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

Messy as it was, lawmakers finished their work by early Friday, likely avoiding a state government shutdown.

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.
Minnesota House of Representatives Public Information Services

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.

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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.

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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.