Friday, April 1, 2011

Higher ed bills move; Cuts proposed to state government; Compromise speculation; U.S. Congress to look at spending bills

Legislative Update
April 1, 2011

Higher education bill heads to conference committee

Both the House and Senate took up the respective higher education omnibus bills on the floor this week. In the Senate, Higher Education Chair Michelle Fischbach, R-Paynesville, explained SF 924 to members. She said there is a 10.3 percent reduction for the Minnesota State Colleges and Universities system, with cuts to the central office and campuses. Sen. Larry Pogemiller, DFL-Minneapolis, offered an amendment that implements Gov. Dayton's higher education proposal of a 6 percent cut to higher education. In order to pay for the increase in funding, Pogemiller is proposing a new fourth tier on the income tax that affects 2.3 percent of all tax filers. Pogemiller said the budget is about priorities this year, and higher education is a priority. After much discussion about the germaneness of the bill (raising an income tax in the higher education bill), the amendment was not adopted.

Sen. Sandy Pappas, DFL-St. Paul, offered an amendment to repeal the language in the funding policy statute 135A.01, that states it is the intent of the Legislature to provide at least 67 percent of the revenue to public postsecondary institutions in state appropriation. Members spoke that even in times of budget reductions it is still the intent of the Legislature to support high quality public postsecondary education. The amendment failed unanimously.

Minority Leader Tom Bakk, DFL-Cook, said lawmakers are jeopardizing the future of higher education campuses with the cuts in the bill. In response, Chair Fischbach said the committee was able to put a little more money into the state grant program for students, and make reductions that will not cut so deep. After much discussion on the bill, the Senate higher education finance omnibus bill was approved by a vote of 37-27.

The House also took up their version of the higher education finance omnibus bill, HF 1101. Higher Education Policy and Finance Committee Chair Bud Nornes, R-Fergus Falls, explained the bill and said making the reductions in the bill were not easy, but he believes it's a better alternative than Gov. Dayton's bill that increases taxes. Nornes said the goal for this bill was to make sure students do not bear the brunt of the reductions. He also said the Minnesota State Colleges and Universities system and the University of Minnesota are expected to make up one-third of the lost revenue through tuition increases. Also in his remarks, Chair Nornes recognized Chancellor Jim McCormick and President Bob Bruininks in their retirement this year and thanked them for their leadership to the state of Minnesota.

Three amendments were adopted on the House floor and incorporated into the bill. The first was a provision introduced by Rep. King Banaian, R-St. Cloud, which prohibits the use of state or federal funds to support human cloning, or to pay for any expenses incidental to human cloning. The Senate version of the bill also carries this provision.

Rep. Gene Pelowski, DFL-Winona, introduced the other two amendments that passed. The first amendment sets the salary for the chancellor, vice chancellors and presidents at or below the governor's salary of $120,000; and prohibits the chancellor, vice chancellor and president contracts from providing a bonus payment. The amendment passed by a vote of 89-38. The other amendment authored by Rep. Pelowski, which passed by a voice vote, requires the Board of Trustees to do a comprehensive evaluation of the structure of the system and report to the Legislature with recommendations for improvements to increase the efficiency and effectiveness of delivering postsecondary education.

The full House approved the bill as amended by a vote of 69-60. The next step in the process is conference committee, where the House and Senate will meet to work through the differences between the two bills. We can expect higher education conferees to be announced soon.

Legislative leaders propose deep cuts to state government

The Senate passed the state government finance bill, SF 1047, on the floor this week by a vote of 36-29. The bill, authored by Sen. Mike Parry, R-Waseca, reduces projected spending in state government by 59 percent. Part of that reduction includes a provision that freezes the salaries of state employees for the 2012-2013 biennium, as well as a provision that moves government workers into a high deductible health care program to save costs. Republicans have said the reductions in the bill are painful, but necessary and include innovations that will make state government more efficient and affordable, but Democrats are calling the bill an attack on public employees.

Other provisions in the bill related to the Minnesota State Colleges and Universities system include a one-time appropriation of $1.5 million each year of the biennium for the National Guard tuition reimbursement program. The bill also appropriates $945,000 each year of the biennium for the higher education veterans assistance program. The bill repeals the expiration of these veteran centers on higher education campuses, allowing them to continue operating and serving veteran students. Also included in the bill is a provision on zero-based budgeting that requires the Minnesota State Colleges and Universities system’s biennial budget proposal for the biennium beginning July 1, 2013 be prepared according to the zero-based budgeting principles.

The House bill, scheduled to be heard in the Ways and Means committee Monday, is similar to the Senate bill, but does include some significant differences. The House bill includes an appropriation of $100,000 each year of the biennium for the Minnesota GI Bill program. The bill includes the repealer of the expiration of veteran centers on higher education campuses, as the Senate bill does; however, it does not appropriate the funding the Senate bill does to operate the programs. The House bill includes language that requires the system to carry out is duties in the most cost-effective manner possible. The bill includes the zero-based budgeting language that is in the Senate bill, as well as the provision that freezes the salaries of state employees. The salary freeze language in the House however exempts Minnesota State Colleges and Universities faculty and administrators from the freeze. There is also language in the House bill that requires the commissioner of Minnesota Management and Budget to establish a program to provide one-time bonus compensation to state employees for efforts made to reduce the costs of operating state government.

Once the House passes their version of the bill next week, a conference committee will be formed to work through the differences. From there, the bill will go to the governor's desk for signature or veto. Gov. Dayton has said he does not want to make the same large reductions to state government that currently are in both bills.

Capitol watchers have an eye on the end game

Many people are wondering how this session will end given the philosophical differences between Gov. Dayton and the Legislature on how to resolve the $5 billion deficit. This week Dayton sent a letter to Senate Majority Leader Amy Koch, R-Buffalo and House Speaker Kurt Zellers, R-Maple Grove, which lays out a framework for the budget negotiations based on mutual discussion. Dayton wrote, "I will not agree to any bills containing revenue increases, reductions, or expenditures, until after the Legislature has established and decided upon one complete, comprehensive and balanced budget for the 2012-2013 biennium, either through the passage of all relevant conference reports or some other definitive mechanism. I will not favorably consider a single budget bill without knowing its relationship to a complete and balanced budget solution."

Dayton also wrote that he invites lawmakers to initiate a process of removing all non-related policy items from the spending and tax bills, and referenced Gov. Pawlenty being opposed to the practice of including policy in finance bills and said he agrees with that position. Rep. Pat Garofalo, R-Farmington, said getting policy items in legislation early, lends itself to a thoughtful, reasonable conversation with the Dayton administration, and gets the public involved. Politics in Minnesota posts the complete letter here.

The House and Senate have passed the majority of the spending bills, and legislative leaders have said they intend to have all the bills off the floor by the middle of next week. Once conference committees are formed and produce a final bill, Dayton is requesting legislators pass the conference committee reports for all the appropriation bills and then lay them on the table in order to begin negotiations and reach a budget agreement. Legislative leaders have responded that they have put together an open process in which legislation can be signed by the governor.

Koch said she would ask the governor to come and help lawmakers instead of standing back and criticizing, and indicated she would like to work with the governor in the conference committee process. She said, “Working with the governor, we could have a really good April.” Zellers indicated that some of the finance bills could get wrapped up in conference committee pretty quickly. Senate Deputy Majority Leader Geoff Michel, R-Edina, said legislative leaders are looking at calendars and deadlines and believe they are a month ahead of schedule. Zellers said it’s easy to raise revenue, but the hard work is to do meaningful reform. In reference to prior legislative sessions, Zellers said, “What we’ve been doing isn’t working.”

The traditional Easter/Passover legislative break, scheduled to begin April 18, is only two weeks away. Once lawmakers return from recess, they will have four weeks to negotiate a budget prior to the adjournment date of May 23.

One week remains for Congress to pass a 2011 spending bill

Approximately two weeks ago, Congress passed another continuing resolution that would allow the federal government to operate at fiscal year 2010 levels while attempting to pass a fiscal year 2011 appropriations bill. The federal government has been operating at 2010 spending levels for six months while negotiations continue. Vice President Joe Biden said earlier this week that the Republican House, the Democratic Senate and the White House were making what he defined as good progress on a budget deal. A deal needs to be reached by next Friday, April 8 in order to avoid a government shutdown. Congressional negotiators have tentatively reached a deal that makes $33 billion in spending cuts; however, details have yet to be revealed.

This latest round of negotiations falls short of the $61 billion cuts included in the House approved bill, and many conservative Republicans are holding strong to that cut. Tea Party activists from all over the country rallied at the U.S. Capitol this week with the intent to pressure Republican leadership to stick to the larger cut. Rep. Michele Bachmann of Minnesota’s sixth congressional district told the crowd, “Don’t back down, and I know you won’t!” Bachmann said, “We will stand for cutting the size of government, we won’t change our principles.” House Speaker John Boehner, R-Ohio, said he was happy to see people engaged in the process but said House Republicans control only “one-half of one-third of the government here in Washington, we can’t impose our will on another body, we can’t impose our will on the Senate.”

Student leader speaks at U.S. Capitol about the importance of Pell Grants

David Corgan, a student at Anoka Ramsey Community College and student leader with the Minnesota State College Student Association, was invited to participate with congressional members at the U.S. Capitol in the celebration of the federal student aid bill passed last year. Corgan shared his story about why Pell Grant funding is important to him and why it should continue to be funded. You can read about Corgan’s story at the MSCSA Web site here. You can also read more about Corgan in the recent article, “Pell Grants Face Cuts, Possible Overhaul” in The Chronicle of Higher Education here.

Here's What's Happening at the Capitol:

This schedule shows all meetings that we are aware of at the time of publication that MAY have an impact on the system. This schedule may change. Please watch the House and Senate schedules posted on the Legislature's web site.

Monday, April 4

10:00 AM
Senate in Session

3:00 PM
House in Session

4:00 PM (or call of the chair)
House Ways and Means
Room: 200 State Office Building
Chair: Rep. Mary Liz Holberg
HF 927: Health and Human Services Omnibus Bill
HF 577: State Government Omnibus Bill
HF 8 (Gottwalt) Healthy Minnesota contribution program established, and plan required to redesign service delivery for lower-income Minnesota Care enrollees, and Minnesota Comprehensive Health Association required to offer a high-deductible, basic plan.

Thursday, April 7

8:15 AM
House State Government Finance
Room: 200 State Office Building
Chair: Rep. Morrie Lanning
Agenda: HF210 (Kiffmeyer) Voter picture identification required before receiving a ballot, identification cards provided at no charge, provisional ballot procedures established, election administration procedures specified, electronic polling place required, recount procedures enacted, and money appropriated.

Friday, April 8

12:00 PM
Legislative Commission on Pensions and Retirement
Room 10 State Office Building
Agenda: Organizational Meeting
Election of 2011-2012 Commission Officers:

2:30 PM
Joint Meeting: Environment and Natural Resources and Capital Investment
Room: Moorhead City Hall
Chairs: Sen. Bill Ingebrigtsen, Sen. David H. Senjem
Agenda: 2011 Red River Valley Flood Update and Impact

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