Thank you to everyone who attended the CGMC Fall Conference last week at Arrowwood Resort & Conference Center. More than 100 city leaders representing 50 cities attended the conference — setting an attendance record for the second straight year!
The conference kicked off Thursday afternoon with a presentation by Minnesota Management and Budget Commissioner Myron Frans, who shared insights into his past eight years as a member of Gov. Dayton’s administration and the ups and downs our state budget faced during that time. He also provided information on the state’s current economic outlook and what could be in store for the budget in the near future. You can read Frans’ presentation here.
Following Frans’ presentation, we delved into a panel discussion on the rural/urban divide and the role city leaders can play in helping to bridge the gaps between the various and diverse communities in Minnesota. Panelists included Ben Schierer, mayor of Fergus Falls; Suzanne Hilgert, mayor of Olivia; Peter Lindstrom, mayor of Falcon Heights, and Brad Tabke, former mayor of Shakopee and a newly elected state representative. The panelists shared examples of ways they have learned from leaders in other parts of the state and discussed the issues in which they wish there was better understanding between rural and urban communities. Conference attendees also participated in small group discussions where they brainstormed ideas on steps they can take within their cities to help bridge the rural/urban divide.
With the conference being held just a little over a week after the midterm elections, it would not have been complete with a good ‘ole CGMC election recap. CGMC Executive Director Bradley Peterson provided in-depth analysis of the 2018 election results — particularly the race for governor and the Minnesota House — and what they could mean for CGMC priorities and other issues in the upcoming legislative session. You can read Bradley’s presentation here.
After the election analysis, we welcomed several legislators for a panel discussion on one of the most critical issues currently impacting Greater Minnesota: the child care shortage. Nicole Griensewic Mickelson, executive director of Region Nine Development Commission and president of the Greater Minnesota Partnership, moderated the discussion featuring Sen. Kent Eken (DFL-Twin Valley), Sen. Mark Johnson (R-East Grand Forks), Sen. Erik Simonson (DFL-Duluth) and Rep. Joe Schomacker (R-Luverne). You can watch video of the discussion here.
Annexation is another important topic explored at the conference. CGMC lobbyist Elizabeth Wefel informed attendees about some looming concerns, particularly the possibility that the CGMC and cities may need to play defense on legislation being proposed by township groups that could thwart cities’ ability to pursue annexations. You can read Elizabeth’s Power Point presentation here.
In the evening, attendees enjoyed a cocktail reception and dinner followed by an excellent presentation by Emmy-award winning reporter Tom Hauser of ABC 5 Eyewitness News. A veteran political reporter, Hauser shared his take on the national and state election results and some of the issues that could be on the horizon in the future.
Friday morning kicked off with a presentation/discussion led by Brandon Fitzsimmons, a labor and employment attorney with Flaherty & Hood, on how to effectively evaluate the performance of city administrators and managers. Waite Park City Administrator Shaunna Johnson and Mayor Rick Miller shared their stories on this issue and provided advice on how to help performance evaluations run smoothly. You can read Brandon’s Power Point presentation here.
In addition to speakers and presentations, the conference also included a membership meeting Friday morning during which members discussed and adopted the CGMC’s 2019 legislative policy positions. To review the adopted positions, click on the following subject areas:
Members also discussed the CGMC’s legislative priorities for 2019 and learned about our initial messaging and strategy plans for the upcoming legislative session.
Thanks again to everyone who attended our 2018 Fall Conference. We look forward to seeing you again at our next CGMC event – Legislative Action Day on Jan. 30 in St. Paul. We will send out registration information for Legislative Action Day soon!
The American Society of Civil Engineers (ASCE) released a report card on Minnesota’s infrastructure this week, and it’s not one we’ll want to take home and display on the refrigerator. Overall, Minnesota’s infrastructure received a “C” grade from the group, with grades in the nine individual categories ranging from a “B” in aviation to a lowly “D+” in roads.
When comes to our roads, CGMC In Brief readers are familiar with the surprising statistic that despite ranking 22nd in population and 12th in land mass, Minnesota is home to the fifth-most road miles of any state. Maintaining that large of a system is a huge challenge, the ASCE notes, and Minnesota’s funding shortfall continues to grow with no clear or easy answers in sight.
Other grades in the report included a “C” in wastewater and “C-“ in drinking water, which further highlights one of the CGMC’s top goals in recent years — the need for more state investment in clean water infrastructure.
You can see all of the grades and the full report card here.
Registration is now open for the CGMC Fall Conference! The conference will be held Nov.15-16, 2018 at Arrowwood Resort & Conference Center in Alexandria and will feature presentations, discussions and speakers on a number of important topics. The packed agenda includes:
- Luncheon presentation by Myron Frans, commissioner of Minnesota Management and Budget
- Keynote dinner featuring Tom Hauser, chief political reporter for ABC5 Eyewitness News
- Legislative panel discussion on child care
- 2018 election recap and analysis
- A discussion featuring Greater MN and metro-area elected officials who are working to bridge the rural/urban divide
- Presentation on annexation and why could be a significant issue in the next legislative session
- Full membership meeting to discuss and adopt the CGMC’s policy positions and priorities for the upcoming legislative (it’s critical that your city lend its voice to this discussion!)
- …and more!
See this CONFERENCE AGENDA & VENUE INFORMATION for full details.
Please register online at greatermncities.org/FallConf18. The deadline to register is Nov. 7.
* Please note that attendees are responsible for their own hotel reservations.*
Arrowwood has a block of rooms reserved for CGMC Fall Conference attendees at a discounted rate of $94 (plus tax). Call Arrowwood at 320-762-1124 by Nov. 1 to book a room under the CGMC’s block.
Note: There are plenty of rooms available at Arrowwood on the night of Nov. 15, but only a limited number of rooms are available on Nov. 14 (the night before the conference). In order to accommodate those who wish to come to Alexandria on Nov. 14 (and may be unable to stay at Arrowwood), we have reserved a small block of rooms for the CGMC at Hampton Inn & Suites in Alexandria. The cost is also $94. Call Hampton Inn at 320-763-3360 by Oct. 29 to make a reservation (rooms are available both Nov. 14 and Nov. 15).
If you have any questions about the conference, please contact Julie Liew at email@example.com or (651) 259-1917.
Newly elected CGMC President Ron Johnson was recently featured in an article in Prairie Business, a monthly magazine that focuses on business and economic development issues pertaining to Minnesota, North Dakota and South Dakota.
In an interview with editor/reporter Tom Dennis, Johnson discussed his nearly two decades of service on the Bemidji City Council, his long-time involvement with the CGMC (including the fact that he has only missed one CGMC conference in 18 years!) and the important role the CGMC plays in keeping Greater Minnesota strong. Johnson also spoke at length about how many of the issues that the CGMC works on – such as LGA, child care and transportation – have a major impact on economic development and business growth in Greater Minnesota.
The CGMC is hosting a breakfast on Friday, June 22 as part of the League of Minnesota Cities conference in St. Cloud. CGMC transportation lobbyist Shane Zahrt will lead a discussion, titled “Pile-up at Funding Junction,” focusing on the past, present, and—most importantly—the future of transportation funding in Minnesota. The emphasis will be on why current funding is falling short and what responsible, sustainable funding might look like.
The CGMC breakfast will be held from 7:30-8:30 a.m. at the Bell/Alexander Rooms on first floor of River’s Edge Convention Center. The breakfast is free and open to both CGMC members and non-members, so we encourage you to invite others to attend as well. Registration is not required, but please let us know if you are planning to join us by sending an email to RSVP@flaherty-hood.com.
Below is statement from CGMC President and Granite Falls Mayor Dave Smiglewski regarding the passage of the 2018 bonding bill.
“We are excited that Gov. Dayton has announced that he will sign the 2018 bonding bill into law. This bill includes critical funding for clean water infrastructure grant and loan programs, transportation projects, economic development initiatives, colleges and universities and other numerous projects that are important to Greater Minnesota cities.
“We would like to thank Sen. Senjem and Rep. Urdahl for crafting a balanced bonding bill that recognizes infrastructure needs across the state. We are grateful that our legislators and Gov. Dayton were able to put their differences aside and pass a bonding bill that funds vital projects, creates jobs and invests in a better future for our communities.
The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 97 cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC online at greatermncities.org and follow us on Twitter @greatermncities.
The legislative session ended as scheduled late last night, but the final outcome is still not exactly clear. At least two of the three major bills everyone thought the Legislature needed to address this year seem headed for a likely veto. The fate of the tax bill and supplemental budget bill appear very much in doubt as there was little actual negotiation between the Legislature and Gov. Dayton in the final hours of the session and both bills are filled with several provisions the Governor likely finds objectionable. The bonding bill seems the most likely to be signed, but even that is not without controversy.
Once presented with the bills, the Governor has 14 days to determine if he is going to sign them, issue a veto, or leave them unacted upon which would be a “pocket” veto. See below for more details and stay tuned for further developments as Gov. Dayton decides the fate of legislative measures.
Consensus on bonding bill emerges at 11th hour
The bonding bill is always one of the last bills to be finalized during the legislative session, and this year was no different. The all-too-familiar script played out this week when the House successfully passed its version of the bonding bill off the floor on May 14, but the Senate version failed to pass off the floor two days later. This set up a waiting game of when a bonding bill would “emerge” and the guessing as to what would be in it.
True enough, a conference committee was called midday Sunday (just hours before the Legislature’s deadline) and a bill materialized. The bill passed the conference committee with little trouble, but it was not immediately brought to the floor as pressure built. The halls of the Capitol were rampant with rumors that the Senate would not have the votes to pass the bill and last-minute arm twisting, negotiating and maneuvering reached a fever pitch.
The final bill ultimately passed in House by a vote of 113 to 17 and in the Senate by a vote of 42 to 25, with both bodies reaching the supermajority required to pass a bonding bill.
The final bill included funding for CGMC priorities including $5 million for the Greater Minnesota Business Development Public Infrastructure (BDPI) Grant Program, more than $120 million for clean water infrastructure (see more below), and hundreds of millions of dollars in authorization for transportation projects.
While there is a strong expectation that Gov. Dayton will sign the bill, it is his prerogative to line-item veto projects. There is also a chance that he could veto the whole bill. If he does, it would be largely over a disagreement over some of the mechanisms used to fund projects out of monies associated with the Environmental Trust Fund and the state’s Legislative-Citizen Commission on Minnesota Resources (again, see more below).
If your city has a project in the bonding bill, we strongly encourage you to reach out to the Governor’s office and urge him to sign the bill.
Legislature uses new funding mechanism to get money for clean water programsIncreased funding for the Public Facilities Authority’s (PFA) clean water programs is one of the CGMC’s top funding priorities for 2018. The bonding bill passed by the Legislature last night contained approximately $123 million for the PFA to provide grants for wastewater and drinking water projects. However, the bill created a new funding mechanism for Point Source Implementation Grants (PSIG) that could lead to a line-item veto of those funds.
The bill includes general obligation bond funding of $14 million for state matching funds for federal Environmental Protection Agency grants and $25 million for drinking water grants from the Water Infrastructure Fund (WIF). In addition, it includes $25 million for grants to specific political subdivisions.
Where it gets little murky is that the Legislature also created a new class of appropriation bonds that will be funded by the Environmental and Natural Resources Trust Fund (ENRTF), which are lottery funds typically used to fund grants recommended by the Legislative-Citizens Commission on Minnesota Resources (LCCMR). These new appropriation bonds will add $6 million to the state matching funds for the EPA capitalization grants, $14.6 million to WIF for wastewater grants, and $38 million to PSIG.
A number of groups are objecting to the creation of the appropriation bonds, claiming that the funding mechanism defeats the intent behind the constitutional amendment creating the ENTRF. There is a danger that Gov. Dayton could veto this portion of the bill because of the funding mechanism. Please keep your eye out for an “Action Alert” from the CGMC asking members to call on the Governor to support the bonding bill, including the new funding for PFA programs.
If you have any questions regarding this portion of the bonding bill, please contact Elizabeth Wefel at firstname.lastname@example.org.
Transportation funding makes its way into bonding, supplemental budget bills
Corridors of Commerce – Disappointment set in for many Greater Minnesota residents on May 1 when the Minnesota Department of Transportation (MnDOT) announced that $400 million in Corridors of Commerce funding it was authorized to allocate would go to projects inside the metro area or immediately adjacent to it. Advocates for many important Greater Minnesota transportation projects had been waiting for years to make the type of progress that this funding presented, and were dismayed when the dollars flowed elsewhere.
In response, the CGMC and other Greater Minnesota transportation advocacy groups called on the Legislature and Governor to make it right by allocating additional funds to Corridors of Commerce and directing all of those funds to Greater Minnesota projects. This set in motion a chain of events that resulted in $400 million in Corridors of Commerce funding being approved in the final bonding bill that passed both the House and Senate just minutes before the Legislature adjourned. These dollars are accompanied by language that is designed to direct a significant share of them to projects like Highway 14, Highway 23, and potentially others if funding allows.
All that these projects need now is the Governor’s signature on the bonding bill. If you have a project you care about, please contact the Governor’s office and encourage him to sign the bonding bill.
Local roads and bridges – The Local Road Improvement Program, which provides grants to local governments for road projects and is typically funded through the bonding bill, received around $78 million in total funding. Approximately $28.6 million of those funds are earmarked for specific projects, leaving about $50 million to be awarded as grants. These grants are awarded through an application and selection process that will likely take place later this year. Stay tuned to the CGMC in Brief for updates.
City street funding – Legislators continue to express sympathy for small cities which receive no funding for their city streets through the existing constitutional formulas. This year’s House transportation bill would have included permanent funding for the Small Cities Assistance Program, but that funding was reduced to a one-time appropriation of $8.5 million for FY2019 only in the final supplemental budget bill. It is still unknown whether Gov. Dayton will sign the supplemental budget bill, which totals nearly 1,000 pages and touches on numerous issues.
For MSA cities—those with a population greater than 5,000 residents—efforts to increase city street funding largely fell on deaf ears. While the House advanced efforts to put more funding into the Highway User Tax Distribution Fund, which would have trickled down to MSA cities through the formula, no other permanent increase came out of this session.
Constitutional amendment for transportation fails
Throughout this legislative session, talk of a possible constitutional amendment to re-dedicate existing general fund revenues to transportation simmered in the background and nearly boiled over in the final weeks as the House took up and passed the measure. Ultimately, the measure failed to gain enough support in the Senate and was never brought to the floor for a vote. Thank you to all of our members who contacted your legislators and urged them to oppose this amendment.
The CGMC voiced concerns along the way because of the significant detrimental impacts the proposal would have had on our state’s general fund. Once fully phased in, the measure would have re-directed around $279 million a year in existing general fund revenues.
The CGMC supports long-term sustainable funding for transportation, but has long opposed efforts like this one that would jeopardize the integrity of the state’s budget in the process.
Legislature passes tax bill, but Governor threatens veto
The Legislature passed a tax bill on the final day of the session which would align Minnesota’s state tax system with the recently reformed federal tax reform. The bill cuts some business taxes while decreasing the individual income tax rates for the two lowest income tax brackets.
Gov. Dayton asserted that the bill did not do enough for middle-class Minnesotans, and sought $138 million in emergency school funding. The GOP bill provided new money (by forcing the state Department of Natural Resources to repay the use of school land), while making existing education funding more flexible. The Governor opposed the GOP plan.
The Governor has up to two weeks to sign the bill. If he chooses not to sign it, the Legislature can still pass a federal tax conformity bill before the 2019 tax filing season. DFL legislative leaders support vetoing the bill.
A proposal to add a new amendment to the Minnesota Constitution that would re-direct approximately $300 million a year from the state’s general fund to transportation is still alive at the Legislature. A bill that would put the amendment on the ballot this November is being voted on in the House today, where is it expected to pass. That means our best hope of defeating this harmful amendment now lies in the Senate.
Take action now!
Contact your senator, Senate Majority Leader Paul Gazelka and Senate Minority Leader Tom Bakk as soon as possible and urge them to oppose the proposed constitutional amendment.
Tell them that:
- By re-directing and dedicating general fund dollars, this amendment poses a serious threat to other important priorities such as Local Government Aid, education and elder care.
- This amendment would jeopardize the stability of the state budget.
- Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.
- Find your senator’s contact information in the Senate Member Directory or by visiting Who Represents Me?
- Contact Senate Majority Leader Paul Gazelka at email@example.com or (651) 296-4875.
- Contact Senate Minority Leader Tom Bakk via his email contact form or (651) 296-8881.
Questions? If you have any questions about the proposed constitutional amendment, please contact Bradley Peterson at firstname.lastname@example.org or (651) 259-1911.
Below is a guest column written by Dave Smiglewski, president of the CGMC and mayor of Granite Falls, and Todd Holthaus, president of the Board of Directors of the Minnesota Rural Education Association and superintendent of Hills-Beaver Creek Schools.
Do Minnesotans value roads and bridges more than schools and public safety?
While that exact question won’t be on the ballot, there is a very real possibility that Minnesotans will have to ponder that query when they head into voting booth in November.
A proposal making its way through the Minnesota House and Senate would ask voters to change the State Constitution to permanently dedicate the revenue attributable to the sales tax on auto parts to roads and bridges.
These funds, almost $300 million per year, currently go to the state’s general fund — the same pool of money that supports things like schools and Local Government Aid (LGA).
Make no mistake about it, Minnesota’s roads and bridges need help. However, diverting money away from the general fund will either cause pain to other important state programs or require the state to raise taxes to make up the shortfall. That is why we urge legislators and the public to reject this proposed constitutional amendment.
As rural leaders, we are especially concerned about the potential impact this diversion of funds would have on Greater Minnesota.
Rural schools are particularly reliant on the state’s per-pupil formula. With significantly less in household income and property tax base than the metro area, it is much harder for rural schools to fill the gap if state funding fails to keep up. When times are good, education tends to see inflationary increases. When the general fund is in trouble, education funding is often held flat, causing our schools fall behind.
Likewise, rural Minnesota cities are especially dependent on LGA, which helps cities with less property tax base provide services such as police and fire protection, infrastructure, parks and libraries — all critical to having a safe and thriving community.
When the general fund suffers, LGA is among the first items on the chopping block. As we have seen in the recent past, property taxes go up, service levels go down and rural communities suffer when LGA is sacrificed due to state budget cuts.
The threat to our rural schools and cities is more than theoretical. During a hearing in the Senate Transportation Committee, Sen. Scott Newman, one of the chief authors of the amendment, acknowledged that LGA and education are typically the first budget items cut by the Legislature when there is an economic downtown.
Going to voters for a constitutional amendment may seem like an attractive way to get dedicated funding for transportation, but amendment proponents need to be honest about its real cost. The $300 million this amendment would divert from the general fund is not free money; it is coming from other places in state government.
Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.
This amendment would put many important priorities at risk. Ask your legislators to vote “no” on the proposed constitutional amendment.
A proposal to have Minnesotans vote on a constitutional amendment to dedicate the portion of the sales tax attributable to revenue on auto parts continues to march along, especially in the House. The proposed amendment had hearings in the House Tax Committee and Ways and Means Committee this week and is poised for action on the floor whenever House leadership decides the time is right.
The progress on the Senate side is more complicated, with Senate Majority Leader Paul Gazelka (R-Nisswa) acknowledging in an MPR story that they may not have the votes, especially if no Democrats are willing to vote for the bill. The measure is currently awaiting action in the Senate Tax Committee, where it has been languishing for weeks. Sen. Roger Chamberlain (R-Lino Lakes), chair of the committee, is rumored to be opposed to the amendment.
During a meeting on Tuesday, the CGMC Board of Directors affirmed its opposition to the amendment because of the negative impact it would have on the state’s general fund and the threat that poses to the LGA program. When fully phased in, it is estimated that the amendment could sequester up to $300 million a year for roads and bridges that currently goes into the general fund. For context, that is more than half of the entire yearly appropriation to LGA.
The CGMC continues to oppose the amendment despite the inclusion of dedicated money for the small-city streets program (approximately $12.5 million a year once fully phased in) because the risk to the general fund is greater than the benefits that the amendment may bring.
Even before Minnesotans get a chance to vote on the amendment (should it pass the Legislature), the state’s surplus will likely be completely spent by this Legislature when you factor in the costs of this year’s efforts on tax conformity, the supplemental budget bill, the pension bill and tax cuts from last year’s tax bill.
Stay tuned for more developments and potential action alerts on this issue as the session comes to a close.