Minnesota lawmakers still have major decisions to make before end of session

ST. PAUL -- With just eight days to go until the Minnesota Legislature must adjourn, the Capitol is about to become a humid den of chaotic action.

Lawmakers will debate and trade votes late into the night. Their overworked staffs will scour bill language and spreadsheets until their sight blurs.

Exhausted legislators will vote on bills they - and the public - have little time to comprehend. Minority-party members will filibuster while the majority rushes to pass its agenda.

Mischief makers will try to sneak dubious amendments into bills. Tempers will flare and orators roar. The governor and legislative leaders will huddle behind closed doors to cut what insiders presumptuously call a “global deal” to end the session.

Their decisions will affect every Minnesotan. They will determine the taxes you pay, the quality of your kid’s school, the cost of college tuition, whether your roads are fixed and your water is safe to drink, swim or fish in.

Lawmakers’ main job this year is to pass a two-year state budget, and in keeping with tradition, they have put off all their major tax and spending decisions until the final days of the session.

The House Republican majority and the Senate Democratic-Farmer-Labor majority have passed vastly different budget bills, and they rely on a constitutionally imposed deadline to force them to compromise. This year, they have until May 18.

“It’s frustrating that it always seems to come down to the last minute,” House Ways and Means Committee Chairman Jim Knoblach, R-St. Cloud, said last week. “But one side or the other always thinks that they have something to gain by engaging in brinkmanship, so they do.”

It’s also a matter of fighting for principles, DFL Gov. Mark Dayton said.

“People aren’t willing to compromise strongly held beliefs until they’re absolutely required to do so,” he said.

So will they be able to do it by next Monday?

Dayton put the odds at 50-50.

Legislative leaders are a little more optimistic.

“We’ll get done on time,” House Majority Leader Joyce Peppin, R-Rogers, predicted.

Here’s where they stand heading into the final week: House and Senate negotiators are trying to hammer out tax and spending agreements in nine conference committees.

The “conferees,” as they’re called in Capitol jargon, did some preliminary work last week, but they can’t finish their bills until the leaders of the two houses give each committee spending targets.

House Speaker Kurt Daudt, R-Crown, and Senate Majority Leader Tom Bakk, DFL-Cook, held closed-door meetings last week. By Thursday, they had concurred on a relatively small funding bill for agricultural and environmental programs and were well on their way to settling on funding for public safety and judiciary programs.

Bakk said he and Daudt would set spending targets for small budget bills first so those conference committees can wrap them up and send them to the House and Senate floors for final votes early this week. He added that they also hope to set targets for the remaining big budget bills by Monday. They will run all the numbers past Dayton, who can approve, reject or renegotiate them. Dayton has laid out priorities that are largely, but not completely, reflected in the Senate budget.

The three leaders had an opportunity to talk numbers and catches Saturday, when Daudt and Bakk went fishing with Dayton at the annual Governor’s Fishing Opener on Lake Vermillion, near Bakk’s hometown.

They might need the extra time together. Reaching agreement will be particularly difficult this year, said veteran Senate Finance Committee Chairman Richard Cohen, DFL-St. Paul, because the differences between the House and Senate budget bills are the largest he’s ever seen. The widest split is over funding for health and human services, he said, and there also are significant gaps over taxes, K-12 education, higher education and transportation.

Here’s a look at those key areas, which make up nearly 90 percent of state spending:

Health and human services

The overall gap is enormous: a $1.5 billion difference between how much the Senate wants to spend in the area and the House’s targets.

While the DFL Senate is proposing an increase in spending, House Republicans are proposing major cutbacks from forecast spending.

Republicans say the reductions they back are needed to keep health care costs from devouring cash for other budget priorities. DFLers say the Republican cuts are draconian and unnecessary in a time of budget surplus.

The differences go beyond just overall spending. As part of the planned cutbacks, Republicans have proposed eliminating MinnesotaCare, the state’s health program for the working poor, and replacing it with subsidized private insurance. DFLers say they’ll never agree to that.

The Republican budget also squeezes several hundred million dollars in savings out of HHS programs by targeting waste, fraud and abuse - savings that DFLers believe are wildly inflated.

Taxes

House Republicans and DFL senators are $2 billion apart on how much to cut taxes.

The House passed a bill that would cut taxes by $2.2 billion, or more than the state’s $1.9 billion budget surplus. The Senate offered $268 million in tax relief.

The House bill proposes a mishmash of tax breaks for seniors, veterans, farmers and college students, capped by a limited-time-only $1,000 per person income tax exemption for all tax filers. The Senate version focuses on property tax relief and a new tax credit for businesses that hire unemployed veterans. Dayton proposed a small child care tax credit, and voiced support for other tax breaks but did not include them in his budget proposal.

The chairmen of the House and Senate tax committees, GOP Rep. Greg Davids of Preston and DFL Sen. Rod Skoe of Clearbrook, acknowledged their bills are basically initial bargaining positions. Both were confident they could hammer out a compromise once Dayton, Daudt and Bakk agree on a tax-cut number.

Daudt said that number should be “somewhere in the middle.” By his calculations, that would be just over $1 billion.

Bakk said they don’t have to pass a tax bill this year, and the Senate may not if the House doesn’t agree to a transportation tax increase.

Education

The House and Senate education spending bills are far apart in terms of new spending, but they still share some priorities.

Republicans and DFLers both want to increase access to preschool, give schools more money for general operations and bolster programs that address the state’s achievement gap between poor and minority students and their peers.

The Republican-led House approved $157 million in new spending, the DFL-led Senate passed $365 million in additional funds and Dayton wants $695 million. Minnesota spends more than $16 billion every two years on public schools.

After Dayton, Daudt and Bakk settle on a spending target, the negotiations will focus on the finer points of education funding and policy changes.

Both education committee chairs - Sen. Charles Wiger, DFL-Maplewood, and Rep. Jenifer Loon, R-Eden Prairie - say they want a significant increase in K-12 funding. Parent groups and school lobbyists say they need at least 2 percent per year in per-pupil funding to avoid budget shortfalls.

What’s less clear is the future of some policy proposals. Both parties have debated changing teacher seniority rules, reducing state-mandated testing and updating the teacher licensing process. There’s some agreement over licensing and testing, but changing union rules, a top Republican priority, is unlikely to win majority DFL support.

Higher education

Funding for state colleges and universities is in a similar place. The House approved $57 million in new spending, the Senate passed $205 million and Dayton wants $283 million.

Both Senate and House plans include some higher education spending increases to hold down tuition, but not as much as college officials said they need to maintain a freeze in place since 2013. Dayton called for freezing tuition and investing more in the University of Minnesota medical school.

Transportation

The debate over a new transportation spending plan has been going since the start of the session, and the two sides are no closer on a solution than they were months ago.

Both DFLers and Republicans want billions of dollars more for transportation, but they have major differences about where to find the cash.

Republicans are fiercely opposed to raising taxes, while DFLers say new revenue is essential to avoid cannibalizing other programs. DFLers say more money for urban mass transit is essential, while Republicans see that as a diversion from more pressing road and bridge work.

Negotiators on both sides insist a deal is still possible, with transportation chair Sen. Scott Dibble, DFL-Minneapolis, putting its likelihood at a precise 58 percent.

The Legislature always has the option of pushing a transportation decision down the road another year if a deal can’t be struck, though advocates on both sides are pressing for an urgent solution.

Christopher Magan, David Montgomery and Rachel E. Stassen-Berger contributed to this report.