Terri Bonoff

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State Senator Terri Bonoff discusses her fight for reforms in state government.

Dear Friends,

We have completed the 2010 Legislative Session. It was a tough one to experience as a State Senator. It was so complicated. If you recall, we began the session thinking we had to solve a $1.2 billion dollar deficit. The Governor proposed to solve this by cutting and banking on $432 million of federal medical assistance money.

The legislature accepted this proposal, although many were skeptical about counting on the federal dollars. We enacted legislative cuts that would close the gap providing the federal dollars came. In addition we passed the bonding bill, with a lot of controversy as to the appropriate amount. It is my belief this controversy stemmed from the public mistrust of borrowing that is a result of our current economic situation as well as concerns in the public regarding deficit spending on the federal level.

We then went about the business of putting together our various budget and policy bills. Because of the Race to the Top initiative, much of the public focus was on education policy. I have written extensively about that, so in closing I will add my final regrets. I deeply regret that politics carried the day in education policy. Watching lawmakers be completely hamstrung from special interest pressure was the toughest experience I have yet had at the State Capitol. I was frustrated last year over my inability to overcome resistance to the shared services proposal, yet this was even tougher, because the cost of not passing this weighs heavily on our most vulnerable, the at-risk youth. If we had passed the education reforms that cleared our Senate Education Committee, I am confident we would have had an extremely competitive application for Race to the Top. Yet, by passing none of these initiatives, we are essentially precluded from applying. The cost of doing so would be wasteful, given our lack of progress.

I pledge to you that I will learn from this setback, come right back at this next year, and find a way to enact these reforms.

Toward session end, we finally got word on the un-allotment court case. Our budget problem went from a manageable deficit to a political windstorm. We needed to come to an agreement on $3 billion dollars in less than two weeks. I am proud to say that we did that. Some will lament our final agreement, on both sides of the political spectrum. I do not. I say congratulations to all who sat at the table and all who voted for the final solution. It was not perfect. It borrowed too much. It didn't allow us to take advantage of federal dollars that are deservingly ours, and it did little to put us in a stronger position for tomorrow. I believe the unwillingness to access these federal dollars lies in the ideological opposition to federal healthcare reform. I wish we had been able to get past this opposition, but our compromise solution left that door open for tomorrow. We found a way for all involved to live with a solution that was within our tolerance.

Reaching compromise is not easy. Perhaps this is a perfect example of what we are looking for from all of our leaders. We must each fight for our values and our principles without ever losing sight of our constituents. I know that, by all of us pushing as hard as we could for our values and beliefs, the tolerable solution evolved. I believe you, our constituents, were looking for us to come together and get our work done on time and with as little harm as possible. We did that.  This year the process was complicated by the upcoming election season. Governor Pawlenty possibly running for President, the Speaker running for Governor and each of us on the ballot this fall shaped how we viewed things and how we voted. I look forward to starting fresh next year, should I have the privilege of being back, and having a lot more room to set this ship on a course that creates a healthy and strong future. Thank you to the many who let me know each and everyday what you think. I am lucky to represent such an engaged and active community. This will be my final update of the session. As I am running for re-election, I hope you will not be surprised to see me at your door sometime soon. Have a great summer!

Sincerely,

Terri E. Bonoff

Pictured above are all members of the 2010 Minnesota Senate.

2010 Legislative Session Recap

Balancing the Budget

In the final hours of the 2010 Legislative Session, after several days of good-faith negotiations, the Minnesota Senate passed and sent to the Governor a balanced budget that does not raise taxes and adopted more than 95% of his own recommendations.  However, the bill did contain the early adoption language for medical assistance that the Governor objected to, so a compromise was necessary before a final budget deal could be reached.

The final budget bill that was passed ratified the school district state aid payment delays, including the property tax recognition shift, put into place last summer by the Governor.  While the state had currently delayed payments on a 90/10 basis, the Governor's proposal paid districts only 73% and delayed the remaining 27%.  The bill went one step further and delayed payments another 3%, setting the payment shift at 70/30, saving an additional $208 million on the bottom line. The Governor technically did not have the authority to make the shift; only the Legislature had such authority.  So the action last summer simply mimicked the shift. The bill also made Minnesota's cash flow mandate a permissive provision.  The law which passed in 1986 and allows the state to borrow money from school districts to cover Minnesota's negative cash balance was used for the first time this year.  The aid withholdings would be calculated on a formula based on a district's fund balance.

The final budget bill also included $13.298 million in General Fund cuts to Transportation for the FY 2010-11 biennium.  This bill reflected the Governor's previous unallotments, plus an additional $10 million in General Fund cuts.  This additional reduction was allocated to transit in both the metropolitan area and Greater Minnesota.

The Motor Vehicle Sales Tax (MVST) is performing far above what was projected at the end of the 2009 Session, providing transit millions more this year from this source.  These dollars mitigate effects of the General Fund cut upon the workers and senior citizens who rely on transit.

The majority of the end-of-session budget-balancing bill contained cuts to Health and Human Services.  For the current biennium, the measure ratified $155 million of the over $200 million in unallotments the Governor made last year.  Over $42 million in unallotments are extended through the next biennium.  These include reducing the number of hours a personal care attendant can be reimbursed from 310 to 275 hours/month, suspending rate adjustments for long-term care facilities and implementing a 1.5% rate reduction to non-primary care providers and a 3% rate reduction to specialists.

There is a $40 million loan from the Health Care Access Fund to the General Fund in FY 2011 that is paid back in FY 2012.  The bill also has a $35 million built-in contingent appropriation to higher education financial aid if federal funds for Medical Assistance come through.

Capital Investment Package

One of the first and most important priorities of the 2010 Legislative Session was passage of comprehensive capital investment legislation designed to create much-needed jobs while providing for vital infrastructure. According to the Governor's administration, Minnesota had the debt capacity to fund $1.8 billion in infrastructure improvements.  Minnesota is on very sound fiscal footing when it comes to funding public works, ranking just 42nd in the nation in debt per capita, according to the Tax Foundation.

After much negotiation and many tough decisions, a package worth $680 million became law in March.  Experts estimate that the package could still create more than 16,000 jobs in Minnesota.  By investing at this time via bonding, jobs will be created at a vitally-important time.  And with the cost of building materials and labor low, Minnesota taxpayers will see significant savings.

Education

Omnibus Education Bill

The 2010 Omnibus Education Conference Committee Report, which combines provisions from both the Senate and House bills, failed to be passed into law this session. In the final days before adjournment, the House and Senate did come together on a compromise omnibus bill that left out all Race to the Top reforms. However, after it became clear that disagreement with the Governor regarding a House provision to allow districts to renew operating referendums for six years without voter approval would produce a veto of the bill, we in the Senate chose to send it back to conference committee for further negotiation. Unfortunately, the House and Senate were unable to reach agreement prior to session end. In an unusual twist, we did reach agreement with the House and the Governor after the midnight deadline. Because it was after the deadline and during our one day special session, there had to be a suspension of the rules for the bodies to vote on the bill. The House Republicans voted against suspending the rules and the motion did not pass, as suspension of the rules requires a two-thirds majority. Because the Senate felt so strongly that a bill ought to be passed, and despite the failure in the House, we brought up the compromise bill as a Senate File and passed it in our body unanimously.

The bill contained various charter school reforms that will bring transparency to state laws regulating charter school building leases and building ownership as well as various fund transfers and an alternative facilities provision for the Wayzata School District that would have allowed Wayzata to use existing levy dollars for building renovation and repair. I was very discouraged that we were unable to get this done for Wayzata.

Early Childhood Education

We passed into law this session an Early Childhood Education Bill that I authored that expands the state's Early Childhood Advisory Council and directs the council to appoint a task force that will make recommendations for an Office of Early Learning. Discussion of a cabinet-level office focused on early learning has been ongoing the past few years.  Funding for a new office has been a major stumbling block.

Special Education Charter Schools Cash Flow

Charter school officials directing schools that have fewer than 150 students and are 100% special-education students may request that the commissioner accelerate cash flow.  If that request is made, the commissioner must accelerate payments, although the acceleration cannot exceed 90% of total payments.

Jobs and Economic Development

Jobs Stimulus Bill - Angel Investor Tax Credit

The Senate passed a Jobs Stimulus Bill in March with strong bipartisan support - a piece of legislation aimed at putting Minnesotans back to work, lowering the unemployment rate, and stimulating the state's economy so there are more and better jobs in the future. The bill focused on a variety of tax incentives and benefits intended to support new and existing Minnesota business, while capitalizing on the state's growing bioscience and high-technology industries.  I am a coauthor of one significant piece of the bill, the Angel Investor Tax Credit, which is expected to create up to 6,300 jobs annually at an average wage of $49,000/yr. according to the Department of Employment and Economic Development.

A tax credit equal to 25% of a taxpayer's investment is available to investors in small Minnesota businesses involved in high-technology, bioscience, and green manufacturing industries.

Minnesota Entrepreneur Resource Virtual Network (MERVN)

I chief authored a bill signed into law this session that directs DEED to raise private funds for the Office of Entrepreneurship and Small Business Development to develop and maintain a virtual network of resources that are available for new Minnesota business ventures and entrepreneurs.  The resources would assist entrepreneurs by establishing a one-stop shop listing of services the state can offer in helping them develop their businesses.

Minnesota Science and Technology Authority Act

Further enhancing the state's commitment to leading the nation in biosciences and other high-technology fields, legislation that I coauthored was enacted that would create the Minnesota Science and Technology Authority.  It creates a permanent authority structure that takes on economic development for the state by driving the leadership governance model between academia, business, nonprofit, labor, public, and private sectors.  The authority would develop and implement comprehensive plans for science and technology economic development strategies for the state.  The authority would coordinate public/private efforts to get federal funding for R&D projects that could benefit small to medium-sized businesses in Minnesota.

Study of State Regulation Affecting Small Business Start-ups

Having a complete understanding of the condition of Minnesota's business climate and how it relates to our neighboring states is vital for lawmakers when deciding where to focus scarce resources and what programs can be most effective in attracting and retaining businesses.  The Legislature passed a bill this session to fund a comparative study to look at the effects of state regulations on costs and delays in starting a small business in Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota, as well as the typical costs that go along with businesses in the retail, manufacturing, and services industries.  The study will be conducted by a state higher education institution, and will serve as a guide for future lawmakers as they outline the state's economic development strategy.

Energy, Utilities, Technology and Communications

High-Speed Broadband Goals

Legislation was passed establishing a goal that the state of Minnesota has statewide broadband access as soon as possible, but no later than 2015.  According to the bill, the service will provide, at minimum, download speeds of 10-20 megabits per second and

upload speeds of 5-10 megabits.  This legislation was developed by the Ultra High-speed Broadband Task Force, which was a group put together by the Legislature and Governor to identify the broadband needs of Minnesota.

Kelsey Smith Act

The Senate passed the Kelsey Smith Act.  This bill requires wireless providers to tell law enforcement where an individual is when law enforcement notifies the company in writing that the individual is in a life-threatening situation.  This legislation also states a cause of action could not be brought against a provider for giving law enforcement this information.

Kelsey Smith was 18-years-old when she was abducted and murdered in 2007.  For four days, her parents and police asked her cell phone company to hand over the "ping" records that show the location of a cell phone.  They were able to locate Kelsey's body within 45 minutes once the company gave them the information.  Similar legislation has been passed in Kansas and Nebraska and is being considered elsewhere.

Ratepayer Protections

The Legislature passed a measure stating ratepayer funds cannot be used to pay for a utility's travel or entertainment expenses unless they are deemed to be necessary for the delivery of service in Minnesota.  This determination could be made by the Public Utilities Commission as part of the company's rate case.  This legislation was developed in response to Xcel Energy's recent electric rate case where the company asked to use ratepayer funds to pay for a Board of Directors' retreat, international travel, and leasing of private aircraft.

Environment and Natural Resources

Outdoor Heritage Fund Appropriations

The funding recommendations of the Lessard-Sams Outdoor Heritage Council are appropriated by the Legislature.  A total of $58.9 million is appropriated in 2011 to 24 projects in the following categories: Prairies ($18 million); Forests ($5.6 million); Wetlands ($16.9 million); and Fish, Game and Wildlife Habitat ($17.6 million).

• About 5% of the Outdoor Heritage Fund is set aside as a reserve to manage cash flow and forecast error;
• Collectively, the projects protect 16,471 acres (7,715 easement and 8,756 fee acquisition) and restore 4,709 acres; and
• Each state dollar leverages $0.63 in non-state matching funds

Clean Water Fund

Groundwater Monitoring: $4 million is redirected from the Minnesota Pollution Control Agencygroundwater activities to the Department of Natural Resources, for an 11-county metropolitan area groundwater monitoring network and automated data system.

Board of Water and Soil Resources Programs: $100,000 is appropriated for a "micro-grants"pilot program to engage citizen volunteers and to match private sector resources to complete projects with long-term water quality restoration or protection benefits for lakes and rivers. $400,000 is appropriated for the purchase and restoration of permanent conservation easements on riparian buffers (land adjacent to streams and rivers). $400,000 is appropriated for grants to watershed districts and watershed management organizations for water retention projects.

Health and Human Services

Also included in the final budget balancing bill was the Omnibus Health and Human Services Finance Bill that had been passed but vetoed. There were an additional $114 million in cuts to the DHS budget for the 2010-11 biennium and $155 million to the 2012-13 biennium. The bill raised $166 million in additional revenue for the bill through increased surcharges on hospitals, HMO's, and long-term care facilities (ICF/MR).

Nursing homes

Suspension of rebasing of nursing facility costs are continued through the end of FY

2013.  The Senate had included this provision, but also had a surcharge increase and an MA rate increase.  These were not accepted by the conference committee.

Hospitals and providers

The conference committee report includes a 5% increase in MA rates to in-patient hospital services for FY 2011.  In FY 2012, this increase is reduced to 1.96%.  The increase in the surcharge is from 1.4% to 2.63% from July-October 2011, and 2.3% after October 2011.  It delays rebasing of hospital rates to January 1, 2013.  It includes a 5.5% cut to rates of specialty providers, but does not affect mental health services.

HMOs

The bill includes an increase in the surcharge to HMOs from .6% to 1.12%.  A new surcharge is instituted on county-based purchasing plans of 1.12% starting October 1, 2010.  The money from this new surcharge is put into the Health Care Access Fund rather than the General Fund.  There is also a reduction in payments to managed care plans under MinnesotaCare that reduces their rates by 15% for adults without children over 75% of the federal poverty guideline.  It is expected that plans will make additional revenue with elimination of the GAMC program.

GAMC and Medical Assistance Early Enrollment

The final budget balancing bill contained a provision that would help Minnesota take advantage of the unique opportunity to enroll adults without children making less than $8,000 a year into Medical Assistance (MA). The bill language establishes the authority to early enroll but gives the authority to the Governor beginning January 2011. This was the compromise arrived at on the final bill. Currently, Minnesota spends $1.2 billion every biennium on health care coverage for single adults below 75% of the federal poverty guideline.  Early enrollment into MA means the federal government will pick up 50% of the cost for all these individuals.  By spending an additional $189 million over the next three years, Minnesota will draw down $1.4 billion in federal revenue.  This is a $7.45 return on our investment.  Starting in 2014, the federal government will cover 100% of the health care costs.  The benefits under Medical Assistance are more comprehensive than current state-run programs.  The reimbursement to providers and hospitals is higher and will help them provide better care at a fairer price.  Last session, the Governor vetoed all funding for the state-funded GAMC program.  A restructured program was put in place that cut reimbursements by over 70% and limited benefits under the program.  Hospitals and providers have said GAMC is now unworkable and shifts too much of the cost and risk of providing care.  They fully support the early-enrollment option and believe that it will relieve the financial stress and help hospitals provide a higher level of care.  The early-enrollment option will help Minnesota cover 20,000 more uninsured individuals than currently receive health care.  This will help people receive early and preventive care and rely less on more expensive emergency room care.

Commerce and Consumer Protection

Oral Chemotherapy

The Legislature passed a measure prohibiting health insurers from charging a higher co-payment, deductible, or coinsurance amount for an orally-administered cancer treatment than an intravenous or injected treatment.  This legislation also stated an insurer would be in compliance with this section if they did not include orally-administered cancer medications in the fourth tier of their pharmacy benefit.

Liquor at the University of Minnesota

The Legislature passed a measure allowing the sale of alcohol in the University of Minnesota's football stadium's premium seats as long as it is also available for purchase in at least a third of the general admission seating area.  The measure also required that at least 75% of the revenue from the alcohol sales be used to fund scholarships.

Transportation

Ignition Interlock/DWI Sanctions

The Legislature passed a bill which will make Minnesota roads safer by strengthening DWI sanctions through the expanded use of the Ignition Interlock Program.  Under the bill, DWI offenders could choose to either drive with an ignition interlock device installed in their vehicle or be without their driver's license for a full and increased revocation period.  An ignition interlock device prevents a car from starting unless a driver successfully blows into a "breathalyzer" device.  This would ensure that these offenders were driving sober.  It also provides a means for these offenders to have their driving privileges legally reinstated - which is safer for the public than having them drive without a valid license.  Offenders would be responsible for paying the costs of being on the Ignition Interlock Program of about $100 month.

Enhanced Driver's License

Legislation was passed that will allow Minnesota to provide the option of an enhanced driver's license (EDL).  Travel documents are now necessary for U.S. citizens to cross the Canadian and Mexican borders.  An EDL would look the same as a traditional driver's license, but include an embedded radio chip to denote the driver as a U.S. citizen.  This will allow them to reenter the country at security crossings - providing a lower-cost option to obtaining a passport.

Illegal Window Tinting

A bill making it a misdemeanor to sell windows or windshields with illegal glazing materials was passed.  This corrected current law which makes it a petty misdemeanor to drive a vehicle with illegal window tinting, but provided no penalty for those selling the tinting materials.

Cell Phone Use While Driving

The Senate Transportation Committee recommended passage of a bill I authored which prohibits cell phone use while operating a motor vehicle, unless the phone is used in hands-free or voice-activated mode.  However, because the House of Representatives did not pass similar legislation, this bill was not advanced this year.

Judiciary and Public Safety

Gang and Drug Oversight Bill

A bill to address problems that arose after the investigation of the Metro Gang Strike Force last summer was signed into law.  The new law restructures the Gang and Drug Oversight Council that oversees all of the local or regional multi-jurisdictional task forces, modifies the duties of the council, and addresses evidence handling policies, reporting requirements, and the county attorney's role in multi-jurisdictional task forces. The new law expands the law enforcement use of the Comprehensive Incident-Based Reporting System (CIBRS) through the Bureau of Criminal Apprehension- a system that brings law enforcement information from across the state together in one location and is used as an investigative tool by law enforcement. The new law also creates a new working group under the Bureau of Criminal Apprehension (BCA) with balanced membership between law enforcement and non-law enforcement stakeholders to discuss issues and laws pertaining to criminal intelligence databases.

Seizure and Forfeiture Law Changes

The Metro Gang Strike Force was shut down in July, after a legislative audit and a special review panel found serious misconduct regarding their seizure and forfeiture practices and a lack of financial oversight. In most cases of property forfeiture and seizure, the law is strictly followed by our law enforcement officers, and the only property taken can be proven to be directly tied to criminal activity.  In the case of the gang strike force, a number of individuals were searched and their property was seized with no proof of gang connections or criminal activity, nor were arrests made or charges filed.

A bill to clarify and update Minnesota's forfeiture and seizure laws was signed into law this session that addresses some of the issues raised by the Metro Gang Strike Force investigations last summer.  The bill articulates the rights of people who have had property seized and outlines procedures to challenge the forfeiture proceedings.  The bill makes it easier for people who have had property seized to get their property back if the property had no connection to a crime, and it updates reporting requirements and procedures for law enforcement and prosecutors.