Dear Friends and Neighbors,
First of all, let me congratulate all our area high school graduates! It’s an exciting time in their lives and I wish all of them the best as they begin new adventures, start new jobs, and enter post-secondary education.
Last week I recapped the recently adjourned legislative session, including highs and lows of the state budget that has now been signed into law by the governor. This week I want to fill you in on some more specific funding and policy details for each area of state government.
Minnesota’s new, two-year budget totals $48 billion, which represents a 6% spending increase. Despite a few concerning components I believe people in our area and around Minnesota will benefit from the new budget.
Below is a list of each major spending area and notable spending or policies in each bill. Like I discussed last week, there are both highs and lows for many of these areas.
Transportation
The transportation bill’s highlight is that it doesn’t contain any of the transportation tax increases proposed this year. There will be no 70% gas tax hike, no vehicle sales tax increase, and no license tab fee increases. In order to fund transportation, auto parts sales tax revenue the state is already collecting will continue being dedicated to roads and bridges, providing around $700 million to fund transportation infrastructure.
In addition, Minnesota’s mismanaged vehicle and licensing registration system (MNLARS) is being scrapped, with new software being implemented in the next two years. It’s incredibly disappointing that Minnesota wasted $90 million on this failed system, but I commend the governor for heeding the legislature’s repeated call to seek a private vendor.
Finally, the transportation bill names the new Highway 63 bridge in Red Wing the “Eisenhower Bridge of Valor” in honor of all veterans and first responders – past, present and future.
Taxes
The tax bill provides Minnesota’s first income tax rate cut in 20 years. It lowers the second-tier rate from 7.05% to 6.8%, allowing most Minnesotans to keep more of their hard-earned money. It also brings Minnesota into conformity with the federal tax code, expands social security tax reductions, and increases the school building agriculture credit from 40% to 70%. This is a really important step forward to relieve pressure off of our area farmers when school districts are voting on referendums.
The tax bill also seeks to address farm equipment depreciation by conforming to the expensing amount of Section 179, which allows farmers buying equipment to deduct the cost of the property. However, I’m very disappointed that instead of being allowed to deduct the entire equipment purchase in the first year, it must be deducted over a span of 5 years under this bill.
Health and Human Services
Most disappointing in this area is the continuation of the sick tax, which will raise the cost of Minnesotans’ healthcare, make every visit to the doctor more expensive, and disproportionately hurt those who require the most medical treatment. The sick tax was set to expire at the end of 2019, and I believe not allowing that to happen was a major missed opportunity.
I also don’t think the legislature did enough to address fraud, waste, and abuse in Minnesota’s public programs, especially our childcare assistance program. Similarly, this bill failed to do enough to combat high insurance rates in southeastern Minnesota. I’ve authored a number of bills on this topic and, when we return next session, I’ll continue fighting to make health insurance more affordable in our area.
On the other hand, I’m pleased to report we passed comprehensive legislation to address the opioid crisis, we instituted licensing rules and safeguards to protect seniors who live in assisted living facilities, and we stopped a proposal to cut $68 million from nursing homes. The latter would have devastated nursing facilities’ budgets and harmed care for aging Minnesotans.
Education
Public schools will receive a per-pupil funding increase of two percent in each of the next two years. The legislature also approved $90 million to help cover the rising costs of special education and provided districts with funding for safety enhancements (the school safety funding is the bill I authored last session that got caught in the Governor’s veto on a larger bill). In addition, the education bill doesn’t include any of the highly-controversial policies for inappropriate sex education curriculum or the provision to allow domestic abusers in the classroom.
The most disappointing piece of this education budget is that it actually increases the disparity between metro and rural per-pupil funding.
Public Safety
In regards to public safety, the legislature provided funding for public safety and judiciary programs and scrapped the highly-controversial policy proposals that received attention at the Capitol this year. The bill increases funding for key priorities such as Guardians Ad Litem, drug courts, and additional prison guards.
The legislature also did a substantial amount of work throughout the committee process to address sexual assault and prosecute crimes against women, but unfortunately none of these important measures were included in the final bill.
Jobs & Energy
The jobs and energy bill contained a number of grants to help spur economic development and promote job training around the state. Among them are the Youth Skills Training grants that I championed, which continue to benefit students in our area. This bill also contains an additional $40 million for critical broadband development and expansion in rural Minnesota communities.
Higher Education
The higher education bill provides operational funding for the University of Minnesota and Minnesota State College system. Two key measures I’ve authored – funding for student loan debt counseling and workforce development scholarships – were included in this package. I’m proud to advocate for the Minnesota State College system and the students who receive educational and career opportunities in high-demand fields through these scholarships.
Housing
Regarding housing legislation, we funded programs to address homelessness as well as the Challenge Program, which provides loans to develop workforce housing. That aside, this legislation fails to address the need for cost-effective workforce housing and was a missed opportunity in terms of addressing mandates and building restrictions, which are major contributors to rising housing costs.
Agriculture
In the agriculture bill, the legislature funded rural mental health grants for farmers, testing for chronic waste disease in deer, and a noxious weed grant program. We also passed important funding to assist our dairy farmers.
Legacy
The Legacy fund allocates sales-tax revenue generated by Minnesota’s Clean Water, Land, and Legacy Amendment, which was added to Minnesota’s Constitution after receiving voter approval in 2008. The proceeds from this constitutionally-dedicated fund must be used for clean water, parks and trails, and arts/cultural heritage projects.
This year’s bill provides significant funding for key clean water projects managed by local Soil and Water Conservation Districts. For our area, the bill includes a large grant for the Lake Pepin Legacy Alliance’s ongoing work protecting and restoring Lake Pepin.
Enjoy summer!
I hope you found this summary helpful. Summer is finally here and the weather this week has been fantastic. I hope you all take time to enjoy the outdoors, celebrate life’s milestones like graduations and anniversaries, and spend time with family and friends.
Staying in Touch
As always, if you have questions or concerns regarding any issue, please contact me. You can reach me at rep.barb.haley@house.mn or 651-296-8635.
Sincerely,
