Expect a battle over a large tax cut next legislative session.
The legislature finally held the special session on Friday, June 12 where they worked out the final details on the new two-year budget and passed the remaining budget bills. It wasn’t easy, though. The session convened at 10 a.m. on Friday and ended around 2 a.m. Saturday morning after a lot of back and forth and even a failed vote on the agricultural environmental bill. Below is an update of some of the high points.
Modest Growth for the Next State Budget!
The next state budget will grow by only 5.2% over the next two years, and that was a major victory for the new House majority and a needed self-correction after the large spending and tax increase that occurred in 2013. The 5.2% increase for the next two-year budget is the third lowest in the last 50 years, according to House majority members! On an annualized basis it is a 2.6% increase, slightly above last year’s CPI of 1.6%. Overall, it was a good result and it shows that divided government does matter, and importantly, a little over $800 million was left in surplus to the state, which could easily grow to about $1.5 billion, according to analysts. This certainly sets the stage for a battle over a large tax cut next year when the House again pushes a significant tax bill that could be resisted by the Senate majority party and Gov. Mark Dayton. Without divided government, it is very likely that the vast majority of the $2 billion surplus would’ve been spent.
Adios to the MPCA Citizen’s Board
Another victory occurred in the agricultural/environmental budget bill when a provision repealing the Minnesota Pollution Control Agency’s controversial citizen’s board was finally agreed to. This provision did pass during the regular session in the Senate due to a coalition of iron range, other rural majority party senators and a united minority caucus but was vetoed by Gov. Dayton. In the special session, thanks to the efforts of Rep. Denny McNamara (Hastings), Sen. David Tomassoni (Chisholm) and House and Senate leaders Daudt and Bakk, this provision was reinserted into the budget bill, became a sticking point where the Senate had to vote on the measure twice, but finally passed.
This left-tilted board had a unique authority and overruled an already biased staff in many cases, making the performance of the MPCA even worse! Two small business owners have won large attorney fee awards against the agency when they prevailed in cases that were very threatening to their business under the NFIB-pushed Equal Access to Justice Law.
Another provision in the omnibus jobs and energy bill proposes to lessen the subsidy that large energy users such as iron mines and paper mills are forced to pay to other consumers through higher rates on their electrical utility bills. The Minnesota Public Utilities Commission has forced these large users to subsidize residential customers for years. The measure proposes to lessen the subsidy but would require final approval by the Public Utilities Commission. Most of these large users are on the iron rage and are customers of Minnesota Power. Finally, another provision would allow utilities to assess a fee to customers who generate their own solar or wind power. Currently these customers have access to the power grid but contribute little or nothing through their electric bills.
Sincerely,
Mike Hickey
NFIB Minnesota state director
