by Beth Bily
Bonding, business-to-business taxes and minimum wage will likely dominate discussion when the Legislature reconvenes Feb. 25.
State Sen. Tom Saxhaug, DFL – Grand Rapids, Rep. Tom Anzelc, DFL – Balsam and Rep. John Persell, DFL – Bemidji, met with Grand Rapids Area Chamber of Commerce members last week during the chamber’s “Eggs and Issues” breakfast. The local lawmakers discussed the upcoming session and issues that will drive the legislative process this year.
Politics likely will take center stage, said Saxhaug.
“The governor and the House are up for re-election, while the Senate is not. We’re likely to see that reflected in the session,” he said.
Anzelc reported to chamber members that while last year’s session netted significant funding gains for the state’s E-12 schools, the improved financial outlook had its down side.
“The move and drive toward district sharing and consolidation has hit a bump in the road,” he said.
In total, lawmakers last year approved $485 million in new E-12 spending for the biennium. Notable changes included a funding formula increase of 1.5 percent in each of the next two fiscal years and funding for voluntary all day kindergarten beginning in fiscal year 2015. Lawmakers also gave local school boards the ability to implement levies without voter approval.
The repayment schedule to the state’s schools was accelerated last year as well. The state covered past budget shortfalls through E-12 funding shifts. Anzelc called repayment “the first order of business.”
The repeal of three business-to-business taxes on services is likely to garner attention from lawmakers this session. During the 2013 session, sales taxes were extended to include the repairs of business equipment and machines, purchases of telecommunications equipment by telecommunications providers and warehouse and storage services.
The first two taxes went into effect July 1 while the warehouse tax, which would impact some commodities moving through Minnesota ports, won’t take effect until April. Agricultural products were exempted.
In December, state figures projected a budget surplus of $1.08 billion, heightening the call from business groups, such as the Minnesota Chamber of Commerce, for lawmakers to repeal the taxes. Both Gov. Mark Dayton and legislators on both sides of the aisle have expressed support for repeal.
This year’s bonding bill could be the biggest order of business during the upcoming short session.
“The bonding bill is a big focus if not the focus of this session,” said Persell. “We’ve got a lot of (needed) projects around the state.”
Dayton released his recommendations for the bill, a $986 million package, earlier this month. Missing from the governor’s proposal was a $3.9 million request for renovations at the Myles Reif Performing Arts Center. A final bonding bill, however, will be subject to review by both legislative houses.
Dayton’s proposal included state borrowing proceeds for a number of local projects including:
• $4.9 million to build a new event center to replace the existing chalet at Giants Ridge
• $5 million to the Chisholm/Hibbing Airport Authority to demolish the existing terminal and to construct a new passenger terminal and boarding bridge, and associated equipment at the Range Regional Airport;
• $1.5 million for a grant to the city of Virginia for extending infrastructure and improving the storm water system at the Northern Heights Industrial Park;
• $3.344 million for the Northeast Higher Education District to design, renovate, furnish, and equip space to meet various workforce training needs. This project impacts 18 classroom/lab spaces on the Itasca, Hibbing, Rainy River and Vermilion campuses. In addition to the renovations, obsolete space will be demolished on the Hibbing campus.
The governor said his proposal would create 27,000 jobs.
Battle lines have already been drawn in the effort to raise the state’s minimum wage. Minnesota’s minimum is well below the federal threshold of $7.25. Here, large employers are subject to a wage of $6.15 per hour, while minimum wage for small employers is $5.25. Businesses engaged in interstate commerce, however, are held to the higher federal standard.
Groups such as the Twin Cities-based interfaith group, Joint Religious Legislative Coalition, are calling for the state wage to be raised to $9.50 by 2015.
While raising minimum wage to $9.50 might have traction in the House, some Senate members have expressed hesitation and suggested a smaller increase to around $8 per hour.
Anzelc has already proposed offering Senate members political cover by taking the issue directly to voters through a constitutional amendment, which would raise the state wage to $10 per hour and tie future increases to the inflation index.