Tuesday, April 30, 2013

Senate Passes Tax Bill on Second Try.  Monday's Senate debate on the omnibus tax bill made it seem like the entire proceeding was going to be anti-climactic.  I anticipated a session that would be fraught with amendments trying to highlight the proposed tax increases in the bill along with some of the other provisions.  Instead, the proceedings leading up to the first vote on final passage (note the word "first") was relatively quiet and straightforward.  As I wrote earlier, I was expecting a series of amendments on the income tax, cigarette tax, and the sales tax portions of the bill, but there was very little discussion of that outside of the Republican's macro-theme that given the state of the Minnesota (and national economies) and the fact that the projected budget shortfall has shrunk dramatically, tax increases of the size proposed by the DFL majority simply aren't needed and will be detrimental to the average Minnesotan and, by extension, Minnesota as a whole.

Nine amendments were offered, two being fairly technical amendments coming from Senator Rod Skoe, the Senate Tax Committee chair and the bill's chief author.  Three of these amendments were successful; the two offered by Senator Skoe and one by Senator Karin Housley that exempted districts that have passed a resolution to put an operating levy question on the ballot from the referendum freeze contained in the bill (more on that later).  The six amendments that failed came from a variety of sources and were offered by both caucuses.

There was also a motion to re-refer the bill to the Senate Finance Committee that failed.  The reason that motion was in order is that the tax bill contains a $200 million appropriation for proposed renovation of the Capitol area.  There is reluctance on the part of the Senate to pass a bonding bill, but a realization that the Capitol needs refurbishing and upgrades in a number of areas and the desire to contribute to that project and get it underway.  Bonding projects are almost exclusively handled in the Capital Investments Committee, hence, the discomfort on the part of some for allowing the bill to go forward without a review by the Finance Committee.

But the relatively brief debate (it was a couple of hours, but when one is expecting eight hours, two hours seemed like a welcome nanosecond) belied the drama that was to come.  When it came to the final vote, the bill failed on a vote of 32-34 (35 votes needed for passage).  7 DFLers (6 of them freshman senators) voted against the bill and one Republican voted for the bill.  One DFL senator was absent.  The Senate then recessed and both parties headed into private caucuses.

After something like this happens, it's off to the woodshed to put things in order and after a bit, the Senate re-convened, a DFL Senator who had voted against the bill moved to re-consider the vote.  That motion was successful and the debate ensued once again.  A motion was made to refer the bill back to the Tax Committee and that motion failed, setting up another vote for final passage.  This time, the bill passed on a vote of 35-31, with two DFLers changing their votes from "no" to "yes" and the senator absent from the first vote joining on the affirmative side.

As I mentioned briefly above, Senator Karin Housley offered an amendment that would exempt districts who have already passed a board resolution to proceed and put a question on the ballot this fall.  The bill contains a referendum freeze and this isn't the first time a legislative body has included a proposed referendum freeze (or levy cap) to accompany an increase in property tax relief (and the property tax relief in the Senate bill is considerable).  There is always a concern that property taxpayers will not see the effects of the property tax relief if local governmental units simply turn around and "levy back" the relief.  Of course, the difference between school districts and other units of local government is that school districts have to seek voter approval for almost all proposed levy increases while cities and counties can increase levies by council/board approval.  The problem--and Senator Skoe admitted this in his support of the Housley amendment--is that school districts often plan years in advance as to when they will go before the voters and how much they will seek when they do.  A number of districts have been in the planning process to go before the voters with a ballot question this fall and the proposed freeze would throw a king-sized monkey wrench into those plans.  While Senator Housley's amendment only exempts districts whose boards have already passed a resolution to put the question on the ballot, I believe the sentiment will be to allow more districts to seek voter-approved levies this fall once all the dust settles.  Whether that comes in the form of no freeze or a modified freeze remains to be seen, but I urge any district thinking of going out this fall to put their efforts on the rails and make certain that their legislators know of their district's intention.

Just an aside before I move to the next subject.  As I wrote earlier, I expected a raft of amendments yesterday accompanied by a protracted debate.  The debate was long enough, but amendments did not appear in the multitude I imagined.  It got me to thinking how much social media has changed the process.  It used to be that the public's knowledge of the tax bill and its effects were, if not limited, certainly not at the level they are given the resources available to the average citizen.  People who frequent blogs, go on websites of interest, or follow Twitter have a much greater appreciation for the contents of the bill that previous generations of legislative followers.  This gives opponents of a bill an expanded platform from which they can make their case against the bill either in real time or in a manageable window to get maximum play in the public.  In brief, it's probably a lot more effective way to transmit to interested parties their angle on what is happening in respect to a given bill.  Still, I expected a few more "gotcha" type amendments to insert into negative campaign ads (that's the paradigm in which I was raised), but I think the way the debate and subsequent reaction went down is an indication of how things have changed.

Here are links to news stories on the Senate tax bill deliberations.

MNPost:  http://www.minnpost.com/politics-policy/2013/04/minnesota-senate-needs-two-tries-pass-dfl-tax-bill

StarTribune:  http://www.startribune.com/politics/statelocal/205331721.html

Pioneer Press:  http://www.twincities.com/ci_23131157/minnesota-senate-vote-clothing-income-tax-increases

MPR:  http://minnesota.publicradio.org/display/web/2013/04/30/politics/senate-dems-turn-around-tax-bill-vote-after-initial-defeat

Education Conferees Set.  The conference committee members in the House and Senate have been named.  The House conferees are:

  • Representative Paul Marquart (DFL-Dilworth), House Education Finance Chair
  • Representative Carlos Mariani (DFL-St. Paul), House Education Policy Chair
  • Representative Kathy Brynaert (DFL-Mankato)
  • Representative Will Morgan (DFL-Burnsville)
  • Representative Dean Urdahl (R-Grove City)

The Senate conferees are:

  • Senator Chuck Wiger (DFL-Maplewood), Senate E-12 Division Chair
  • Senator Patricia Torres Ray (DFL-Minneapolis), Senate Education Chair
  • Senator LeRoy Stumpf (DFL-Plummer)
  • Senator Alice Johnson (DFL-Spring Lake Park)
  • Senator Kevin Dahle (DFL-Northfield)

A few observations.  First, because no Republican voted for the omnibus education funding bill in the Senate, there is no Republican on the conference committee in the Senate.  A number of Republicans voted for the omnibus education bill in the House and Representative Urdahl has several provisions that he authored that are in the bill.

Representative Brynaert and Senator Dahle have done a lot of work on the assessment issue in their respective legislative bodies and they will be the key players on meshing the two bills together on that issue.  The framework of proposed changes in the assessment system is the working group report from the Minnesota Department of Education that was released near the end of 2012, but there are differences that will have to be ironed out.

Senator Stumpf's presence on the conference committee (he is no stranger to education conference committees, having served as the Senate E-12 chair for eight years) is likely because of the Senate's position on the re-establishment of the general education levy.  One of the things to watch as the education and tax conference committees begin is which target will carry the proposed education property tax relief.


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