Ewald at the Capitol

Session Week Five

This week was marked by the unveiling of the February 2022 Budget and Economic Forecast. Legislators will use this forecast to guide fiscal decisions for the 2022 session. Debate over how to spend the $9.25 billion surplus is expected to pick up in the coming weeks. The number of committee meetings this week decreased slightly from last week’s 93, down to 88; a total of 560 bills have been introduced. In addition to the usual Tuesday and Thursday floor sessions, the Senate convened on Wednesday at noon to process bills to be referred to their next committee.

February 2022 Budget & Economic Forecast Released

On Monday, Feb. 28, the Office of Minnesota Management and Budget unveiled the February 2022 Budget and Economic Forecast. The general fund surplus has increased to $9.25 billion, up from the $7.7 billion projected in December. While the projection is for the 2022-23 biennium, the state should still be at a surplus for 2024-2025. The legislature will rely on this updated projection to guide their fiscal decisions for the rest of the 2022 session. It’s important that legislators approach this projection with caution, as shifts in the U.S. economy and geopolitical conflict in Ukraine could still impact the general fund for the 2022-2023 biennium. In addition, much of the $1.15 billion projected in the February forecast is considered as one-time money.

Contributions to the surplus:

Higher than expected income tax collection
Increased consumer spending and sales tax collections
Increased corporate profits
Decreases in spending in E-12 education (down $158 million), less than predicted in November forecast
Decreases in health and human services spending (down $108 million), less than predicted in November forecast

What to do with the surplus:

Gov. Walz wants to triple his one-time rebate “Walz Checks” to $500 for singles and $1,000 for couples, said he is open to tax cuts
Republicans want to pass permanent ongoing tax cuts
Democrats want bigger bonuses for frontline workers

Senate Moves Bills to Dedicate Auto Parts Sales Tax to Transportation

The Senate is advancing two bills to increase the proportion of sales tax revenue to transportation projects. Currently, only a portion of sales tax revenue from auto repair and auto part sales goes to transportation projects. These two bills will divert 100 percent of these sales tax revenues to road and bridge repair and upkeep.

SF 3081, authored by Senate Transportation Chair Scott Newman (R–Hutchinson) will use sales tax revenue from auto repair and part sales to raise an additional $314 million for road investment projects in 2023. SF 3086, authored by Sen. Jeff Howe (R–Rockville) also diverts all of auto parts and repair sales tax to roads, but focuses on road development in small towns and cities. Both the bills passed the Senate Tax Committee on Tuesday and have advanced to the Senate Finance Committee.

Group Home Closures in Senate Human Services

Group home closures in Minnesota have reached crisis levels. In the fourth quarter of 2021, homes closed at record rates. In Rochester, TV and newspaper covered a story of closures; WCCO4 also had a story this week on the issue. The emergency has been brought on by staff shortages due to a combination of staff burnout and the availability of better paying jobs. On Tuesday, Michelle Priggen, CEO of Cardinal Minnesota, a group home operator, testified in front of the Senate Human Services Reform Finance and Policy committee. She provided an update on the dire situation, including the recent closure of 10 group homes in the Rochester area. Last week, Sen. Jim Abeler (R–Anoka) passed a temporary funding package to the Finance committee. The House has yet to act regarding the emergency.

Education Bills in House and Senate

Minnesota Senate Republicans have passed a key piece of their “Parents Bill of Rights” education proposal. SF 2575, sponsored by Sen. Paul Gazelka (R–East Gull Lake) passed on a vote of 36-30 during the Thursday floor session. It focuses on curriculum transparency, requiring schools to notify parents that all instruction materials are available to parents and parents can chose reasonable accommodation for alternative instruction if a parent objects to instruction materials. SF 2729, sponsored by Sen. Roger Chamberlain (R–Lino Lakes) also was voted on during Thursday’s floor session. The bill would mean that parents do not have to reveal their home address information at school board meetings for charter and public schools. Sen. Lindsey Port (DFL–Burnsville) introduced an amendment that would still allow school boards to ask for the city where parents reside. The bill as amended passed unanimously.

The Minnesota House Education Finance Committee has laid over an education bill for possible omnibus inclusion. HF 2949, sponsored by Rep. Sandra Feist (DFL–New Brighton) would increase school funding by linking the general education basic formula allowance to inflation. The per-pupil allowance was already set by the 2021 legislature for the 2021-2022 and 2022-2023 school years. The current per-pupil spending is set at $6,863 for the 2022-2023 school year; if the bill passes, the per-pupil spending would equal that allowance times the 2024 inflationary increase. The companion bill (SF 3194) is waiting on action from the Senate Education Finance and Policy Committee.

Retirements
So far, 30 legislators in the Minnesota House and Senate have announced they will not run for re-election in 2022. Notably, Senate Minority leader Melisa Lopez Franzen (DFL–Edina) has announced her retirement. Senate President David Osmek (R–Mound) has reversed his plan to retire and is now seeking SD 17, a seat opened by Sen. Scott Newman’s retirement. Several other legislators have decided to run for the opposite body, or for a different elected office. Here is the updated list of retirements as of Thursday, March 3, though we expect more to come in the following weeks.

House Retirements

Shelly Christensen (DFL–39B)
Jim Davnie (DFL–63A)
Bob Dettmer (R–39A)
Sondra Erickson (R–15A)
Rod Hamilton (R–22B)
Alice Hausman (DFL–66A)
Todd Lippert (DFL–20B)
Dale Lueck (R–10B)
Carlos Mariani (DFL–65B)
Paul Marquart (DFL–4B)
Tim Miller (R–17A)
Jeremy Munson (R–23B)
Steve Sandell (DFL–53B)
Jen Schultz (DFL–7A)
Mike Sundin (DFL–11A)
Ami Wazlawik (DFL–38B)

Senate Retirements

Melisa Lopez Franzen (DFL–49)
Greg Clausen (DFL–57)
Chris Eaton (DFL–40)
Michael Goggin (R–21)
Bill G. Ingebrigtsen (R–8)
Susan Kent (DFL–8)
Mary Kiffmeyer (R–30)
Scott Newman (R–18)
Jerry Newton (DFL–37)
John Poston (R–9A)
Julie Rosen (R–23)
David Tomassoni (I–6)
Patricia Torres Ray (DFL–63)
Chuck Wiger (DFL–43)

House members running for the Senate

Steve Green (R–2B) running for SD 2
Cal Bahr (R–31B) running for SD 31
Steve Drazkowski (R–21B) running for SD 21
Barb Haley (R–21A) running for SD 21
Tony Jurgens (R–54B) running SD 54
Eric Lucero (R–30B) running for SD 30
Kelly Morrison (DFL–33B) running for SD 33
Jordan Rasmusson (R–8A) running for SD 8
Tou Xiong (DFL–53A) running for SD 53
Andrew Carlson (DFL–50B) running for SD 50
Tama Theis (R–14) running for SD 14

House members running for other positions:

Rena Moran (DFL–65A) intends to run for Ramsey County Commissioner
Jeremy Munson (R–23B) intends to run for First U.S. Congressional District
Ryan Winkler (DFL–46A) intends to run for Hennepin County Attorney

Senators running for other positions:

Michelle Benson (R–31) intends to run for Governor
Karla Bigham (DFL–54) intends to run for Washington County Commissioner
Paul Gazelka (R–9) intends to run for Governor

Senate members running for the House

Jerry Newton (DFL–37) running for House seat 35B

Dates to Remember

Friday, March 25 — Committees must act favorably on bills in the house of origin.
Friday, April 1 — Committees must act favorably on bills, or companions of bills, that met the first deadline in the other body.
Friday, April 8 — Committees must act favorably on major appropriation and finance bills.
Friday, April 8–Monday, April 18 — Easter/Passover/Spring Break for legislature.
May 23 — Legislature must complete its work.

Resources

They Said It...

“Minnesota's record-setting surplus gives us more than enough resources for permanent and meaningful tax relief for Minnesotans — including an end to the Social Security tax and replenishing the unemployment trust fund. There's never been a better time to give Minnesotans their money back as they struggle with record inflation, soaring energy bills, and rising gas prices.” – House Minority Leader Kurt Daudt (R-Crown) on what to do with the surplus

“Today’s forecast shows that Minnesota’s economy is doing well, at least at the surface level, with corporate profits continuing to wildly outpace expectations. Now it’s our job to address the challenges that people are facing and ensure that workers and families are benefiting from the economic growth they are helping create. The last two years have been incredibly challenging for so many, and there is significant uncertainty ahead, but we have an opportunity now to truly deliver help for Minnesotans.” – House Speaker Melissa Hortman (DFL-Brooklyn Park)

“This is a good position for Minnesota to be in. This gives us an opportunity to get those checks in the hands of folks right now. …We’re in a place where two priorities, the unemployment insurance trust fund and the hero pay [for frontline workers], are possible to do now. …There’s uncertainty, yes, but we’re in a solid position.” – Gov. Tim Walz at the February Forecast press briefing