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Bonding, budget, taxes: How key Minnesota Legislature agreements fell into place

No one got everything they wanted, but the GOP took home a key water project and DFLers got a $1 billion capital spending bill.

House Capital Investment Chairwoman Alice Hausman successfully argued for a $1 billion bonding-plus-cash capital improvements bill.
Briana Bierschbach

First came a deal on medical marijuana Thursday afternoon, and then — after hours of stalled action and closed-door compromise — Minnesota legislative leaders emerged in the early hours Friday with a deal on the 2014 session’s last sticking points: bonding, taxes, and the budget.

The three outstanding issues were inextricably attached to the $1.2 billion budget surplus’ remaining cash, and legislators’ desire to leave before the scheduled Monday adjournment date. House Speaker Paul Thissen said that could come as early as Friday night.

Democrats in the Legislature wanted a smooth vote on bonding — which requires GOP votes to pass. Republicans pushed for extra money for a critical pipeline project in the southwestern part of the state that would deliver water to GOP-held districts.

Meanwhile, DFL Gov. Mark Dayton delivered a surprising and specific wish list to legislative leaders late in the evening that included everything from requiring dog and cat breeders to get licenses, to a promise that lawmakers wouldn’t sneak by an 11th-hour provision nixing a sprinkler-system requirement for all new larger homes.

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No one got everything they wanted.

Bonding tied to taxes

Despite contentious negotiations a day earlier, an $846 million borrowing bill for construction projects plus a $200 million cash supplement sailed through with more GOP votes than needed. The borrowing proposal passed the House on a 92-40 vote, 11 votes higher than required. The cash bill, which didn’t require GOP support, still racked up an 82-50 majority.

To earn those votes, Democrats made a last-minute concession in the tax bill to pay the remainder of the GOP-backed Lewis and Clark water pipeline project. Under the deal, $22 million of the nearly $70 million project would be paid for in the cash construction project bill. The remaining cost would be split between the state and local governments. Local governments could pass new taxes to pay their portion, while the state cut back on future Local Government Aid increases to pay its share over 20 years.

That deal displeased some in the Legislature. House Taxes Chairwoman Ann Lenczewski said the state would ultimately cover 85 percent of the project.

“The House worked diligently to find every other way,” she said.

But the deal allowed the $103 million tax bill — which will provide homeowner, renter and farmer property tax relief to an estimated 1 million Minnesotans — to get a final stamp of approval in committee.

Contentions over budget

The budget took even longer to resolve. Dayton responded to an offer on the $283 million spending package with a list of requirements of his own, which included:

  • A proposal to simplify state rulemaking
  • Inclusion of the so-called Toxic Free Kids Act, requiring manufacturers to report whether they marketed products in the state that contain potentially dangerous chemicals
  • A tougher pipeline safety proposal
  • Passage of a bill to require pet breeders to obtain a license
  • A promise not to include the so-called “sprinkler provision” in any bills
  • Funding for a “sober schools” proposal.

In the end, legislators met almost all of Dayton’s requests — except for the Toxic Free Kids Act. 

Some Democrats suggested final GOP bonding votes were tied to whether the proposal was removed from the budget. Republicans had asked that the language be removed from the final bill, House Minority Leader Kurt Daudt said, but in the end his caucus voted yes not knowing the fate of the provision. 

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“That was language that was definitely a concern in our caucus. We’re glad it was not included in the bill,” Daudt said. “It was part of our discussion, just in a global sense. Our agreement on the bonding bill was defined last year, and our intention all along was to live up to that agreement.”

DFL Rep. Ryan Winkler, the proposal’s author, said Senate Democrats were responsible for the proposal’s death.

“The Senate DFL never identified a single reason not to support the bill, and even refused after Governor Dayton threatened a line item veto of bonding projects unless the Legislature passed the bill,” Winkler wrote in a post on his Facebook page. “The only possible reason DFL senators would play with losing bonding projects over a very reasonable bill is the army of industry lobbyists working to kill it.”

Hausman all smiles

Meanwhile, DFL Rep. Alice Hausman, the Capital Investment chairwoman who had worked for two years to pass a major construction package, was beaming just after 3 a.m., following the strong votes on her bills. 

Last year, she watched a similar package of construction projects fall five votes short, and things were touch-and-go on this year until the very last minute, she said. As early as Wednesday, Hausman had doubts Republicans would put up the eight votes needed to pass the bill.

“[I’m feeling] huge relief,” Hausman said. “I think there are many parts of the state that will feel the transformative nature of the bill.”

The bill would pump funding into a number of key projects, including:

  • $126 million to finish the state Capitol’s restoration
  • $279 million in higher education projects, including $119 million for the University of Minnesota and $121 million for the Minnesota State Colleges and Universities system (MNSCU)
  • Over $113 million for transportation projects
  • $100 million for housing.

Civic centers in Rochester ($35 million), St. Cloud ($11.5 million) and Mankato ($14.5 million) will get funding under the bill, as well as key metro-area projects like the $21.5 million renovation of the Nicollet Mall in Minneapolis.

Dayton won some of his critical projects as well, including $56 million for upgrades to the security hospital in St. Peter and $7 million for the Minnesota Sex Offender Program.

The Senate is expected to take up and pass the bill Friday morning, and there’s little doubt they’ll vote aye. Senate Democrats need to win only two Republican votes to pass that bill. 

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Both chambers will spend much of the remainder of the session taking floor votes, with the House expected to pass the taxes and budget bill Friday before sending the proposals over to the Senate. The Senate will take up the medical marijuana compromise first, and send that proposal over to the House. 

“The tax bill, the budget bill and the bonding bill are all wrapped up,” House Speaker Paul Thissen said after the floor vote Friday morning. “[Session] could end as early as tomorrow if we can get our work done, but we’ll see.”