Hello Everyone,
First of all, I would like you to mark your calendars for our two upcoming post-session Town Halls with myself, Rep. Peggy Flanagan and Senator Ron Latz.
Monday, June 5 from 6:00 – 8:00 p.m.
Plymouth City Hall – council chambers
3400 Plymouth Blvd., Plymouth
Monday, June 26 from 5:00 – 7:00 p.m.
The Depot Coffee House
9451 Excelsior Blvd., Hopkins
By now, you know that the legislature did not have quite enough time to get all its work done without going into a special session. A deal was struck as Special Session started right after midnight on Tuesday, Feb. 22. We then broke until 3 p.m. on Tuesday, May 23, to leave some time for bills to be drafted. Non-partisan staff are the true heroes as they continued to work through the night to get the seven remaining omnibus bills drafted.
We came in on Tuesday at 3 p.m. and worked through the night. I caught a few hours of sleep on my office couch on Wednesday before we went back into session. Wednesday night, we left shortly after midnight and we came back in Thursday morning for the long haul until we finished up early Friday morning at 3 a.m.
There were hours of downtime as bills were negotiated, drafted and re-drafted. With hundreds of pages of details, it took Memorial Day weekend for the Governor’s staff to get the full picture of what was all included in the final versions. They included some surprises that were not negotiated and some disappointing provisions that were.
Below is my take on the final bills we heard over the 75-hour special session. Governor Mark Dayton will have until midnight May 30 to decide whether or not to sign the bills or veto them. If the Governor vetoes any bills that fund any of the State departments, we will need to come back into special session to avoid a July 1 government shutdown.
Tax Bill
As a reminder, last year’s tax bill was vetoed by Governor Dayton because of a $100 million error found after it passed the House floor. The bill was around $350 million and I voted ‘yes.’ It was a reasonable amount to spend, but this year’s tax bill, at $660 million, comes at too high a cost; it sets Minnesota up for large deficits in the near future. While this special session tax bill has many good provisions: a small tax exemption on social security, an adjustment in the working family credit, a small student loan credit among other things, it still has a few provisions that are very concerning.
The main issue is the freeze of the State General Levy. This is a property tax commercial and industrial properties pay directly to the State. It was put in place after these properties were given a large tax break years ago regarding school funding. Freezing the inflationary levy leaves a huge hole in our general fund, putting funding for our schools, roads, nursing homes and more in jeopardy. To lower taxes on our businesses, I would have preferred a different approach. I would have voted to exempt the first $200,000 of a business’ income from the state general levy. This would have benefited our Main Street businesses and not the owners of the large skyscrapers in Minneapolis and St. Paul. This bill also removes the automatic inflator in the cigarette tax, giving big tobacco a $30 million tax break. I would have rather seen this money be spent on our kids in their classrooms.
My DFL colleagues offered amendments to strip both of these provisions from the bill. Unfortunately, they failed on mostly party-line votes. If both of these provisions were removed, this bill would have earned my yes vote. We need to adequately fund education, our health care providers and our transportation system before we spend large sums on tax breaks that only benefit a few.
Traditionally a tax bill, while spending money on credits and deductions, is not needed to keep government or the Minnesota Department of Revenue open. But this year, the Republican majority put a provision in the bill that, if the tax bill is vetoed, shuts down the Department of Revenue. This was one of those “surprises” that I mentioned above. It is very disappointing to see this type of subterfuge and gamesmanship being played.
Education Bill
While this bill improved in the area of funding, there is still bad policy in it that had garnered my ‘no’ vote during regular session. Originally, the increase proposed on the general education formula was only 1.5% in each of the two years, well under inflation. During special session the bill increased that to 2% each year. Schools across the state had requested 2.5%; that amount would allow them to keep up with inflation.
Much of the policy that was in the original Education bill was left in the final version. There is still a freeze on Pathway II dollars that help to fund our early childhood programs. And while the bill added money for Governor Dayton’s pre-K, public school for four-year-olds program, it came with a hitch. If a public school decides to fund a four-year-old program, they will need to choose between these dollars or their current school readiness dollars. In other words, it is not really new money.
On the policy front, our high schools currently offer the ACT/PSAT on school grounds during the school day to allow for greater accessibility for all students. This bill continues that program, but the funding for it has been removed. I am also still very concerned with the teaching licensure changes in the bill. While the changes allow districts flexibility in hiring, they have the potential of filling our kids’ classrooms with unqualified teachers who have not taken ANY courses on how to teach or deal with children. The provision that changed how teachers are laid off during budget cuts also remained in the bill. While I was happy to see increased funding on the general education formula, I remain disappointed in the policy provisions included and voted ‘no.’
Transportation Bill
Of all the bills that I was hoping would have substantial investment this year, it was the Transportation bill. We have not had any substantial long term investment in our transportation system except for those made during 2008 and 2013. With the surplus this year, I had high expectations that were quickly dashed. (You can see my comments on the floor by clicking here. Mind you, these comments were made after only a few hours of sleep on my couch.)
The final bill shifted $300 million from the general fund the first two years and that balloons to $447.9 million the two years after that. This is money from auto parts sales tax and other auto related taxes that currently flow into the general fund. The Republicans remove this income from the general fund and shift it to a special account they created to fund roads and bridge maintenance. This pits funding for our schools and nursing homes against road construction and maintenance. The bill also underfunds Met Council by giving them only $70 million in one-time funding to cover their operating deficit causing over a $100 million hole in their budget by 2019. This would cause drastic cuts to our Metro Transit system as well as huge fare increases.
While the language prohibiting cities, counties and rail authorities from spending any money on planning, designing and constructing light rail was deleted, a bad piece of policy language was added. This new provision would prohibit state funds from being used to cover part of the operating costs of Southwest LRT (SWLRT). Currently all other bus, bus rapid transit and light rail lines have 50% of their operating costs covered by the state while the other 50% is covered by the counties in the metro area. With this carve-out, Hennepin County residents will be stuck with 100% of the operating costs for SWLRT. That is a bad precedent to set. Lines like SWLRT benefit the entire metropolitan region, and in turn the entire state. Funding this line should be shared by all who benefit not just one county alone. Because of this language, the future gaping hole in the general fund and the fiscal cliff that Met Council will be driving off, I voted ‘no’ on the bill.
Labor Standards Bill
Throughout the session, this bill has been referred to as the “preemption bill” and has been traveling on its own. It strips away the ability for local governments, duly elected city councils, to set their own labor standards. These standards could include working conditions, wages and sick or paid parental leave. Minneapolis and St. Paul city councils have passed labor standards in the last year that will take effect this summer. If this bill is signed into law, it would retroactively wipe out those ordinances as well as prohibit any other city in the state from putting any labor standards in place for the businesses in their towns. The retroactivity piece would strip the wage increase and paid sick leave put in place by Minneapolis and St. Paul from 150,000 families. I voted against this bill in committee and when it was on the House floor.
During special session, the Republican majority took the language of this bill and added a few other bills to it in order to try and get Governor Dayton’s signature. They added the entire pension bill. This bill had bipartisan support and makes needed changes to our state worker’s pensions to keep them healthy and secure. The pensions bill includes teachers, police, fire, service employees and public employees and has traditionally been passed as a standalone bill. They also added the ratification of the contract for the Engineering Council that has been certified, the memoranda of understanding regarding paid parental leave for state employees (affecting 1,000 families) and language that issues citations and penalties to employers that engage in wage theft.
I join the Governor in his statement that he has made regarding the combination of these bills. “It is unconscionable that Republican legislators would pit the earned financial security of hardworking state employees and retirees against the rights of local officials to make the decisions for which they were elected by their citizen. Nevertheless, I have said that I will veto the preemption bill, and I will honor that commitment”. -- Governor Mark Dayton (May 24, 2017). It is cruel and mean-spirited to play with people’s lives in this way and because of that, I voted ‘no’ on this bill.
State Government Finance Bill
When this bill left the House floor during the regular session, it was woefully underfunded. It made drastic cuts to the agencies that help the state function, did absolutely nothing to update our computer network to make it more secure and had a load of concerning policy. While money was added to the budget so that it no longer decimates our state agencies, it still does almost nothing for cybersecurity. Folks are required to give the State their private data for a variety of things from taxes to driver’s licenses; the least we could do is make sure it is secure. Cyber security specialists have warned that our state systems are vulnerable and receive up to 3 million hits/attempts a day. This bill is over $25 million short of the funds needed to secure our system and I find that completely irresponsible.
During special session, good news came with an amendment to take out language that would make it nearly impossible to approve of any future state employees contracts. But there were other remaining provisions that lead to my no vote. To name a few: funding was removed for the Office on the Economic Security of Women, for the “Mighty Ducks” Program that helps with conversions of public ice rinks and from the Governor’s equity programs to diversify the state workforce. The bill also reneged on the commitment to the Minneapolis Employee Retirement Account.
HHS Bill
When this bill originally left the House floor, it was full of false savings, shifts and gimmicks. The non-partisan Minnesota Management and Budget staff would not even sign off on the spreadsheet for the bill because the numbers did not add up. Not much has changed.
The bill that showed up during special session was 672 pages and cut nearly $500,000 off the bottom-line of the agency’s budget. It also took $350 million from the Health Care Access Fund, which is made up of money collected from a provider’s tax that was created to fund MNCare and programs for our most vulnerable Minnesotans. While the provider’s tax is set to sunset in 2020, there was still money there to help continue funding programs for a few years. This bill depletes that fund down to roughly $5 million. Not a sensible thing to do when uncertainty over federal reforms to healthcare - and how that will affect Minnesota - has led to a time of great uncertainty.
The bill puts little new money into the Child Care Assistance, only slightly increases the MA spenddown income for the disabled and only gives the Department of Health an extra $5 million to fight the measles outbreak. It also does damage in many other areas. It removes some consumer protections currently in statute, it does not provide protection when non-profit HMO’s convert to for-profit, it doesn’t provide any money for drinking water protection or school-linked mental health grants, it gives no increase to MFIP and it shifts millions of dollars of cost onto counties. This shift would cost Hennepin County $10 million alone and would raise everyone’s property taxes.
Our Health and Human Services budget takes care of Minnesotans in every walk of life, from our infants to our seniors, and some of the most vulnerable members of our society. During a time of surplus, we should be doing so much more. Needless to say, I voted ‘no.’
Bonding Bill
This is the one bill that has come the longest way. Traditionally, it is the even number years that a bonding bill is put together. But last year, a bonding bill never made it to the Governor’s desk. So when the regular session started, there was hope that there would be one passed this year. Unfortunately, the House majority showed little interest in putting one together. But the Senate introduced a $1 billion bonding bill along with the Governor’s proposal that topped out at $1.4 billion. With a few weeks left in session, the House put a bonding bill on the floor that totaled only $600 million. It was not regionally balanced and had very few projects in Democratic districts in it. Because of this, it did not get the 60% vote threshold to pass.
With strong negotiations - and the Senate Republicans teaming up with the House Democrats - a bill made it to the floor during the special session in the early hours of Friday morning. It was $990 million, regionally balanced and bipartisan. Even better, it included a project in St. Louis Park that Rep. Flanagan and I brought forth that earned support from many other legislators. The provision provides $600,000 to Perspectives Family Center for the planning and design of their early childhood center expansion. Perspectives is an amazing organization that takes women with children and a history of addiction out of homeless shelters, provides them housing, therapy and help with job training. It was founded in 1976, has an 85% success rate and continues to be a wonderful asset to St. Louis Park as well as the region. I was very happy to see Perspectives included in this well balanced bonding bill and was very happy to vote ‘yes.’
Work Continues During Interim
With regular session and special session complete, I would like to thank you all for your letters, e-mails and phone calls. Hearing your thoughts, questions and concerns are not only important to me but help me to represent you in St. Paul. The next legislative session will start on Feb. 20, 2018 at noon. Please continue to reach out to my office with any issues or questions you may have. The best way to contact me is by e-mail at rep.cheryl.youakim@house.mn or by phone at (651)296-9889.
I would also love it if you would consider having me visit with your neighborhood associations, community groups or invite me on a tour of your local business. It truly is an honor and a pleasure to serve Hopkins and St. Louis Park at the State Capitol, thank you for your trust and support!
Have a wonderful summer!
Cheryl