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Supplemental budget conference committee continues to find common ground

Members of the omnibus supplemental budget bill conference committee begin their May 14 meeting. Photo by Paul Battaglia
Members of the omnibus supplemental budget bill conference committee begin their May 14 meeting. Photo by Paul Battaglia

UPDATED: 8:55 p.m.

*House Public Information Services will update this story throughout the day as agreements are reached.

The omnibus supplemental budget conference committee continued its work Tuesday, spending much of the afternoon discussing, and agreeing to, the education articles of this session’s most significant bill, before later moving on to other subjects such as health and human services and housing.

Conferees resumed their work on HF4099/SF3656* — a compilation of major omnibus bills — after noon and picked up just more than 12 hours from where they left off late Monday evening, having reached agreements on several major components of the legislation, including agriculture, jobs and the environment.

But a number of areas remain unresolved, such as state government, public safety and energy. However, the committee did reach an agreement in several areas Tuesday.

Housing

The 46-page housing article, as amended, conferees discussed Tuesday night combines nearly every provision that was included in the House and Senate bills.

The article would:

  • repeal the rent control prohibition exception;
  • establish a procedure so property owners can discharge restrictive covenants on their property without having to go through an expensive court process;
  • modify manufactured home park closing provisions and the manufactured home park redevelopment grants program;
  • clarify modular home requirements; and
  • change the housing bond allocation process.

Housing Commissioner Mary Tingerthal testified Tuesday night saying the committee hasn’t addressed any of the agency’s concerns and the housing article includes “significant new language” the agency hasn’t seen before.

She also expressed her disappointment that the housing article is in a finance bill but includes no appropriations.

 

Health and Human Services

Conferees began adopting some health and human services provisions Tuesday evening, but eventually set that area of the bill aside to continue negotiations in some areas not yet agreed upon.

They did adopt House language mandating an eligibility audit for enrollees of state benefits programs, including Medical Assistance, MinnesotaCare and the Supplemental Nutrition Assistance Program. In the wake of controversy over alleged child care payment fraud, Rep. Matt Dean (R-Dellwood) successfully offered an amendment to include the Child Care Assistance Program to the list of programs to be reviewed.

Also adopted was language that would mandate the Department of Human Services to reconcile certain MinnesotaCare premiums. However, language banning the implementation of the governor’s proposed MinnesotaCare buy-in if the department did not reconcile the premiums was not included.

The heads of three state agencies testified on their concerns with particular proposals. They said it was difficult to fully analyze the proposed conference report language because the committee had not provided them with budget spreadsheets.

Both Commerce Commissioner Jessica Looman and Health Commissioner Jan Malcom voiced opposition to a provision expanding short-term insurance because of what they said were weak benefits relative to regular health insurance. Looman said it would destabilize the individual insurance market by removing healthy people from long-term insurance plans. Short-term plans being considered by the Legislature made their health plans effectively the same length as regular insurance plans, she said.

Human Services Commissioner Chuck Johnson lamented the lack of juice behind proposed reforms on elder abuse. He also voiced opposition to the benefit enrollees audit and the MinnesotaCare premium reconciliation language.

 

E-12 Education

The focus remains on school safety as the conference committee agreed to provide $27.9 million of its $30.2 million Fiscal Year 2019 budget target to the cause.

Rep. Jenifer Loon (R-Eden Prairie), chair of the House Education Finance Committee, said she’d worked with her colleagues to incorporate the best of both bills, as well as many of Gov. Mark Dayton’s recommendations. 

“We made good use of the money that we had, with a special priority on school safety,” she said. Adding there are always more funding requests than there are funds to go around, so they did the best they could with what they had. 

The conference committee report would also provide a number of individual grants, including:

  • $300,000 for the St. Cloud ELL Summer Program;
  • $250,000 for the Sanneh Foundation;
  • $200,000 for Mounds View early college aid;
  • $200,000 for the Office of the Legislative Auditor to create a report on school revenue;
  • $130,000 in Fiscal Year 2019 for the Angle Inlet one-room school house, another $130,000 during the 2020-21 biennium; and
  • $100,000 for online access to music education grants.

The House proposal would have provided extended prekindergarten funding and special education aid in a future biennium, but both were cut from the conference committee report. 

Compromise language was reached surrounding:

  • student discipline policies;
  • enhanced civics education;
  • dyslexia screening and student literacy;
  • teacher code of conduct and background checks;
  • the creation of a special education working group; and
  • provisions prohibiting school lunch shaming.

“We have a good bill going forward, we tackled a lot of difficult issues this year and I think that’s it’s a bill that we can be proud of,” said Sen. Eric Pratt (R-Prior Lake), chair of the Senate E-12 Policy Committee.

Education Commissioner Brenda Cassellius applauded lawmakers’ work but took issue with the budget target and several new and unfunded mandates.

“The problem with the overall bill is that the target is too low,” she said. Given the state’s projected $329 million surplus, she was disappointed that $30.8 million, or 8.5 percent, was allocated to E-12 education. 

Cassellius encouraged the committee to revisit a number of policy provisions, including the controversial summative-rating system, and to incorporate Dayton’s request for $137.9 million in Fiscal Year 2019 for emergency school aid.

 

Background

Conferees first met May 8 to begin learning about the differences between the House and Senate versions of the omnibus supplemental finance bill, sponsored by Rep. Jim Knoblach (R-St. Cloud) and Sen. Julie Rosen (R-Vernon Center) – who co-chair the committee.

Negotiations have been ongoing to find common ground that will allow a final bill to be repassed by both bodies and, hopefully, signed into law by Dayton.

Monday’s meeting offered the first look at the results of those negotiations, and Tuesday is expected to be another long day as that work continues.

 

Agreements reached Monday

Jobs and economic development

The House version of the jobs and economic development articles in the bill included funding for several more programs and projects than the Senate’s, but conferees have come to a compromise on several items.

The committee agreed to appropriate $15 million from the General Fund – the only new money in this portion of the bill – to the Border-to-Border Broadband Grant Program. But this doesn’t include an earmark for a satellite broadband pilot program Rep. Pat Garofalo (R-Farmington) had included in the House version. This appropriation is less than the $30 million Dayton requested in his budget.

The jobs appropriation article, as amended, also includes a $1 million set aside for the Duluth Paper Mill; $650,000 set aside from the Workforce Development Fund for job losses at Electrolux in St. Cloud; and $1.5 million grant to the City of Cambridge.

The committee also adopted the economic development article, which includes changes to the taconite development fund; the labor and industry article, which includes language to establish a two-tiered minimum wage for tipped employees; the workers’ compensation general article, which includes several articles related to workers compensation and a provision to develop treatment criteria for post-traumatic stress disorder; the unemployment insurance advisory council article; and the spreadsheet, as amended.

The committee did not discuss energy articles Monday night.

 

Higher Education

Higher education provisions make up one of the smaller and less controversial sections of the omnibus bill, nonetheless there were plenty of variances between the House and Senate versions to iron out. 

The most glaring differences came down to supplemental funding, with the original House bill appropriating $6 million in Fiscal Year 2019, compared to the Senate’s $2 million.

The compromise language provides an increase of $4 million, with $3.5 million of that going to the Minnesota State system. Of that, $3 million would be appropriated for campus support and $500,000 for renewal of workforce development scholarships. The remaining $500,000 would be disbursed by the Office of Higher Education for specific grant and loan forgiveness programs.

House appropriations that were scrapped in the conference committee bill include $500,000 for the University of Minnesota, and an earmarked $1 million of Minnesota State funding for the cybersecurity programs at Metropolitan State University.

Knoblach asked if the Senate held a hearing on the cybersecurity program or considered providing funding for it.

“I know there were some people that were really passionate about that program and I just wanted to ask about that,” he said.

Senate President Michelle Fischbach (R-Paynesville) said that given the overall need for campus support, they opted to allocate the money to the Minnesota State system, rather than one specific program. 

One of the more significant policy differences between the House and Senate was in regard to reforming the University of Minnesota Board of Regents selection process. The House included a provision that would have replaced the Regent Candidate Advisory Council, a citizen advisory group, with a Legislative Commission on Regent Selection.

It wasn’t included in the bill. Instead, the conference committee bill as amended leaves the RCAC intact but makes minor modifications to expand the Legislature’s oversight of the council.

 

Environment and Natural Resources

The committee agreed to provide $1.3 million to research and address chronic wasting disease, raising both the House and Senate’s initial appropriations to closer match the governor’s $1.56 million proposal.

The final agreement would pose no impact to the General Fund in the 2018-19 and 2020-21 biennia. Sen. Bill Ingebrigtsen (R-Alexandria) said the $2.9 million that would be expended from the natural resources fund is largely the result of a one-time forestry account shuffle and various expenses toward all-terrain vehicle trails.

“That particular sport is expanding, which I think is really exciting for Minnesotans,” Ingebrigtsen said.

The $1.25 million in appropriations from the Game and Fish Fund would be used to fund the response to chronic wasting disease and a wild rice report.

The plan would split deer hunting license fee allocations so that half would go into the game and fish fund and half for deer management.

That said, the bill is weighted more toward policy than appropriations. It contains a number of controversial provisions, including the repeal of the state’s 45-year-old rice water quality standard. The bill the provision was incorporated from, HF3280, was vetoed by Dayton last week.

The bill also contains a provision that would require the Pollution Control Agency to seek legislative approval before adjusting water quality permit fees.

While the PCA is critical of those two provisions, Commissioner John Stine praised other parts of the bill.

“The final language has less financial impact on the General Fund and the environmental fund, which is helpful for the agency’s fiscal stability, we appreciate that,” Stine said during Monday’s hearing.

 

Agriculture

More money would be available for rural mental health efforts, but those funds would come at the expense of urban agriculture programs, under compromise language adopted by the conference committee. 

Conferees agreed to provide nearly $250,000 to fund additional mental health resources, including $217,000 for an additional rural mental health specialist to provide counseling and $30,000 for the Farm Advocates Program.

However, those funds come at a cost.

While the House budget target had proposed spending an additional $250,000 for agriculture, and the governor proposed an additional $200,000, the Senate position called for offsetting its $200,000 in proposed expenditures by cutting a corresponding amount from the budget.

The language agreed upon states, in part, that the Agriculture Department “shall reduce by a total of $250,000 the planned expenditures for urban youth agricultural education, urban agriculture community development, the good food access program and the farm-to-school program.”

“We agreed to the House number, but we did have a zero [budget] target to work with,” Sen. Torrey Westrom (R-Elbow Lake), who chairs the Senate’s agriculture policy committee, told the conference committee.

But Matt Wollman, deputy agriculture commissioner, said the governor does not support “repurposing” money intended for those programs.

“These are really important in Minnesota.” Wollman said. “They have already had a big impact in communities across the state that have received the grants.”

 

Transportation

Conferees agreed to transportation language that scales back the House’s proposal of more than $100 million in supplemental spending on the state’s roads and bridges.

Under the agreement struck by House and Senate negotiators and adopted late Monday night, the bill would spend an additional $57.7 million in General Fund dollars on the state’s transportation infrastructure in Fiscal Year 2019.

That spending would include:

  • $12.8 million for continued development of the state’s troubled vehicle license and registration system, MNLARS, far less than the $33 million in additional funding the Dayton administration has requested;
  • $10.7 million in township road aid;
  • $10.4 million on specific road projects in the cities of Little Falls, Mankato and Virginia;
  • $10 million on the Corridors of Commerce program;
  • $8.5 million in supplemental funding for the Small Cities Assistance Fund to aid local road projects;
  • $5 million in additional funds to reimburse deputy registrars impacted by the state’s botched rollout of MNLARS; and
  • $4 million in Township Road Aid.

More than $200 million in trunk highway bonding that had been included in the House version has been stripped out. That language now resides in the omnibus capital investment bill that passed off the House Floor Monday afternoon. 


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