It’s crunch time at the Capitol and the week has been filled with long days on the Senate floor considering a variety of spending bills and other policy changes. DFL leadership in the House and Senate reached a final budget agreement with Governor Dayton on Sunday night.
However, late last night, the Governor and DFL leadership emerged with a second overall agreement which was slightly different from the original. The major sticking point continues to be the tax bill which will ultimately fund the budget. Still under consideration prior to last night’s budget accord were new taxes on alcohol, tobacco, a sales tax on clothing, new income taxes on some high earners, and a $.5 gas tax increase.
As a part of the newest agreement, income taxes on couples making more than $250,000 or individuals making $150,000 would increase to 9.85 percent, which would be the fourth-highest tax rate in the nation. For comparison with neighboring states, South Dakota has no income tax, North Dakota has a top rate of 3.99 percent, Wisconsin has a 7.75 percent rate, and Iowa comes in at 8.98 percent. Also included in the tax plan is an increase in the cigarette tax of $1.60 per pack, and the expansion of the sales tax to some business-to-business services without a drop in the overall rate. Leaders also indicated that as of Friday, the potential gas tax increase is still in negotiations.
As of this morning, only two of the major budget bills have been finalized in conference committee and re-passed by the full Senate. It is expected that another report, on the higher education bill, will be considered later on Friday.
Also this week, the Senate DFL majority pushed through S.F.778 (Pappas) which would allow for a vote by some home day-care providers and personal-care workers on whether they want to join a union. The proposal has been highly controversial through the process and actually failed in the Senate Finance Committee on an 11-11 vote. However, the DFL leadership forced another vote in that committee and the bill passed after Sen. Terri Bonoff (DFL) changed from no to yes. The floor debate on this legislation lasted 17 hours, but the bill was ultimately passed on a vote of 35-32. The House companion to this bill awaits action before that body.
Another bill which received significant focus was legislation that legalized gay marriage in Minnesota. The bill was passed by the Senate and signed by Governor Dayton in a capitol ceremony.
Other Happenings: The Elections omnibus bill was taken up on the Senate Floor this week. The House and Senate had been in agreement on several changes to our election process but several highly controversial items were also up for debate. In the end, the Senate decided to pass out three provisions that were broadly agreed upon, and not the controversial items. The remaining legislation makes technical redistricting adjustments to two House districts, creates an opportunity to replace non-partisan candidates on the ballot if they die in advance of the election, and removes obsolete election statutes. The proposal moves to conference committee to iron out the differences with the House. Additional proposals that remain in the House version are “no excuse” absentee voting, reducing in the number of people a single person can vouch for from 15 to 8, notification to persons convicted of a felony on their eligibility to vote, and electronic poll books. On Wednesday, the Senate passed a $485 million Legacy funding bill for a broad variety of habitat, clean water, parks and cultural heritage programs and projects. The bill will move to conference committee where the differences to the House bill will be discussed and hopefully worked out. The conference committee on the Higher Education Omnibus bill finished its work earlier this week and that final agreement will be considered on the floor today. The bill increases spending for higher education and places legislatively mandated tuition limits on institutions. Work continues in the E-12 Education Conference Committee. For much of the time, the focus has been on modifications to Minnesota’s current educational testing requirements for both students and teachers. The current testing requirements are being modified or eliminated altogether. This committee still has significant work to do on funding levels and other policy.