While you were sleeping

After a pretty lackluster day yesterday that featured a hospital expansion bill in the Senate and an anti-pipeline protest bill in the House both houses convened late yesterday into Sunday morning for the Omnibus spending bill debate.  This bill contained spending for most of state government and appeared to winnow down the 117 objections that governor Dayton had submitted a day earlier while still leaving some intact or with slightly modified language. 

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A quick update on Pensions

The Pension bill has been calendared for Sunday the 20th, the very last day that the Legislature can pass a bill. We posted a description of it earlier and there are only a few changes dealing with some local issues.  If you want to look at the financial aspect here are the numbers.  And remember, these are just the state's costs.  Local governments, particularly school districts will pay in more as well. 

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The 3M settlement: What happened in the Legislature?

Earlier this session we heard about the 3M settlement on contamination of water in the east Metro.  Legislative hearings were held that focused on (1) The terms of the settlement including instructions about what was to be funded with it (2) the administrative fees that government was able to take from the settlement before any money would be spent on water quality and (3) the cost of outside council contracted by the Attorney General.  We wrote about the hearing here.

Rep. Kelly Fenton and Sen. Karin Housley, who represent Woodbury, one of the affected communities, brought a bill that directs where the money should be spent.  Let's look at that. 

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Will the Governor sign a Tax Bill this session?

We wrote earlier about the house tax bill process.  As expected the House's tax language prevailed in sections that were different in the conference committee. But the Governor vetoed it. There isn't time left in the session to go back to square one, so will the Republicans give something up (like more school funding) and bang together a last-minute bill to try to get Dayton to sign at least a conformity bill?  

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Another Fortune 500 company says goodbye

Fortune 500 company Mosaic Fertilizer is moving to Florida. Mosaic follows a trail of different companies headquartered in MN who have left, either on their own or as a result of a merger or acquisition.  Majority Leader Paul Gazelka handed out his own list during the tax bill debate this week.


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The Bonding Numbers Game


Yep this is a bonding year but basic disagreements between the governor and the legislature have turned this into a hot potato year after year. 

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The Regulatory Session?

The second year of every session is often known, not only as the session when the bonding bill gets passed but also when policy bills are worked on and discussed. Policy generally includes some type of regulation. We are interested in lessening the regulatory burden which has come about as a result of the growth of government because it is a hidden cost of government and one that has negative effects along with whatever the benefits that they were intended to have.

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Senate Spending bill passes, waits for House version

The Senate rolled up all their spending bills into one large "Omnibus" bill, on Thursday, which contains and combines the spending bills from all of the various finance divisions. The Senate debated the bill in one marathon session of nearly 12 hours, Democrats pointed out that it violated the single-subject law, but only John Marty, an ideological purist among DFLers really had standing to complain, since the "Supplemental Spending bill" has been passed as a single bill many times in the past, with DFL authorship.
Unless the House rolls up their bills as floor amendments it looks like they will be sent to the Senate as different bills. This will require some coordination during the Conference committee to match up the parts.  Again, no new thing as when you have differences of placement in legislation like this, what happens is a rotating cast of characters at the conference committees, so that when one team finishes it's portion of the bill, another team takes over, with the respective chairs of the committees taking the gavel.
What's in the Senate bill?
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The 2018 House Tax Bill


The Tax bill was debated on the floor of the house and passed 38-90. (See rollcall below, DFLers voting for it in yellow). The bill had bipartisan support. 

Roll call for passage, Tax Bill 2018

The DFL tried various amendments, including a few that played the class warfare card by cutting portions of the bill dealing with the Corporate Alternative Minimum Tax (AMT) which the House bill removed and in one case, giving the money back as property tax rebates.  




4/24/18 7:02 pm

In the afternoon markup session, the Tax committee amended HF 4843 with the DE Amendment which contained the new text of Chair David’s bill.  The property tax committee’s bill was also amended to the main Tax bill. 

Other attempted amendments and discussion:

Local Option Sales Tax increase for Duluth—Duluth voters approved this and Duluth streets are in bad shape but Property Tax Chair Steve Drazkowski pointed out that Duluth city taxes are already very high. He suggested that they trade pre-emption (no local minimum wage and benefit laws) for the tax increase. The author withdrew the amendment.


Removing the cap on the Minneapolis Lodging tax.  In 1986, a cap was put on how high the lodging tax could be.  Not a lot of discussion. Chair Drazkowski again expressed his displeasure at high taxes in certain cities but said that the committee could vote up or down. It failed on a 10-10 vote. 


A couple of amendments adding pieces of the Governor’s tax bill, like the working family tax credit expansion, affordable housing, increasing LGA in exchange for removing corporate tax cuts or replacing the Corporate AMT, which the bill removes. These failed.


The committee spent about 20 minutes discussing an amendment for a property tax abatement for a nonprofit mental health organization that bought property in Duluth a few days past the abatement deadline.  The property was worth about $17K. It was a good example of how the legislature has to act to resolve some tax questions for local governments.


In the summary portion of the hearing:


Chair Pat Garofalo: “96% of filers will see no change.”…”You’ve made some significant concessions up front.”


Davids was commended all around for getting a tax bill that was more likely to be signed by the Governor.


Minority Lead Paul Marquardt suggested that more individual income tax deductions would be the area were negotiations could happen.


4/24/18 2:29 pm

A first look--

The House Tax Committee did a walk through this morning and afternoon of their tax proposal after the Governor released his bill last week.  From here on out, the Tax committee will continue to work on the bill until it’s done, recessing instead of adjourning

The bill contains the House’s attempt to conform to the TCJA (The Tax Cuts and Jobs Act of 2018), and it does that – partially – and it puts a number deduction taken away by the Federal tax back in play.

Here is a summary where they agree with the Governor’s bill (so likely to be put into law).

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