Sides dig in over finance bills

There’s a partisan fight brewing over salary increases and the Senate office building. Were it not for a slew of sunny, comfortable days, Capitol observers might be compelled to think it was still February, if not last October.

The cause for the new — or continued, as it were — rancor is the debut of the competing state government finance bills in the Senate and House. The Senate acted first, and with little fanfare, as a committee moved a state government and veterans omnibus package authored by Sen. Tom Saxhaug, DFL-Grand Rapids, early Monday evening.

The generally soft-spoken Saxhaug, a former insurance agent, spoke minimally during that hearing before the Senate State Departments and Veterans Budget Committee. He deferred to administration officials or nonpartisan staff for factual queries on his proposal, and left most of the divisive chatter over amendments to his fellow members.

The House package was different in nearly every way, including its presentation. The bill authored by Rep. Sarah Anderson, R-Plymouth, was introduced with an accompanying press release and statement, as the House State Government Finance chair pledged to hold the line on state spending.

Among the differences the upper and lower chambers will need to sort out is the small matter of about $100 million. The Senate committee target was roughly $1 billion, or $38 million above base-level spending, while the House proposal comes in at $902 million.

The House bill contains no salary increases for state employees, despite requests to that effect, and would cap the total number of state agency employees at 36,211. Under the bill’s language, the commissioner of Minnesota Management and Budget (MMB) could block the hiring of an individual employee to enforce this mandate. The bill indicates that staff reductions should minimize the impact on health care workers, corrections and public safety employees.

Anderson’s legislation also doubles as a broadside against a pair of issues that are seen as DFL vulnerabilities.

First, the House bill would cap any future pay increases for Cabinet commissioners, whose pay would be tied to the rate of inflation or the increase of the median income for Minnesota households, whichever is lower. Earlier this year, Gov. Mark Dayton incurred criticism from Republicans, and some Democrats, for unilaterally acting to increase Cabinet-level salaries.

Anderson also noted that her bill will not include any additional funding for the new Senate office building. Indeed, one section specifically excludes that possibility: About $2 million has been set aside for moving and renovation expenses related to construction on the Capitol building, but the bill language indicates that allocation “may not be used for moving Senators, Senate staff, and relate offices and supplies.”

Sen. Paul Gazelka, R-Nisswa, brought a similar line of attack to the Senate committee, introducing an amendment to cancel the inclusion of bonds for the Senate building, which he said should instead be moved as part of a capital investment bill.

“This is not how we normally do buildings,” said Gazelka, who added that bonding bills are a “much more transparent process.”

Sen. Leroy Stumpf, DFL-Plummer, chair of the Senate Capital Investment Committee, said there was no guarantee of a bonding bill this year, and noted that Rep. Jim Knoblach, R-St. Cloud, chair of the House Ways and Means Committee, had previously sued the state in an attempt to block the initial funding of the building.

“If this debt isn’t paid, then what happens to the credit-worthiness of the state?” Stumpf asked rhetorically.

Saxhaug essentially sidestepped the debate, saying only that he did not think removing the debt service would be “correct or effective.” The chairman’s lack of a resounding argument was a reflection of the committee’s makeup. Gazelka’s amendment failed along party lines, as did another from Sen. Bruce Anderson, R-Buffalo, that would have removed raises for the state’s public employees.

Those workers are due a 1.8 percent salary increase in Saxhaug’s bill, which adds at least $8 million to the bill’s total cost. Anderson said freezing state employee salaries would help pay for Dayton’s commissioner pay increases.

Sen. James Metzen, DFL-South St. Paul, said rank-and-file employees had “helped the state get out of the recession” by working without pay hikes for four years.

“I always believe that you’ve got to pay employees to keep good employees on,” Metzen said.

The committee ultimately adopted Saxhaug’s bill on a voice vote, sending it on to the Senate Finance Committee. In doing so, they adhered to a stated edict from Senate Majority Leader Tom Bakk, who has encouraged his caucus not to attach controversial policy measures to omnibus budget bills. To that end, the Senate bill does not provide for the new legislative budget office, which Bakk himself is carrying separately, and does not include proposed changes to the state’s various “ethnic councils.”

Sen. Patricia Torres Ray, DFL-Minneapolis, told committee members that different versions of ethnic council reform bills, “both controversial,” had appeared in the House and Senate. She explained that she intended to work on a compromise during the interim between sessions, but said she had been led to think the House would move forward with a reform measure this session.

The House bill was scheduled to first appear during a Wednesday morning hearing, and the committee schedule indicated that the panel could reconvene at 7 p.m. that evening, at 8:15 a.m. the following morning, or both, if necessary.