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On Tuesday, Gov. Dayton announced he would sign all of the budget bills passed by the Legislature, as well as the bonding and tax bills. Nonetheless, significant controversy continues. Here’s a play-by-play of the final days of the special session, including the CGMC perspective on what may come:

Special session marked by frustration
Before the Legislature had even sent Gov. Dayton all of its budget bills, loud protests rang through the Capitol urging the Governor to “veto everything.” Activists were angered by the perception that Republican leadership in the Legislature had sneaked controversial provisions into a number of bills after reaching an agreement with Gov. Dayton.

Late in the week, it seemed that the tax bill (which includes a $15 million LGA increase) was a possible veto target. Gov. Dayton and other Democrats, including Senate Minority Leader Tom Bakk, expressed concern over the high cost of the GOP’s tax bill, which comes in at $650 million in the first biennium and grows substantially thereafter. Sen. Bakk urged Gov. Dayton to veto the bill to avoid future deficits.

Legislature tries to tie Dayton’s hands
To pressure Gov. Dayton into signing the tax bill, legislators inserted a provision into a state government funding bill without the Governor’s knowledge. The provision would have withheld all funding for the operation of the Department of Revenue unless Gov. Dayton signed the tax bill. On Tuesday, House Speaker Kurt Daudt acknowledged to reporters the provision was placed in the bill behind Gov. Dayton’s back. When asked if the Governor knew about the provision in advance, Speaker Daudt replied, “He found it eventually.”

Dayton signs budget bills, but responds with his own maneuvers
In response to the Legislature’s maneuver, Gov. Dayton wrote to leaders, “I consider this provision … to be a reprehensible sneak attack, which shatters whatever trust we achieved.” Angered by the perceived slight, Gov. Dayton signed all of the budget bills, but used his line-item veto power to strike any new funding for the operation of the Legislature itself. Gov. Dayton indicated that vetoing the Legislature’s funding was a move to bring legislators back to the negotiating table. Arguing they had not negotiated in good faith, the Governor wants to re-open negotiations on items in the tax bill including tax freezes on cigarettes and the state commercial/industrial property tax.

Rather than return to the negotiating table, the Legislature is likely to sue the Governor on constitutional grounds. The courts will be asked to determine whether the Governor in fact has the authority to use his veto pen to eliminate funding for another, co-equal branch of government.
 
The CGMC perspective
Regardless of how the controversy plays out, provisions in the tax bill that benefit CGMC members cities, such as the $15 million LGA increase and LGA formula fixes, are not likely to be impacted. A lawsuit between branches of government would be on the narrow issue of the Legislature’s funding. In the unlikely scenario that negotiations do restart, they will likely be limited to just a few controversial items. The CGMC will continue to monitor developments.

Final outcome of CGMC priorities
For a brief overview of how the CGMC’s top legislative priorities fared this session, please see this 2017 Outcomes Chart.

The House and Senate, purportedly in agreement with Gov. Dayton, passed a tax bill today that comes in around $648 million for the 2018-19 biennium. The bill includes a permanent $15 million increase in Local Government Aid. To see a preliminary estimate of how your city will do with this increase, click HERE for the CGMC’s updated LGA run.

We want to extend a sincere THANK YOU to everyone who responded to our numerous Action Alerts by contacting your legislators and the Governor about the need for an increase in LGA funding. We were hoping for a larger increase, and we will continue the fight, but it was thanks to your help that this final number is higher than previous proposals from both the House and Senate.
 
Here are links to the SPREADSHEET and BILL LANGUAGE for the tax bill.

Last night’s legislative deadline sailed by without action on several key bills, including the tax bill (which includes Local Government Aid funding). Governor Dayton immediately called a special session at 12:01 a.m. this morning, which means legislators are continuing their work to pass budget bills. There is still hope for an LGA increase, but we need your help!

Take action now!
If we are going to secure an LGA increase, it is imperative that you contact Governor Dayton, House Speaker Kurt Daudt and Senate Majority Leader Paul Gazelka by 3 p.m. TODAY. Tell them that the final tax bill must include a permanent $20 million increase in LGA per year over the next two years.

Contact info

Questions?
If you have any questions about LGA or the legislative session, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or 651-259-1911.

With mere hours to go until tonight’s midnight deadline, the Minnesota Legislature is hard at work trying to negotiate and pass a state budget and other key pieces of legislation. At this point it appears we are likely headed for a short special session to complete the state budget.

Legislators were holed up in St. Paul over the weekend and managed to pass a few budget bills out of the House and Senate, including the environment and jobs bills. A number of bills are still on the agenda for today including taxes, transportation and bonding.

Since most of the negotiations have been going on behind closed doors – leaving the public, the media and lobbyists out of the legislative process — we have little indication of what will be included in the final bills.

If you have not done so already, now would be an excellent time to respond to this CGMC Action Alert by contacting your legislators and Gov. Dayton to urge them to include a significant increase in Local Government Aid in the final tax bill.

The environmental bill is one of the few bills that passed on Sunday and is now expected to be signed into law by the Governor. Unfortunately, due to continuing opposition from the Governor and the Minnesota Pollution Control Agency, many of the significant environmental reforms sought by the CGMC were stripped from the final bill, including our call for independent peer review of proposed rules and a prohibition against the enforcement of unadopted rules. On the plus side, the bill includes our request to extend the public comment period for new city permits to 60 days (up from 30 days) and also includes some policy changes regarding the Impaired Waters List.

As for the jobs bills, which passed early this morning and is also expected to be signed by the Governor, it contains several priorities that are important to rural communities:

  • The Job Training Incentive Program is funded at $2.7 million per biennium for 218-19 and 2020-21
  • The Border-to-Border Broadband Broadband Development Grant Program is funded at $20 million
  • A workforce housing grant program within the Minnesota Housing Finance Authority will receive $4 million per biennium for 2018-19 and 2020-21
  • The Greater Minnesota Business Development Public Infrastructure program (BDPI) gets $1 million for the 2018-19 biennium (excluding a $1.6 million earmark in FY 18) and approximately $3.6 million for the 2020-21 biennium. The BDPI program is funded in the proposed bonding bill as well.
  • The Minnesota Investment Fund is funded at $25 million per biennium for 2018-19 and 2020-21
  • The Job Creation Fund receives $17 million for the 2018-19 biennium and $16 million for the 2020-21 biennium

For updates as this final day of session proceeds, please follow us on Twitter (@greatermncities), Facebook and our website (greatermncities.org.)

Time’s almost up!

We are now entering the final days of the legislative session. As the clock winds down, Governor Dayton and legislative leaders remain deep into negotiations with little to show for it thus far. One of the major issues that remains in flux is the tax bill, which is the bill that deals with Local Government Aid.

Take action now!

If we are going to secure an LGA increase, it is absolutely imperative that you contact your legislator and the Governor TODAY. Tell them:

  • The final tax bill must include a $45.5 million increase in LGA.
  • LGA is the single most important tool cities have to hold down property taxes while still providing essential services.
  • With a $1.65 billion state budget surplus, they should easily be able to secure a $45.5 million increase in LGA — the amount needed to bring LGA back to its 2002 level.

Contact info

Questions?

If you have any questions about LGA or the legislative session, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or 651-259-1911.

For Immediate Release: May 11, 2017
Contact: Julie Liew, jlliew@flaherty-hood.com

A PDF version of this press release is available here.

ST. PAUL—With the session deadline looming and little progress thus far on key legislative priorities for rural communities, Greater Minnesota city leaders held a press conference today to caution legislators against repeating last year’s failures on taxes, bonding and transportation.

“Exactly one year ago today, we held a press conference urging legislators to pass an increase in Local Government Aid, a fair and balanced bonding bill and a transportation bill that funds city streets and the Corridors of Commerce program,” said Sara Carlson, Mayor of Alexandria and President of the Coalition of Greater Minnesota Cities (CGMC). “Here we are 365 days later and we are still asking for the same things. What does it take for Greater Minnesota’s needs to be addressed?”

Carlson said that rural Minnesota voters sent a strong message in the November election that their needs and concerns had been ignored for too long. At the start of the session, many city leaders were hopeful that Greater Minnesota issues would get more attention this year since rural legislators make up the majority of the Republican caucus in both the House and Senate. However, with less than two weeks left in the session, serious questions remain about the Legislature’s willingness to invest in rural priorities.

At the top of that list is an increase in Local Government Aid (LGA), the state program that provides property tax relief and allows cities of all sizes to have a similar level of services regardless of their wealth. Nearly 96 percent of Greater Minnesota cities, and 89 percent of cities statewide, receive LGA.

The CGMC is seeking a permanent $45.5 million increase in LGA funding, the amount needed to bring the program back to its 2002 level. The joint House and Senate tax bill doesn’t come close to this benchmark — it includes just a $6 million one-time increase for 2018. Under the bill, LGA would revert back to the 2017 funding level the following year.

“The Legislature’s tax bill fails on LGA,” Carlson said. “No state program does more to improve the quality of life and economic competitiveness of Greater Minnesota communities than LGA. I am perplexed as to why our legislators are not investing more into the program.”

Carlson noted that Gov. Dayton has already pledged to veto the tax bill, a decision the CGMC supports. “The Governor should demand a significant and permanent LGA increase in the final tax bill,” she said.

City leaders are also united in their support for a bonding bill this session. For Greater Minnesota cities, the most critical item in this bill is additional money for grant and loan programs that provide funding for wastewater infrastructure.

There is broad bipartisan support for this funding: the Governor’s bonding proposal includes $167 million, while the Senate bill has $133 million and the House bill has $105 million. However, with vastly different ideas about the overall size of the bonding bill — the House bill totals only $600 million, while the Governor’s plan is nearly $1.5 billion — passing a bill could be difficult.

“We cannot wait another year for a bonding bill,” said Austin City Administrator Craig Clark.  “Like many cities in Greater Minnesota, we are facing massive costs to repair and upgrade our water treatment facilities. If we don’t receive more financial help, cities have no choice but to pass those costs onto our residents and businesses.”

Another long-standing area of concern is transportation. Although city officials want the state to invest more in transportation — particularly city streets and the Corridors of Commerce program — they cautioned the Legislature and Governor against relying too heavily on the general fund.

“Taking too much general fund money for transportation could have a harmful effect on other important priorities like LGA, education and public safety,” said Granite Falls Mayor Dave Smiglewski. “A smart transportation plan that looks out for the long-term success of our state should include a mix of new revenue along with a modest amount of general fund dollars.”

In the waning days of session, the city leaders said they plan to be in frequent contact with their local legislators and other key lawmakers to encourage them to take action on key Greater Minnesota priorities.

“No one wants a repeat of last year,” Smiglewski said, referring to the last-minute failure of several key bills. “Luckily, there is still time for our legislators to make this session a ‘win’ for Greater Minnesota.”

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For Immediate Release: May 4, 2017
Contact: Julie Liew, jlliew@flaherty-hood.com

A PDF version of this press release is available here.

ST. PAUL—City leaders in Greater Minnesota are voicing frustration with their legislators this week after the Tax Conference Committee unveiled a tax bill proposal that fails to adequately invest in rural communities.

The tax plan, released Monday night by the joint House and Senate conference committee, includes a meager $6 million increase in Local Government Aid (LGA) funding for 2018. Because it is just a one-time, one-year increase, LGA would revert back to its current funding level in 2019. City leaders argue this low amount does little to address their cities’ growing needs and is especially unacceptable given the state’s current solid financial footing.

“Greater Minnesota is once again left out and left behind in the tax bill,” said Sara Carlson, mayor of Alexandria and president of the Coalition of Greater Minnesota Cities (CGMC). “With a $1.65 billion budget surplus and in the context of a $1.15 billion tax plan, the Legislature can and should do better for LGA.”

An LGA increase is the number one priority for the CGMC this legislative session. The organization is advocating for a $45.5 million increase for the 2018-19 biennium, the amount needed to bring the program back to its 2002 funding level. Since the Legislature has not passed an LGA increase in the past two years, the token $6 million bump in this year’s conference committee tax proposal would not even begin to cover a basic inflationary increase.

“Rural Minnesotans and Greater Minnesota cities should be and will be upset if this LGA situation is not rectified,” Carlson said. “LGA is essential to keeping our communities healthy and our property taxes down. With just over two weeks left in session, now is the time to speak up and let our legislators know that LGA is too important to be ignored. Before the session ends, the Legislature and Governor must come to an agreement on a significant permanent increase.”

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The Tax Conference Committee unveiled its tax proposal yesterday, and it looks dismal for Local Government Aid.

The bill includes only a $6 million one-time, one-year increase in 2018 and no increase for 2019. This is far below the $45.5 million increase in base funding that is needed to bring LGA back the 2002 level (not even accounting for inflation). This LGA run shows an estimate of how much LGA your city would receive under the conference committee’s proposal, as well as under the other various legislative proposals.

As the Legislature and Governor begin negotiations, now is the time to speak up for your city! With a $1.65 billion state budget surplus and a tax bill that spends $1.15 billion, legislators need to know that their tax bill is simply unacceptable on LGA.

Take action now!

As a Greater Minnesota city leader, it is important that you:

  • Contact your senator and representative as soon as possible and urge them to insist that the tax bill includes a permanent and ongoing $45.5 million increase.
  • Contact Gov. Dayton to thank him for his support for LGA and urge him to continue to fight for more LGA funding in his negotiations with House and Senate leaders.

Contact info

Questions?

If you have any questions about LGA or the legislative session, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or 651-259-1911.

This Local Government Aid (LGA) run projects how much LGA each city will receive in 2018 and 2019 if there is no change to the current law and under the various proposals being considered at the Legislature: the Tax Conference Committee report, Governor Dayton’s plan and the CGMC’s proposal.

Below is a guest column by Moorhead Mayor Del Rae Williams and Mankato City Manager Pat Hentges, who also serve as co-chairs of the CGMC Environment Committee. As of April 28, it is has been published in the Fargo Forum and the Owatonna People’s Press.

Let us be clear: It’s possible to support regulatory reform and the environment at the same time.

Some interest groups, lawmakers and government officials have tried to paint municipal groups seeking to reform Minnesota’s regulatory process as anti-environment and anti-science, greedy penny-pinchers bought and sold by corporate interests. That picture couldn’t be further from the truth.

In actuality, we are city leaders who represent our communities, as well as dozens of others in Greater Minnesota, and are dedicated to protecting our state’s precious waters. Greater Minnesota cities have invested billions in clean water efforts in the last 30 years, and as practical environmentalists we are deeply troubled by some of the recent actions by the Minnesota Pollution Control Agency (MPCA).

We are advocating for reasonable regulatory reform not because we want to ignore science — to the contrary, we are doing so because we strongly believe that sound science and public input is vital to an effective clean water regulatory framework.

While numerous environmental reform proposals have been introduced this legislative session, the Coalition of Greater Minnesota Cities (CGMC) has determined three top priorities that will help improve the wastewater permitting process and ensure that our limited financial resources are spent wisely to implement regulations that will provide measurable benefits to water quality.

The first reform local government officials are seeking is the ability to request an independent scientific review of MPCA’s application of science through wastewater regulations. When new regulations will require cities to spend billions of dollars to upgrade infrastructure, our citizens and businesses deserve an independent second opinion.

There is currently no meaningful way for cities to obtain an independent scientific review of MPCA’s regulations. In recent years, cities have been forced to enter into litigation when the MPCA has ignored legitimate concerns about the underlying science and its application.

The MPCA should welcome independent peer review of their science because it will confirm that water-quality rules are scientifically sound, help to avoid costly litigation and ultimately improve environmental outcomes.

City leaders also have serious qualms about the MPCA’s habit of imposing water-quality restrictions — under the guise of “policies” or “guidance documents” — that are more stringent than adopted during rulemaking. To address this concern, the CGMC is pursuing legislation that prevents the MPCA from imposing regulations that were not properly adopted through the rulemaking process.

By forcing cities to comply with unadopted rules, the MPCA imposes requirements that have not gone through the proper vetting process and ignores the due process rights of the public. Not only does this practice make it very difficult for cities to strategize and plan for how to adhere to regulations, it also breaks down trust between the MPCA, cities and the public.

The CGMC’s third regulatory reform proposal would extend the public comment period for new city permits to 60 days. This minor change is especially important to small cities where city councils meet less frequently and there are fewer staff members. The current 30-day comment period does not allow enough time for cities to adequately analyze and make decisions about MPCA requirements that could have multi-million effects on their communities.

All three of the CGMC’s top environmental regulatory reform proposals — independent peer review of MPCA science, prohibiting the enforcement of unadopted rules and extending the public comment period — remain in play at the Legislature. The House and Senate deserve credit for putting these provisions in their omnibus environment bill, which is currently being reviewed in conference committee.

We want our legislators and Gov. Dayton to know that we are looking out for the best interests of the constituents we represent and the environment, just like they are. Greater Minnesota city leaders — from along the Red River in the north to the Minnesota River in the south and everywhere in between — are willing to continue to invest money and work with the state to clean and protect our waters. However, recent overreach by the MPCA has resulted in an onslaught of regulations that will be extremely costly to implement and have dubious environmental benefit.

We are hopeful that these common-sense reform measures, which aim to protect our communities’ natural and financial resources, will be signed into law this session.