Tuesday, May 11, 2010

Budget balancing continues; Proposal sent to governor

Yesterday at the Capitol

Yesterday the Senate and House voted on a budget balancing bill to resolve the $3 billion deficit that legislative leaders said meets 80 percent of the governor's recommendation, but doesn't compromise Minnesota's most important priorities that includes kids, families and communities. The House passed the bill 71-63 and then the Senate passed the bill by a close vote of 34-33. The bill is headed to the governor who is expected to veto it due to included tax increases.

In a press conference yesterday, Sen. Richard Cohen, DFL-St. Paul, said that leadership tried to budget smartly by making sure there are contingencies if the expected federal funds do not come through, however he indicated they are fairly confident they will.

Related to higher education, the bill cuts the Minnesota State Colleges and Universities system and the University of Minnesota the same $50 million that the governor unalloted last year. So the bottom line remains the same. House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said a big priority was making sure higher education institutions are able to have students get the funding that they need. The bill includes an additional $36 million appropriated for financial aid if the federal medical assistance percentages extension is approved.

The bill raises $433 million in revenue by increasing the 4th tier on the income tax for joint married filers making $200,000 or more. The current rate is at 7.85 percent, the new rate in the bill would be 9.15 percent. Sen. Tom Bakk, DFL-Cook, and chairman of the Tax committee said there is a trigger mechanism in the bill that is based on the 2013 February economic forecast. If the state has a surplus of $500 million at the end of tax year 2013, the rate will come back down to 7.85 percent automatically. The bill also accelerates the expiration of the Bush tax cuts by one year.

House Majority Leader Tony Sertich, DFL-Chisholm, said this current deficit goes beyond the question of raising taxes and said it is a complex problem that needs a solution that works for everyone.

Senate Minority Leader David Senjem, R-Rochester, said the bill is "headed straight to veto land, the quicker the better."

Rep. Tom Emmer, R-Delano, said there is nothing bold in this proposal at all. He said it is disappointing that there is nothing in the bill that represents the people, but rather it just protects government.

The bill can be found here.

The spreadsheet for the bill can be found here.

Today at the Capitol

8:30 AM
Senate Finance
Room: TBA
Chair: Sen. Richard Cohen
Agenda: SF 3409 (Cohen) Cash flow forecast by Minnesota management and budget (MMB) commissioner to the governor and legislature requirement.
SF 2566 (Cohen) Executive branch unallotment authority modification.

10:00 AM
House in Session

11:00 AM
Senate in Session

12:30 PM *Note room change*
Senate Higher Education Budget and Policy Division
Room: 107 Capitol
Chair: Sen. Sandra L. Pappas
University District Alliance report
HEFA confirmations

Time TBA
House Ways and Means
Room: 5 State Office Building
Chair: Rep. Loren Solberg
HF2754 (winkler) Secretary of state filings regulated.
HF2922 (Thissen) Minneapolis Employees Retirement Fund; administrative functions transferred to the Public Employees Retirement Association, consolidation account created within the Public Employees Retirement Association, and money appropriated.
SF3134 (Kahn) State government programs or activities money appropriated or reduced, and provisions changed relating to expenses of governor-elect, income earned by the permanent school fund, lease-purchase agreements, general services, resource recovery, payment of aids and credits to school districts, tax return preparers, and implied consent.

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