Capitol Update #14April 8, 2011

Budget Bills Move off Senate Floor

With passage of the Tax Bill this week, Senate Republicans now have passed all of their budgetproposals off the Senate Floor. The bills will now be heading to conference committees to benegotiated with House proposals. Governor Mark Dayton has said he will not weigh in untildifferences in the bills are negotiated between legislative bodies.

Tax Omnibus Bill

The Senate Omnibus Tax Bill passed off the floor mid-week. One provision that benefits our community is elimination of the Market Value Credit and a consequent infusion of funds into theproperty tax circuit breaker program which protects those living on fixed incomes, especiallyseniors, from unmanageable increases in property taxes. I thank those on the committee for making this change. Previously, the State had not funded this program and so the city levied for it. This change should result in reduced property taxes. Other provisions included in the bill are:

$641 million in aid cuts to cities, counties, and townships.

Renter’s property tax refund computation is reduced from 19% to 15%.

Sustainable Forest Incentive Act repeal.

Political Contribution Refund program repeal.

Phase-out of the statewide business property tax.

MN/WI tax reciprocity study.One provision included in the bill would provide a tuition tax credit for parents who send their children to private/religious schools, costing around $11 million. An amendment to delete the taxcredit language and put the $11 million onto the state’s general education funding formula wasintroduced by Sen. Katie Sieben, who said that with public schools facing serious budget crises,now was not the time to divert public money to private schools. Minnesota currently provides atax credit for various education expenses, but not private school tuition. I supported theamendment but it failed on a mainly party line vote.I am concerned that the budget proposal that has been put forward completely eliminates budgetreserves – the “rainy day account” that exists for emergency situations. The Cash Flow Account,which state statute permits to balance around $350 million, is whittled down to just $50 million,leaving little money with which to pay day-to-day bills. When the state can’t pay bills, it is forcedto borrow from school districts or businesses – something that has happened more than onceduring the past two yearsThe bill is now headed to Conference Committee.

Transportation Omnibus Bill

The Senate Transportation Budget Bill also passed off the floor on Monday. Metro Transit isproposed to bear a cut of roughly one-fourth of their budget, or $32 million. The Met Council haswarned such a major funding cut would force them to reduce services, cut routes, and raise fareson Metro Transit buses, Metro Mobility, and transit lines. The Senate bill had eliminated theCommuter and Passenger Rail Office. This would have made it more difficult for the office tocoordinate federal dollars and the development of intercity rail service. We were able tosuccessfully amend the bill so that the office was maintained. In addition, budget reserves for suburban opt-out transit providers were used to provide funding for rural transit. This “taking” of local units of governments’ reserves is something I strongly oppose.

It was a special day on Wednesday as Women Senators gathered for a shower to celebrate the birth of Claire AnnBenson, daughter of Senator Michelle Benson (R-Ham Lake).

Surly Brewing Legislation Passes Senate Commerce Committee

Legislation to issue brewer taproom licenses to local beer brewers for the sale of their own beer attheir brewing facility passed the Senate Commerce Committee on Wednesday. Supporters saythis is common sense legislation that will allow small businesses to prosper.Many local brewers in Minnesota are ready to grow their business, but state law can complicatethese efforts. Surly Brewing Company of Brooklyn Center has recently proposed a $20 million“destination brewery” consisting of a restaurant, taproom, and tours of the production line. Surlyanticipates that a new brewery will create approximately 150 jobs within the company, as well as85 construction jobs.The Surly bill will allow all Minnesota breweries to sell their own product (and only their ownproduct) on the site of their brewery for on-site consumption. Breweries producing more than3,500 barrels per year are currently prevented from on-sale distribution. Under the new law, on-site sales would still not be allowed for brewers making over 250,000 barrels a year. I supportedthe bill and it passed the Senate Commerce Committee on Wednesday. The Minnesota LicensedBeverage Association has expressed concern that this legislation disrupts the three-tiered systemof manufacturing, distributing, and retailing. They were pleased that many of their concerns wereaddressed in the final bill.