Monday, May 19, 2008

2008 Legislative Session concludes

Legislative Recap

Note: A complete summary of all 2008 session laws that affect the Minnesota State Colleges2009 Mandates and Curiosities) will be prepared and published on the system’s Legislative Information Web site.

Bonding Bill

The Legislature passed a $925 million bonding bill early April, which included $280.9 million in projects and asset preservation for the Minnesota State Colleges and Universities system. Gov. Tim Pawlenty line-item vetoed the bonding bill for a total of $717 million in general obligation bonding, more than $100 million less the amount the governor set as a target. The system’s total after the line-item vetoes is $234 million, which is the largest bonding number the system has received. Included in the governor’s vetoes were six system projects totaling $46.7 million:

  1. #8 North Hennepin Community College business and technology addition and renovation, $13.3 million
  2. #14 Classroom renovations, $3.6 million at Central Lakes College, Minnesota State Community & Technical College, Minnesota West Community and Technical College, Northland Community and Technical College, Pine Technical College and Rochester Community & Technical College;
  3. #15 Lake Superior College health science center addition, $11 million;
  4. #16 Metropolitan State University classroom center, $5.0 million;
  5. #19 Mesabi Range Community & Technical College shop space addition and renovation, $5.0 million; and
  6. #28 Property acquisition, $8.8 million at Bemidji State University, Dakota County Technical College, Fond du Lac Tribal & Community College, Minnesota State University Moorhead, Vermilion Community College, Minnesota State College - Southeast Technical and Metropolitan State University.

For a complete list of the bonding projects funded, please go here.

At the final hour, lawmakers were able to pass a second bonding bill that was tied in with the global agreement between the governor and legislative leaders. Bonding Bill Phase II totaled $105.5 million and included:

• $70 million for the Central Corridor light rail
• $20 million to acquire land for Lake Vermilion State Park
• $10 million for demolition and construction of 100-bed nursing facility on the campus of the Minneapolis Veterans Homes
• $3.4 million for capital asset preservation and replacement; and
• $2 million for removal and replacement of the old Cedar Avenue bridge in Bloomington to be used by bicyclists and foot traffic.

Budget Bill

The February state economic forecast indicated that the state would be experiencing a $935 million state budget deficit for fiscal year 2009. Legislators worked hard to craft a solution to resolve this deficit. One large omnibus supplemental budget bill was created that included all areas of state government, including higher education. Everyone was part of the solution.

The omnibus supplemental budget bill conference committee report included a cut of $6.6 million to the Minnesota State Colleges and Universities system. Neither the House nor Senate voted on the conference committee report, and instead waited to send it to the governor while session-ending negotiations were taking place between legislative leaders and the governor. At the final hour, they reached an agreement, and the impact to the system changed slightly with a cut of $8.6 million. $7.6 million of the cut is base money, with an additional $1 million one-time to be taken from the central reserves in fiscal year 2008. The tails going into the next biennium, FY2010-11, are a cut of $7.7 million a year, or a biennium total of $15.4 million.

The bill includes rider language that says $5 million of the cut is to be taken from technology and the remaining amount is to come from the Office of the Chancellor budget, not affecting campuses. The bill also includes tuition language that says the system is to appropriate $9 million to buy-down tuition to 2 percent at colleges and 3 percent at universities.

There was funding in the original conference committee report for four programs; $900,000 for the Power of You, $120,000 for the Teachers of Diverse Backgrounds, $1 million to resolve a tuition revenue loss in reciprocity due to a law change in the 2007 session, and $500,000 to bring tuition down to one rate for four institutions.

In the final report, the Power of You program was cut $300,000 from $900,000 to $600,000 and will now be one-time funds instead of base money. The money will be for three institutions; St. Paul College, Minneapolis Community & Technical College and Metro State University. The Teachers of Diverse Backgrounds program remains at $120,000 but it is one-time money instead of base dollars.

The language and funding for nonresident tuition and reciprocity tuition was replaced with new language. There is no longer any new funding in the bill, but rather the system is required to fund it out of appropriation received in 2007.

"From the appropriation in Laws 2007, chapter 144, article 1, section 4 Subd.1, the Board of Trustees shall allocate funding to campuses that lost revenue as a result of the decision in this law to eliminate nonresident undergraduate tuition at specified campuses."

The governor's ACHIEVE program that was originally slated for a $7 million cut was restored and will remain whole in the new bill, and the use for the state grant surplus remained the same. $9.445 million will go to the living and miscellaneous expense with a slight amount remaining in the state grant for a cushion.

The agreement to resolve the almost $1 billion budget deficit includes $500 million to be taken from the state’s $653 million budget reserve, $355 million in cuts, $30 million to come from accounting shifts, and the omnibus tax bill includes $109 million from closing a tax loophole. The state’s $350 million cash flow account will be preserved. The House approved the budget bill by a vote of 115-19 and the Senate passed the bill 56-11. The governor is expected to sign the bill. As we start to think about the next budget cycle, the governor and legislative leaders did say that the projected 2010-11 biennial budget deficit will be somewhere between $1 billion and $2 billion.

You may view the complete omnibus supplemental budget bill here.

Higher Education Policy Bill

In addition to the budget bill, lawmakers passed a higher education policy bill with no opposition. The Senate passed it by a vote of 64-0, and the House passed it 132-0. The bill was signed by the governor and includes:

• language that adds the spouse of a veteran as a Minnesota resident in the state grant program;

• authority to share data between the Minnesota Department of Education and the Office of Higher Education;

• language that makes permanent the use of any state grant surplus to be used for living and miscellaneous expenses;

• language that provides clarification to the Achieve scholarship program;

• authority for a nonprofit organization to use 5 percent of TEACH grant funds for administration purposes;

• language that adds two-year colleges as potential users of the revenue fund;

• a study prepared by the Office of Higher Education on the enrollment patterns of students from low-income families in higher education;

• a change in the make-up of the Board of Trustees to include one labor member;

• language that requires the board to report to the Legislature programs that were granted a waiver from the 60 or 120 program credit cap; and

• language that convenes an oral health practitioner work group to develop recommendations and proposed legislation for the education and regulation of oral health practitioners.

You may view the complete bill here.

Contract Ratification Bill

Legislators passed the contract ratification bill mid-April. The bill includes the ratification of the AFSCME, MAPE, MMA, IFO and MSCF contracts and the Minnesota State Colleges and Universities administrator's plan, the commissioner's plan and managerial plan. The contracts were effective the day following the governor’s signature, April 17, 2008.

Pension Bill

Legislators also passed the omnibus retirement bill over the weekend. Included in the bill are modifications to the Minnesota State Colleges and Universities Individual Retirement Account Plan, or IRAP; handling the identification and disposition of abandoned IRAP accounts; and permitting Higher Education Supplemental Retirement Plan distributions to phased retirement program participants. The bill also provides for an actuarial study of the impact on the Teachers Retirement Association of allowing an additional alternative retirement coverage election for Minnesota State Colleges and Universities faculty after attaining tenure or its equivalent. The bill is now awaiting the governor’s signature.

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