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Bonding

After blowing past their own self-imposed deadlines, Governor Walz and legislative leaders House Speaker Melissa Hortman and Senate Majority Leader Paul Gazelka finally reached an agreement on the state budget Sunday evening. See their signed agreement.

Although Monday was the final day of the regular session — per the State Constitution — a special session will be required for the Legislature to complete its work and pass bills. Governor Walz and legislative leaders have indicated preference for a one-day special session to be held this Thursday, but the exact timing and duration of the special session are still up in the air.

As all three stated during their joint press conference Sunday evening, the agreement reflects a compromise on all sides with no clear “winner.” The two major sticking points in negotiations were the gas tax (Governor and House wanted a 20 cent increase; Senate wanted no increase) and health care provider tax (Governor and House wanted to extend the 2% provider tax set to sunset this year; Senate wanted to eliminate it). Ultimately, the final agreement included no gas tax increase and a 1.8% provider tax with no sunset.

While there is an agreement on the broad budget numbers, the various conference committees were tasked with hammering out the details by 5 p.m. Monday. Reportedly most of them failed to meet that deadline. There is talk that now the bills will be pulled out of conference committee and the final details will be decided between Governor Walz, legislative leaders and the respective committee chairs.

What does it all mean for Local Government Aid (LGA)?

The prospects for an LGA increase — which, if there is one, will be included in the tax bill — are still up in the air.

The tax bill agreement includes only three specific items: a reduction in the second-tier individual income tax rate from 7.2 percent to 6.8 percent, $20 million for the Minneapolis Employees Retirement Fund and a $50 million reduction in the state general levy, which is a statewide property tax that primarily applies to commercial-industrial property. All other issues were left up the conference committee to decide.

The tax bill was given a $0 target, which means that any increase in tax revenues must be matched by an equivalent reduction in revenues or increase in tax aids and credits (e.g. LGA). Federal conformity, Minnesota’s response to the 2017 federal tax overhaul, will play a significant role in shaping what a final tax bill looks like as the plans put forth by Governor Walz, the House DFL and the Senate GOP all generate additional revenue that could be used to pay for other priorities within the tax bill, such as increases to LGA or an expansion of the Working Family Credit.

After the budget agreement was announced Sunday night, we quickly sent out a news release from CGMC President Ron Johnson reiterating that Greater Minnesota communities are counting on the Legislature to pass a $30.5 million LGA increase this year. The CGMC also sent a letter from Ron to all Greater Minnesota legislators arguing that an LGA increase is necessary to provide balance to the tax bill, because 73 percent of the property tax relief provided by cutting the state general levy will go to property located in the metro.

What about a bonding bill?

Governor Walz and the legislative leaders have agreed to a $500 million bonding bill, which includes $440 million in general obligation bonds and $60 million in housing infrastructure bonds. However, the details of what will actually be included in said bonding bill have yet to be determined. From the CGMC perspective, we are hopeful for dollars for clean water infrastructure (PFA $$$), the Greater Minnesota Business Development Infrastructure grant program and child care facilities grants. Several of our member cities also have important projects vying for funding.

It is important to note that unlike other bills, the bonding bill requires a supermajority to pass. That means that it will not pass in either the House or Senate unless some legislators in both chambers vote across party lines. In comments made to reporters following announcement of the budget deal, House Minority Leader Kurt Daudt threw some cold water on the idea of any House Republicans voting for a bonding bill. However, it is quite possible that some House Republicans may choose to break from their party in order to get funding for important projects in their districts.

And CGMC’s child care proposals?

At this point there is no news to report on our two child care priorities: funding for the Minnesota Initiative Foundations (MIFs) for provider training & business assistance and bonding money to build or expand child care facilities. The MIFs proposal is still being considered as part of the omnibus jobs bill, and child care facilities grants are part of the ongoing bonding bill discussions.

Any hope for transportation?

The gas tax was one of Governor Walz’s highest profile proposals this session. He talked about the need for new transportation revenues on the campaign trail and reiterated that commitment the day after his election as governor. This session’s House transportation bill was particularly promising for CGMC priorities. It included new funding for Corridors of Commerce, significant new funding for MSA cities, and a permanent, dedicated funding stream for small cities. When the final budget deal was reached, however, all of those priorities ended up on the cutting room floor.

For cities with populations greater than 5,000, the status quo will hold. With no additional funding coming into the transportation formula, larger cities will not see increases through the municipal state aid formula.

For small cities, the jury is still out, but the path forward is difficult. Without significant new funding for transportation and a relatively small general fund target for transportation, it is difficult to see how the House and Senate come up with a compromise plan that isn’t an abject failure for small-city street funding.

Further, without new funding in the transportation system, significant investments in Corridors of Commerce may not be possible this session. Since it appears that a comprehensive transportation package is now off the table for this year, the CGMC will shift in its focus in the upcoming special session to maintaining the $25 million/year base appropriation for Corridors of Commerce, which the Senate has proposed eliminating. While the Corridors of Commerce program is not perfect and could use some tweaks in the way it scores projects for funding consideration, it remains one of the few mechanisms for funding critical highway projects in Greater Minnesota.

How will the special session play out?

The legislative leaders have hinted at holding a one-day special session on Thursday. Accomplishing that in one day would require suspending the normal procedural rules in each chamber which require action on a bill take place over multiple days. A vote to suspend the rules requires a three-fifths majority, which would require six GOP votes in the House. The House GOP caucus has threatened to vote against such a motion. Failure to suspend the rules means a special session could take several days to finish.

It’s important to note that while there is a global agreement between the Governor, Speaker Hortman and Sen. Gazelka, there are still 199 other legislators to consider — some of whom may not be happy with the terms that were agreed upon or the “cone of silence” that surrounded the negotiations. So while there are just hours until today’s midnight deadline for the regular legislative session, the Legislature’s work remains far from over.

As the special session plays out, CGMC staff will be busy following all the action at the Capitol and continuing to advocate for Greater Minnesota priorities.

Questions?

If you have any questions, please contact CGMC Executive Director Bradley Peterson at bmpeterson@flaherty-hood.com or 651-225-8840.

Although this year’s legislative session is five months long, it’s no secret that the final two weeks of session are especially critical. This is when negotiations really heat up and final decisions are made. As we countdown to the Legislature’s May 20 deadline, it is vital that that you continue to speak up about important CGMC issues such as Local Government Aid, wastewater infrastructure, child care and transportation. To help keep legislators’ attention focused on our top priorities, we invite all Greater Minnesota city leaders to join us for an End-of-Session Lobby Day & Ice Cream Social on Wednesday, May 8. 

The tentative schedule for the day is as follows:

  • 10:30 a.m. – Legislative update and messaging (Room 500 North in the State Office Building, located across the street from the State Capitol)
  • Lunch on your own
  • Afternoon – Meetings with legislators (attendees should make appointments with their own legislators; we may also ask some attendees to participate in additional meetings with key legislators)
  • 2-3 p.m. – Ice cream social with legislators and legislative staff (L’etoile du Nord Vault Room in the Basement of the State Capitol)

Lobby Day is FREE to attend, but we ask that you register by sending an email to Meghan at RSVP@flaherty-hood.com (please include your name, city and position/title).

We hope to get as many city officials to attend as possible! Please share this Lobby Day Flyer and encourage other city officials and staff to join us.

If you have any questions, please contact Julie Liew at jlliew@flaherty-hood.com or 651-259-1917.

For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

Below is a statement from CGMC President and Bemidji City Council Member Ron Johnson on the passage of H.F. 80. The bill includes a provision to convert the Environment & Natural Resources Trust Fund bonds that were part of the 2018 bonding bill — but have since been tied up in litigation — to general obligation bonds, thus freeing up $59 million in state funding for municipal water infrastructure projects.

“We are elated that Republicans and Democrats in the House and Senate worked together to find a meaningful solution that will allow essential clean water infrastructure projects to move forward in Greater Minnesota. As a result of this legislation, numerous cities across the state will be able to proceed with critical water, wastewater and sewer projects that are necessary to help protect Minnesota’s lakes and rivers. We’re hopeful that the passage of this bipartisan bill bodes well for continued efforts by lawmakers to compromise on other important issues this legislative session.”

“While we are pleased that this bill finally opens up the funding that was approved last year, it does not alleviate the massive need for more funding going forward. With the state facing a $5 billion need over the next 20 years for wastewater infrastructure improvements alone, the Legislature cannot shove this issue aside. We urge the Legislature to pass a bonding bill this year that includes the Governor’s request for $67 million for clean water infrastructure grant and loan programs.”

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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.

 

Gov. Tim Walz unveiled a $1.27 billion bonding proposal this week. The package of capital improvements includes $350 million for transportation, $300 million for projects at the University of Minnesota and Minnesota State, and $150 million for housing. You can read the full list of proposed projects here.
 
While various CGMC priorities receive funding in the proposal — including the Greater Minnesota Business Development Public Infrastructure (BDPI) Grant Program, wastewater infrastructure programs, and grants to local governments for road and bridge improvements — many of the proposals fall short of what is needed to address the various infrastructure challenges in Greater Minnesota.
 
The Governor proposed $67 million for Public Facilities Authority (PFA) programs: $40 million for the Water Infrastructure Fund, $22 million for Point Source Implementation Grants, and $5 million for the Clean Water and Drinking Water Revolving Funds. In making this proposal, the Governor has assumed that the $59 million in PFA funding which was included in last year’s bonding bill but is currently tied up in a lawsuit will be resolved before this bill moves forward. The CGMC is advocating for legislation that would provide $128 million in funding for the PFA water programs. If the Legislature is able to resolve the dispute over the money that is being held up from last year’s bonding bill, then the Governor’s PFA proposal is only $2 million less than the CGMC’s request.
 
The Governor’s bonding proposal of $3 million for BDPI would likely not be enough to fund the program through FY2021 due to the program’s popularity and high demand for the funds. In order to ensure cities can continue to access this successful program, the CGMC is seeking $20 million in BDPI funding.
 
Gov. Walz’s bonding plan also includes $100 million each for the Local Bridge Replacement Program and the Local Road Improvement Program. While this funding could help cities in Greater Minnesota address critical transportation infrastructure needs, these two programs have often been used to earmark projects in the metro area, leaving little for communities outside the Twin Cities.
 
Following the release of the Governor’s bonding proposal, Senate Capital Investment Committee Chair Dave Senjem (R-Rochester), who has not held a committee meeting this session, said if the Senate were to pursue a bonding bill at all, it would be closer to the $265 million amount included in the state’s November budget forecast. In the House, Speaker Melissa Hortman (DFL-Brooklyn Park) commented that she would prefer a $3 billion bonding bill, but will put a proposal together closer to half that.  

Although many people understandably canceled their registrations due to the subzero temperatures and icy road conditions, more than 50 city leaders from across the state still made the trek to St. Paul for Legislative Action Day on Wednesday. Thank you to everyone who helped make our annual “day at the Capitol” a success!
 
The day kicked off with a welcome from CGMC President and Bemidji City Councilor Ron Johnson and a legislative update from CGMC Executive Director Bradley Peterson, followed by presentations on our top issues (LGA, water infrastructure, child care, the Greater Minnesota Business Development Public Infrastructure Grant Program and transportation) by CGMC staff.
 
After the crowd enjoyed lunch and listened to Gov. Walz’s speech, they spent the rest of the afternoon meeting with legislators. Although much of the state was shut down due to the weather, offices at the State Capitol remained open. The cancellation of most of the legislative committee hearings that day ended up working out in our favor as CGMC members were able to get more time than usual to talk to their legislators about important issues. A copy of the lobbying packet that was given to CGMC members and shared with legislators can be found here.
 
As is CGMC tradition, the day was capped off with a legislative reception and dinner at Mancini’s, where a bipartisan mix of more than 70 legislators representing both rural and urban districts mingled with CGMC members over a meal of steak or walleye.
 
You can see more photos from Legislative Action Day here.

For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

CGMC calls on legislators to pass $128M in funding for critical clean water infrastructure projects

ST. PAUL—As communities across the state grapple with aging water treatment facilities and rising construction costs, Greater Minnesota city leaders are on calling on the Legislature to pass a bonding bill this year that includes $128 million for clean water infrastructure.

“Cities are the front line of protecting our lakes and rivers from pollution and making sure residents have clean water,” said Ron Johnson, a member of the Bemidji City Council and president of the Coalition of Greater Minnesota Cities (CGMC). “We are proud to play a role preserving Minnesota’s clean water legacy, but cities simply don’t have the resources to make the necessary improvements to their water facilities without assistance from the state.”

A bipartisan bill introduced today at the Minnesota Legislature aims to keep up with the growing demand for state funding to help cities offset the costs to upgrade and rebuild water treatment plants and other clean water infrastructure. SF 587/HF 411, authored by Sen. Gary Dahms (R-Redwood Falls) and Rep. Jeanne Poppe (DFL-Austin), provides $128 million in general appropriation bonds to the Minnesota Public Facilities Authority (PFA) for water infrastructure grant and loan programs available to cities.

“We’re thankful that Sen. Dahms and Rep. Poppe are stepping up to the plate to address the dire need for more funding for water infrastructure,” Johnson said. “Cities across the state—and especially in Greater Minnesota—will benefit from this legislation.”

The funding allocated under SF 587/HF 411 is especially critical this year as several cities have been forced to put important projects on hold after funding approved by the Legislature in 2018 hit a major snag. The bonding bill signed into law last spring included $59 million for the PFA programs; however, a group of nine environmental groups initiated a lawsuit against the state challenging the funding mechanism used in the bill. As a result of the lawsuit, money that many cities were anticipating is now in limbo.

The $128 million funded under SF 587/HF 411 is the amount needed to keep up with the growing demand for PFA grants and loans and cover the amount that has been indefinitely held up due to the lawsuit.

“The longer we have to wait for funding, the more expensive our project becomes,” said Little Falls Mayor Greg Zylka, whose city is among those affected by the funding delay.

Zylka said Little Falls was slated to receive a $7 million grant to upgrade its treatment plant to reduce pollutants in wastewater that flows into the Mississippi River. Without the state grant, the entire $22 million project cost would fall on city residents and businesses.

Little Falls is not alone. Austin, Marshall and Mountain Lake are also near the top of the project priority list and were hoping to receive funding through the 2018 bonding bill. In total, more than 300 cities in Minnesota currently have water infrastructure projects in the works. According to the Minnesota Pollution Control Agency, more than $5 billion is needed over the next 20 years for water and wastewater infrastructure.

“Cities need help now – and that need is only going to grow as time goes on,” Zylka said. “The Legislature must pass funding this year with the full $128 million request.”

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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.

During the last legislative session, the Legislature funded $98 million worth of projects in the bonding bill through a new type of revenue bond to be paid back using the Environmental and Natural Resources Trust Fund (ENRTF). The projects funded using these bonds includes $38.3 million for the Point Source Implementation Grant Program (PSIG), $14.6 million for the Water Infrastructure Fund (WIF) for wastewater projects, and $6 million in matching funds for U.S. EPA funding — all programs that the CGMC supports and are widely used by our member cities.

Last week, a coalition of eight environmental groups served the State of Minnesota with a lawsuit challenging the constitutionality of the funding source for these projects. The environmental groups claim that financing these projects with bonds paid for out of the ENRTF violates the State Constitution. 

We are in the process of investigating this matter on behalf of the CGMC and its members. There is still some uncertainty, but we do know is that this lawsuit endangers the PSIG and WIF funding contained in the 2018 bonding bill and could impact several of our members who were slated to receive this funding. Sale of the bonds to fund these programs could be postponed or even cancelled as a result of the proposed lawsuit, delaying important wastewater and related projects for multiple CGMC members.

You can read more about the lawsuit in this Star Tribune article and this article from MPR.

We will continue to monitor this situation. If you have any questions, please contact Elizabeth Wefel at eawefel@flaherty-hood.com.

For Immediate Release
May 30, 2018
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

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.

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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.

In the final hours of the Legislative session, the Legislature passed a bonding bill that includes approximately $123 million in funding for the Public Facilities Authority clean water infrastructure grant and loan programs. Funding for these programs is one of the CGMC’s top legislative priorities for 2018, and many CGMC members are on the list to receive grants and/or low-cost loans through the PFA programs this year.

It is essential that Gov. Dayton signs the bonding bill and does not line-item veto any of the clean water infrastructure funding. Even if your city is not seeking PFA funding this year, it is essential to continue to fund these programs so that funding is available when your city needs it.

Take action now!
Contact Gov. Dayton today and urge him to sign the bonding bill without line-item vetoing any of the funding for clean water infrastructure programs. Tell him that:

  • Funding for clean water infrastructure grant and loan programs is vital to Greater Minnesota communities.
  • Cities cannot hold off on making critical repairs and upgrades to their water facilities — this funding is needed now.
  • If funding does not come into fruition this year, cities will either continue to fall behind on infrastructure upgrades/repairs or be forced to drastically raise rates on businesses and residents to cover the costs.

Contact Info
Call Gov. Dayton at 651-201-3400 or 1-800-657-3717 or send him an email using this online form: https://mn.gov/governor/contact-us/form/

Questions?
If you have any questions, please contact Elizabeth Wefel at 651-259-1924 or eawefel@flaherty-hood.com.

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 eawefel@flaherty-hood.com.

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.