The 2015 Legislative Session: the Good, the Bad & the Ugly

The good news: the Minnesota legislature adjourned on Monday, May 18th and accomplished a great deal of bi-partisan reform. This is a major accomplishment for first-term Speaker of the House Kurt Daudt since Republicans who control the House occupy only one-third of state government.

The bad news: Governor Dayton apparently doesn’t understand the nature of compromise and vetoed three of the bills that passed the legislature with bipartisan support. Bills that were vetoed after the close of the legislative session include: the K-12 funding bill, the omnibus Agriculture, Environment and Natural Resources bill and the omnibus Jobs & Energy bill. As a result of these vetoes, a special legislative session must be called and new legislation enacted prior to July 1, 2015. Legislative leaders are currently meeting with Governor Dayton to resolve their differences on the vetoed legislation with the hope that a government shutdown can be averted later this summer.

The best outcome of the 2015 regular legislative session was that the legislature ignored the governor’s plan to raise the fuel tax, motor vehicle sales tax and tab fees to fund nearly $7 billion in road and bridge projects. While most Minnesotans agree that there is much work that needs to be done to repair, replace and build new roads and bridges, there is little or no consensus between the DFL Governor, the DFL-controlled senate and the GOP-dominated House on how to fund those infrastructure needs.

The DFL gas-tax hike would index gas taxes to increase along with the eventual price hike at the pump. But before any tax hikes are enacted, St. Paul should heed the call for reforming how existing tax dollars are spent by MNDoT. Furthermore, legislative leaders would be wise to consider the ill-effects of a gas tax hike on Minnesota families: “According to Sentier Research, the median family income is still $900 or 1.7% -- lower than it was six years ago.

Fortunately falling gas prices have offset some of this difference.” House leaders were correct in developing a multi-year plan that would dedicate existing sales taxes and use future bonding bills as a method to fund road construction projects. We remain hopeful that the House plan for getting Minnesotans moving will prevail in an upcoming legislative session.

Another important victory against bigger and more intrusive government was that the DFL-controlled Senate and GOP-led House rejected Governor Dayton’s plan for universal preschool for 4-year olds in the public schools. Legislators from both political parties challenged the governor’s plan and cited numerous challenges facing public schools to administer this unfunded mandate. Furthermore, evidence has shown that preschool scholarships targeted at those children with the greatest challenges work best in preparing those young minds for school.

By defeating this proposal, a bipartisan coalition of legislators stood up to Education Minnesota (the teachers’ union) who made this their number one legislative priority during the 2015 session. This bill would have added 3,000 new dues-paying teachers to their ranks.

There were also some much needed and long-awaited reforms passed during the 2015 legislative session. For example, the highly controversial and redundant Minnesota Pollution Control Agency’s Citizens’ Board was eliminated. All Minnesota counties will now be allowed to contract with private accounting firms in order to comply with state mandates that require timely, annual audits. Not only will this new option provide a competitive option for counties but it will also likely speed up the timing of the public release of these important annual audits. The legislature also passed a two-year repeal of the political contribution refund (PCR) program. This welfare-for-politicians program allows Minnesotans who contribute up-to $50 per election cycle to a candidate or political party to receive a refund from the state.

The bad news: Much needed tax reform didn’t pass this legislative session. With some of the highest tax rates in the country, Minnesota businesses and families paid dearly for this lack of action by the legislature and will continue to do so for the near future. Legislative leaders remain confident that tax talks will continue throughout the summer and fall and that they will begin the 2016 regular legislative session with a plan for real tax relief and much-need long-term tax reform.

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