supplemental appropriations bill hashed out roughly $180 million in spending in areas ranging from higher education to health and human services – by far the largest budget sector at $103.9 million – late into Tuesday night. The committee was expected to return to work Wednesday to begin finalizing other funding areas, including $54 million for education, $19.9 million for jobs and economic development and $12 million for the environment and agriculture.

None of those remaining pieces were fully negotiated as of Tuesday night, but lawmakers said the last portions of the deal were close. Rep. Lyndon Carlson, who chairs the House Ways & Means Committee, said a few provisions in the agriculture and jobs portions of the budget were the most significant hang-ups left.

With the budget committee close to finishing its work – and $103 million in additional tax cuts agreed upon – the only key fiscal proposal left for this year is an $850 million bonding bill accompanied by roughly $200 million in supplemental cash spending. Observers expect a deal on that front is also imminent.

“We adopted several major articles, and we’ll be finishing them up tomorrow,” Carlson said after Tuesday’s meeting. “We really made major progress this evening.”

The relatively relaxed conference committee stood in contrast to the frantic pace of negotiations earlier on Tuesday. Conferees spent much of the day rushing around the second floor of the Capitol between the House and Senate chambers, until Sen. Richard Cohen, who is leading the Senate side of negotiations, announced on the Senate floor that an agreement was in the works and the conference committee would meet shortly.

The House and Senate put out the spending targets by budget category on Monday, which set off the chain reaction of agreements on specific projects necessary to reach a final deal. Just before Tuesday at midnight, lawmakers had agreed on $15 million for Transportation spending, $22.25 million in higher education aid, $35 million for judiciary and public safety and $103.9 million for health and human services.

Spending target split House, Senate difference

The House originally had proposed to spend $322 million this session, while the Senate had allocated $210 million of Minnesota’s $1.2 billion surplus for a supplemental budget. In the end they agreed to spend $283 million for this biennium and $842.3 million in the tails.

Cohen noted in the conference committee meeting on Tuesday that one of the most significant challenges on the budget has been deciding how much money to leave on the state’s bottom line in the 2016-2017 biennium. The original Senate plan called for nearly $740 million of a projected surplus to remain, while the House wanted to leave $362 million. In the end, lawmakers left $604 million untouched.

Both chambers came in almost identically on the $35 million in additional spending for public safety. For higher education, both the House and the Senate came in with $17 million for the Minnesota Colleges and Universities system that ended up in the final bill. But the Senate secured more spending at the University of Minnesota than the House had originally proposed. Cohen has said stronger higher education funding was a Senate priority.

Health and human services ate up the most significant portion of the new spending, but lawmakers had little leeway on what they could spend it on.

Much of the $103.9 million health and human services target that lawmakers announced on Monday was eaten up by $80.3 million for a 5 percent pay increase for home care workers.

“This was a leadership decision, and one that’s long overdue,” said Sen. Tony Lourey, chair of the Senate Health and Human Services Committee. “I’m really glad we were able to accommodate the full 5 percent request.”

Additional pay increases for state workers related to the Minnesota Security Hospital and the Minnesota Sex Offender Program cost $11 million that wasn’t originally in either the House or the Senate proposals.

Lourey said other policies that took a significant amount of time to work out were a package that would end a payment cut to hospitals from 2011 and shift the levels of funding that hospitals are allocated. Both Lourey and Rep. Tom Huntley, who heads the House Health and Human Services Finance Committee, said they were pleased with the proposals.

“There’s other parts of [the supplemental budget bill] where they’re still having violent disagreements,” Huntley said with a laugh. “Tony Lourey and I never get violent about anything.”

Rural broadband dollars in question

One of the biggest sticking points in 11th-hour negotiations has been funding for rural broadband internet access in the jobs and economic development portion of the bill. The House had called for $25 million for rural broadband, while the Senate hadn’t included any funding for the proposal.

Carlson said the House was trying to hold out for $20 million funding in the proposal while the conference committee was still going on.

“They haven’t reached agreement on that particular item as far as the number is concerned,” he said. “I think they indicated a willingness to fund broadband, but it’s kind of caught up in the big picture as to what the funding level will be. From our perspective, $20 million is a good, viable number for moving broadband forward in greater Minnesota.”

Another key difference in the agriculture and environment section, Carlson said, was a House measure that would require reporting from companies of certain chemicals used in children’s products. “I know that’s one of the tougher issues,” he said.

On education, the House came into the negotiations with $75 million in funding, compared to the Senate’s $41 million.

Rep. Paul Marquart, DFL-Dilworth, said the finalized $54 million education target would include a blend of House and Senate plans falling into four main categories: additional money on the school funding formula, early childhood education, English language learning and funding for teacher evaluations.

“Those four areas right there will comprise the lion’s share of the budget,” Marquart said in an interview on the House floor Thursday afternoon, before the committee had met. “We’re really taking the strengths from both bills and making it into an overall package that is going to continue our way on putting every child on the path to the world’s best workforce, and that’s the bottom line.”

Just before the conference committee adjourned on Tuesday, Cohen reminded lawmakers that budget adjustments were still possible until the conference committee voted on the whole package. And with that, the marathon session was done – for public purposes.

“I’m convening the conferees over at my office,” Carlson said with a wink as he walked out of the hearing room, which had almost completely drained of lobbyists and observers minutes after the committee adjourned. “I think we’re in pretty good shape, quite frankly. I think we’ll be on the floor Thursday or Friday.”

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