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Taxes, booze and plastic bags: What got done — and what didn’t — at the 2017 session of the Minnesota Legislature

Minnesota House of Representatives Public Information Services
Top lawmakers were negotiating down to the final hours of the 2017 session — and of the special session — over “pre-emption,” a bill to stop local governments from passing their own minimum wage and labor laws, separate from state standards.

It’s hard to pinpoint exactly when it all went wrong.

Was it the hastily drafted, one-page agreement signed by top political leaders in order to finish up work on the state budget? Was it the messy reality of divided government? Was it all going to end this way no matter what?

After all, it’s the Minnesota Legislature. Everything that happens here has happened here many times before.

Regardless, state lawmakers found themselves in another fine mess this week, as an intended one-day special session of the Minnesota Legislature turned into a four-day drama fest. Republican senators canceled flights to preserve their one-vote majority; last-minute amendments threatened to upend a fragile deal put in place to call a special session; protesters wanting Gov. Mark Dayton to veto bills filled the Capitol; top leaders shuttled between private meetings with the governor in the hopes of keeping the whole thing from unraveling.

Messy as it was, by early Friday lawmakers had finished their work. It stretched on for 75 hours, but they did manage to pass a $46 billion state budget. In doing so, they likely avoided a state government shutdown, which would have happened if they didn’t strike a deal before June 30. They also passed a package of tax cuts and nearly $1 billion bonding bill. On Friday,  Dayton said he’s reserving judgement on all of the spending bills until he gets a chance to review them over the weekend, even though many of the bills were the result of painstakingly slow negotiations with his administration.

“They’ve had five months,” he said. “We deserve three days.” 

Amidst all of the chaos, there were some things that got done. Here’a a look at the major issues and policies that made it through the session (and the four-day special session) — and a few that didn’t:

Tax cuts, but no ‘opportunity scholarships’
Republicans came into the 2017 session with big plans for the state’s $1.65 billion budget surplus, the largest being a package of tax cuts worth more than $1 billion. Dayton wanted far less spent on tax cuts, and what they ended up with was somewhere in the middle. The final $650 million package passed in the special session includes a reduction in Social Security income taxes; property tax cuts for small businesses; reductions in the state’s estate tax; some local government aid and tax breaks to help construct a new professional soccer stadium in St. Paul. Senate Tax Chairman Roger Chamberlain said it was one of the largest tax relief packages in years. “We wanted more and the citizens of Minnesota needed more, but it was better than nothing,” he said. To get the governor’s agreement, Republicans dropped a quest to pass “opportunity scholarships” — or “vouchers,” according to Dayton — that provided tax breaks to those who provide scholarships to low-income students at private schools.

Speaker Kurt Daudt
MinnPost photo by Briana Bierschbach
Speaker Kurt Daudt

Funding for roads and bridges, but not so much for transit
There were few talks of a gas tax hike this session, and only a brief discussion about raising license-tab fees. In the end, legislators tapped the state’s $1.65 billion surplus to pay for a $300 million boost in funding for road and bridge projects. There was still plenty of controversy with the bill. Initial proposals left a shortfall in the budget for Metro Transit, which runs bus lines in Minneapolis and St. Paul. The final compromise bill includes $70 million more for mass transit, but it puts no new funding into the program in the future. That means cuts or fare increases could still be ahead, transit advocates say. In order to get a deal, the bill also dropped a handful of controversial changes to the governance of the Metropolitan Council, a regional planning agency. Instead, the bill requires the agency to report on things like agency costs and future light rail line expansion. 

More money for schools — and an agreement on teacher licensure
The tax proposal and the transportation bill used a large majority of the budget surplus, but much of the remainder went to Dayton’s top priority: More spending on schools, from preschool classrooms all the way up to higher education institutions. The final bill included a 2 percent increase on the per-pupil education funding formula each year over the next two years and $50 million in new funding for Dayton’s signature pre-kindergarten initiative and other school readiness programs. As part of the deal, the Legislature also passed a new version of a teacher licensure overhaul (which Dayton had previously vetoed). The higher education budget will also increase by $210 million over the next two years, with $106 million of that funding going to the Minnesota State system and $54 million going to the University of Minnesota. Democrats criticized the latter figure as a “punitive” move by Republicans — punishment for a previous controversy over using human fetal tissue in research.

A ban on banning plastic bags, but no other pre-emption
Top lawmakers were negotiating down to the final hours of the 2017 session — and of the special session — over “pre-emption,” a bill to stop local governments from passing their own minimum wage and labor laws, separate from state standards. As part of the final agreement, Republicans said they would not attach pre-emption to any budget bills, and they didn’t. However, the bill they sent to Dayton included not only pre-emption, but pensions and wage theft provisions as well as paid parental leave funding for state workers — all things Democrats support. 

Republican Speaker Kurt Daudt said the provisions were related to pre-emption, but the deal sweeteners didn’t work. In a statement, Dayton said it was “unconscionable” that the issues had been tied together, but he promised to veto any bill that included pre-emption. In the end, however, the governor did agree to one proposal: A policy passed in the jobs and economic development budget bill that blocks local governments from setting policies to ban plastic bags in stores. That cancels out a ban about to start in the city of Minneapolis. 

Real ID deal — and provision barring immigrant driver’s licenses
It only took 12 years to do it, but Minnesota is finally going to comply with the federal Real ID Act. First passed in 2005 by Congress, the act required enhanced security standards for driver’s licenses. Over the years, the federal government went state-by-state to get them all to comply, but Minnesota held out. Early on, lawmakers had concerns about data privacy, but in recent years, compliance was held up over a political tussle over whether Department of Public Safety should be able to grant driver’s licenses to undocumented immigrants. Current law doesn’t explicitly allow the department to do so, but it doesn’t ban it either, a change Republicans wanted. In the end, the Real ID bill passed without the immigrant language, but as negotiations continued behind closed doors, it popped up inside the public safety budget bill. Dayton has said he will sign that bill as part of a global compromise deal — a decision that led protesters to fill the lobby of his office during the long hours of the special session.

Senate Majority Leader Paul Gazelka
MinnPost photo by Briana Bierschbach
Senate Majority Leader Paul Gazelka

No money for legislator pay raise
The state government budget doesn’t include extra funding for the House and Senate to accommodate a $14,000 pay increase recommended by a new, independent Legislative Salary Council in March. The council was formed last fall after voters overwhelmingly approved a ballot initiative to do so. The idea was to take the job of raising legislator pay out of legislators’ hands, but the council still recommended the raise. The House and Senate haven’t seen a bump in their $31,000 salary since 1999. Daudt was the most vocal opponent to the increase, trying to work with legal counsel earlier in session to block the increase. It was a small line in the massive state budget that seemed like a minor deal as lawmakers were wrapping up a deal, but it could prove troublesome. Several outside groups have threatened to take legislators to court if they don’t allocate the raise as prescribed by the Constitution. Senate Majority Leader Paul Gazelka has assured legislators he will try to figure out a compromise. “We will fight for that next year,” he said. “It’s needed.”

Premium relief and reinsurance, but no MNsure repeal
Early in session, Republicans and Dayton struck major health care compromises to provide relief for people who saw their health care premiums skyrocket last year, as well as a $542 million reinsurance plan pushed by Republicans, which shields insurance companies by putting the state partially on the hook for more expensive claims. A special board would decide what percentage the state and insurance companies would pay.

Dayton didn’t sign that bill because he had problems with using state general fund dollars to pay for the program, but he allowed it to go into law without his signature. Another top Republican priority, repealing the state’s health insurance exchange, MNsure, didn’t move forward this year, however. Dayton opposed the measure and vetoed an earlier health and human services budget bill that included the provision, saying it was foolish and costly to undo it without clarity about the fate of the federal exchange.

Nearly $1 billion in building projects
A  bonding bill almost didn’t happen — again. Late Friday night, Senate Democrats protested language they said Daudt added to the bill at the last minute to block the paving of a trail in Bloomington. In a statement, Senate Minority Leader Tom Bakk said the trail is “adjacent to land of a number of wealthy Minnesotans.” Democrats refused to vote for the bill if the DFL-sponsored provision wasn’t included, and for many, it brought back memories of last session, when a similarly-sized bonding bill fell apart in the final moments of the session over the addition of a single light rail provision. But after a frantic hour of negotiations, Daudt agreed to include the paving language, and the bonding bill passed with GOP and DFL support in both chambers. The bill is heavy on road and bridge projects along with other projects sprinkled around the state to get the support it needed to pass (bonding bills require a 3/5ths majority to pass in both chambers). 

Sunday liquor sales, but no omnibus liquor bill
In March, legislators surprised many longtime Capitol-watchers and voted in favor of lifting Minnesota’s 159-year-old prohibition of selling alcohol in liquor stores on Sunday. It took years for supporters to chip away at opposition, but the grassroots effort to pass Sunday sales complicated the debate over a broader liquor bill. In particular, liquor stores argued against a handful of provisions that would have expanded the sale of growlers out of craft breweries and bottles of liquor out of distilleries, arguing they’d compete with main street retailers. Disagreements over those provisions between the House and Senate halted movement on the liquor bill, but some provisions ultimately cropped up as amendments to larger budget bills. A proposal to allow bars to stay open until 4 a.m. the weekend of the 2018 Super Bowl in Minneapolis was added to the tax bill at the last minute. The state government bill allows distilleries to be open on Sundays and for breweries to sell more growlers and distillers to sell more bottles of liquor for customers to take home. A proposal to allow more breweries to sell growlers, however, did not pass.

Gov. Mark Dayton
MinnPost photo by Briana Bierschbach
Gov. Mark Dayton

No June primary or provisional balloting, but funding for election equipment
Though there were several ideas to change the state’s election system included in bills from both the House and Senate, the proposal that was ultimately sent to the governor’s office was fairly status quo. It does include something local governments wanted: $7 million more to replace aging voting equipment. But when the bill made it to the floor, there was no longer a House provision to bump the date of the state’s primary from August to June, nor was there a controversial proposal to create a provisional balloting system in the state. That’s because there’s generally a higher bar for bipartisan compromise on elections bills, which Dayton has said he won’t sign without votes from Republicans and Democrats. Republicans also backed away from their move to eliminate the state’s political contribution refund program, which offers people a refund for a donation of $50 to a candidate of their choosing. Dayton pushed back on the move, which was set up to try and thwart big money in campaigns, and it was removed from budget bills.

No Internet privacy protections
Despite passing with major bipartisan votes earlier in session, a provision to put limits on internet service providers selling customer data ultimately didn’t survive the session. It wasn’t for a lack of trying: Democratic legislators like Rep. Paul Thissen and Sen. Ron Latz tried to amend the provision back into various bills in the final days of session. But after initially supporting the move, Republican legislators said they need time to study the issue before passing any laws. 

Data practice commission extended, but no other changes
The state government finance bill extends the Legislative Commission on Data Practices and Personal Data Privacy, which was established to study issues relating to government data, personal data privacy rights and to review proposals that impact on those areas. But a package of data privacy proposals, including requiring local governments to retain emails for at least three years, didn’t gain support after opposition from local governments and state agencies. A proposal to study how to make Minnesota legislators compliant with the state’s open meeting and Data Practices Act also didn’t pass.

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Comments (10)

  1. Submitted by Frank Phelan on 05/26/2017 - 09:53 am.

    Shocking Behaviour

    It is absolutely shocking that Speaker Daudt would circumvent the will of the voters on legislator pay. What an elitist he is.

    And to think he wants to be governor.

  2. Submitted by Richard Callahan on 05/26/2017 - 10:29 am.

    Here’s a practical question

    How does the property tax reduction for small businesses affect those businesses that lease their space, as many do?

    • Submitted by Mike martin on 05/27/2017 - 11:05 pm.

      It depends on where the business rents space. If the business rents space in the IDS tower, then effectively there is no impact on the RE taxes. If the business rents space in a smaller building or a builiding in Greater MN then the property taxes will got down.

      NET rent If you landlord bills the business separately for RE taxes, then the business will see a reduction in that portion of the rent.

      Gross rent. If RE taxes are included (buried) in the business’ rent and the business has a lease, the rent stated in the lease will not change. The business could attempt to negotiate lower rent when the lease is renewed.

  3. Submitted by Ray Lewis on 05/26/2017 - 11:15 am.

    Property tax reduction in tax bill

    My sleep deprived memory recalls the statement that large foreign corporate landowners would be able to reduce the rent/lease costs to small businesses in places like IDS or MOA. Part of the savings for small business property owners could also be applied to employee wages and benefits since labor shortages will shift the scales.

    Senator Bakk was recommending the Governor veto the tax bill since tails and one time spending costs could put future budgets in structural in-balance. Fiscal conservatives don’t know the impact of federal budget debates, the economy is likely to go down again some day, and the biggest budget item depends on demographics as much as policy; our health care access funds have been drained while the medical care provider tax as source of revenue will sunset.

  4. Submitted by Gene Nelson on 05/26/2017 - 12:06 pm.

    Tax cuts

    Generally when we see tax cuts from repubs,there is a pittance for everyone but the elite who gets the majority of it. I really don’t trust the repubs to have done this one any differently, but I’ll have wait for the final reviews.
    We have a MAJOR need for investment in our infrastructure, but for the most part, repubs want to borrow for it? Why…when we have a $1.65 billion surplus…and then we’re giving a tax cut when we need money for education, college, vocational school and healthcare, but a tax cut is the repub priority?

  5. Submitted by John Ferman on 05/26/2017 - 12:25 pm.

    Tax Surplus

    One factoid never mentioned was the portion of the 1.65 billion sueplus came from Sales Taxes. Giving back to income taxpayers does not benefit those whose incomes are too low to be liable to real $$ income taxes. These folks are not immune to sales taxes. So the GOP legislature really benefits the Aristocracy.

    • Submitted by Richard Callahan on 05/27/2017 - 12:41 pm.


      I don’t see what sales tax has to do with it. There was a billion dollar tax increase two years ago that affected wealthy individuals and small businesses. It was about a 25% increase in the rate if I remember right.

      Since then there has been about a billion dollar surplus each year which argues to me that this increase wasn’t necessary.

      Cutting taxes for the wealthy and small businesses would simply be reversing the old increase. Cutting taxes for others would be a form of income distribution. It’s a matter of opinion as to which is fair and right, and reasonable people will argue either way.

      • Submitted by Ross Reishus on 05/28/2017 - 01:07 pm.

        new bracket absolutely necessary

        The new upper end tax bracket was created to address the recurring and kicked down the road needs of replacing bridges, upgrading existing roads, and playing a wildly uneven catch up game with long frozen budgets of public defenders, state courts, health and human services (and their necessary expansions), and finally, public education at all levels. The 2-years schools, known as MNSCU have been hung out to dry for over a decade (since 2000, basically – this from one of the heads of finance in the system), i.e. almost zero new monies to keep things going. Meanwhile Repubs keep having a fitful mostly silent war with the U of M system, holding back appropriate funding increases as hostage to their refusal to support medical research on fetal tissue. Research that actually saves lives, yet the “pro-life” party refuses to support it…THEN there’s the k-12 system, which, by virtue of simply staying alive, while its neighboring and former rivals Iowa and Wisconsin systems have been gutted, and the test scores show it, now reigns supreme in the midwest, only because of Governor Dayton’s fervent efforts to block bogus “opportunity scholarships” i.e. renamed vouchers to have tax payer dollars go to private schools instead of public, and also his efforts to at least, if not increase, at least hold harmless the current amounts going to public schools. And by current, we mean 2001 dollars. Because even with the meager increases, the over all k-12 budget is behind, based on the cost of living, by about 16 years. REGARDING “income distribution or re-distribution” = No one gets rich by themselves. They get rich off of the toil and labor of others who get a pittance by comparison. Taxing the rich is the way to fix that. If company CEO’s paid themselves far less and shared it with the workers, then the argument could be made to raise taxes on the workers instead. But in 2017, CEO’s have all the money. Currently half of the planet’s money/net worth, to be exact, and like the game of Monopoly, the economy only keeps working if CEO’s put some money back into the economic machine. Reasonable people will see the truth, while others will re-write their own truth to support the bubble they live in and disregard everyone else.

  6. Submitted by Clara Walter-Marchetti on 05/29/2017 - 09:15 am.

    higher education question

    Did the funding for paid six weeks family leave for faculty in the Minnesota State (formerly called MNSCU system) remain in effect or is it included in the removal by Republicans?

  7. Submitted by Bill Willy on 05/29/2017 - 01:25 pm.

    Dangerous, contagious, spreading in Minnesota

    If you haven’t read Eric Black Ink’s article from last Friday, it’s a good one:

    “Has the conservative mind become ‘diseased’? Conservative Michael Gerson thinks so

    “The conservative mind has become diseased.

    “That’s a pretty strong statement, and I wouldn’t expect anyone with conservative inclinations to take my word for it. But those aren’t my words. It’s the headline of Michael Gerson’s most recent column in the Washington Post . . .”

    If you’re one of the few who was able to tune-into and stick with public television’s coverage of this year’s end of session and “special session” proceedings you got a pretty good look at, and (nauseous) feel for, how far that disease has progressed in the conservative mind in Minnesota.

    It’s an overused word, but “unbelievable” doesn’t quite cover it.

    Absolutely NOTHING happened during “regular business (and public viewing) hours” during the last days of the regular session, and an even MORE bizarre version of the same thing happened during the two or three “special sessions” that took place, starting last Tuesday.

    ALL of the most important bills (and their last minute Republican amendments) were “debated” on the House and Senate floors sometime around midnight and beyond on ALL occasions. And the list of “unbelievable” things contained in those bills is impossible to list in less than a ten-page post.

    For brief and random example:

    — Did you know there was a last minute, 35-page “small cell network” amendment tacked onto Pat ‘ALEC’ Garofalo’s Jobs and Energy omnibus bill that forces ALL MN local governments to relinquish control over the “public right of way” (the fancy term for YOUR community’s taxpayer-owned property) to telecommunications companies?

    (And, by the way, when it comes to what the MN Constitution has to say about the limits of omnibus bills, can anyone tell me what “small cell” telecommunication networks — in large population centers — and usurpation of statewide community-owned property rights has to do with either Jobs or Energy?)

    — Did you know Republicans (led by Kurt Daudt) refused to provide funding for the Constitutionally mandated legislative pay rates voters approved last November?

    (Is it now okay for MN legislators to disregard voters and violate the state’s Constitution, or what?)

    — Did you know the “Jobs and Energy” bill also contained an amendment designed to gut the provisions of MN law passed in the mid 1990s that established the Renewable Energy Fund and dictated the spending involved . . . a long hard compromise (and set of promises) that was worked out between the legislature, the Native American community and Excel Energy related to nuclear fuel storage at Monticello and Prairie Island? . . . Did you know that amendment was the same bill that was passed by the House and Senate but vetoed by the Governor earlier in the session?

    And those are just three of HUNDREDS of examples of the kind of pure conservative “poison pistons” built into in this year’s Republican bills.

    Just three of the more obvious symptoms of the disease Michael Gerson, the conservative, is talking about.

    If you think the things Republicans have put on the Governor’s desk would be good for Minnesota you need to make an appointment ASAP to find out if you’re afflicted by it.

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