Terri Bonoff

Legislative Session Focused on Balancing Budget, Growing Jobs

My colleagues and I returned to St. Paul this week to kick off the 2010 Legislative Session. I felt a deep sense of pride and gratitude as I sat in the Chamber yesterday for our first session. We have so much to be thankful for in Minnesota. Even when times are incredibly tough I am thankful for the freedom we have and the quality of life we experience. I thank you for the privilege to serve you in the Minnesota Senate. Please stay in touch with me and my assistant, Jon Eichten, in the coming months and do not hesitate to let us know if we can be of help.

Recognizing the struggling job market in our state, our focus this session is on balancing the state's budget and growing new jobs in Minnesota.  In November, Minnesota finance officials released the state's most recent economic forecast, which showed the state facing a projected $1.2 billion budget shortfall in the current two-year budget cycle.  The report states that lower-than-expected income tax revenue - caused by the still sluggish economy and high unemployment - is responsible for this shortfall.

Even more troubling, the forecast showed the fiscal problems for the state will only worsen in the next biennium.  During the 2011 Legislative Session, lawmakers are expected to face a budget deficit of $5.4 billion.

Senate leaders have said they expect to move very quickly in the session to pass a substantial spending-reduction bill to help address the projected deficit. It is my hope that, in addition to focusing solely on cuts, members on both sides of the aisle can find common ground on the need for our state to reduce the costs of government services by re-examining the way we do business and make a strong commitment to innovation and reform in the delivery of services moving forward.

In addition to tackling the state's long-term budget challenge, the Legislature will be moving quickly to pass a series of bills aimed at jump-starting the state's economy.  This includes:

• A bipartisan capital investment package that will make statewide investments in colleges and universities, transportation projects, and other public infrastructure. The bill would put thousands of Minnesotans back to work during the upcoming construction season, take advantage of favorable contractor costs and support long-term economic development in every region of the state.
• A series of bills designed to spur private investment in the state, including an angel investment tax credit that would offer tax incentives to angel investors who provide capital to start-up companies in emerging industries, such as the biosciences and renewable energy.
• A broader jobs package, supported by labor and business organizations, designed to stimulate the state's vertical construction industry, which includes construction and rehabilitation of residential, commercial, and industrial infrastructure.

Many of these job-creation initiatives will be unveiled early in session, and the Senate expects to pass its capital investment package by the second week of February.

The legislative session, which begins Feb. 4, must adjourn on or before Monday, May 17.

Capital Investment and Jobs Package Proposed

With countless skilled Minnesotans in need of work, the Minnesota Senate made job creation its first order of business, opening the first day of the 2010 Legislative Session by unveiling a $999 million capital investment package.

This legislation was developed after members of the Senate Capital Investment Committee traveled thousands of miles throughout Minnesota this past summer and fall, visiting 64 of the state's 87 counties and holding more than 150 meetings to get firsthand views of projects for which funding was being sought. There were more than $3 billion in capital investment requests made, meaning that this bill is able to fund less than one-third of what was requested by state agencies and local units of government., The Governor has put forward a smaller bonding package and it is my hope that we can work together to reach consensus without the Governor resorting to  his veto power.

In many of these meetings, it was stressed that with the economy in recession, this is an excellent time for new construction at significant savings to taxpayers, as the cost of building materials and labor has dropped considerably. For example, a major construction project at Bemidji State University for which $15 million was budgeted, is expected to cost just over $12 million when finished.

I was pleased that a Shared Facilities Grant Program that I had proposed was included in the Capital Investment bill. This program will allow three or more municipalities (cities, counties, school districts) to apply for bonding dollars from the state for construction or renovation of a shared facility that can demonstrate cost savings for the participating municipalities. I believe that our state must innovate and move in the direction of greater cooperation between units of government to reduce costs; this program is a step in the right direction.

The bonding bill is expected to be heard by the full Senate on Monday, Feb. 8.

School Aid payments Withheld

The Minnesota Department of Education just recently notified school district officials across the state that school aid payments would be delayed this spring in order to buffer the state's cash flow problem based on an unusual statutory provision. The announcement was made to school districts on Jan. 26. Minnesota Management and Budget Commissioner Tom Hanson warned earlier in January that the state would invoke a never-before-used Minnesota law, passed in 1986, to cover Minnesota's negative cash balance.  The aid withholdings were calculated on a formula based on districts' fund balances or reserves. Total aid to be withheld in March and April is $423 million.  This action affects 231 of 337 Minnesota districts. The average holdback is $689 per student. This is the second time in less than 12 months that school funding has been used to buffer state financial problems. Last July, the Governor deferred $1.7 billion of committed payments to schools, an action that forced about a third of Minnesota's school districts to borrow to pay educational expenses. I am already carrying a bill to take this deferred payment and put it on the books as a shift. This would set forward a process of repayment rather than risk it being an eventual cut.

I am very concerned by this new precedent being set to borrow from school district reserves and penalize districts for sound fiscal management. Our local school boards and school administrators have worked hard to manage their budgets and secure positive cash reserves. Districts hold money in reserve for financial stability, cash flow, and to maintain their credit rating. Fund balances are often derived using local taxes paid by homeowners and businesses and are intended to pay for education programs and expenses. It sends the wrong message to fiscally responsible school districts that the state would look to their positive cash reserves in order to balance the state budget issues  I joined with Representative Mindy Greiling in introducing legislation to repeal this law and protect Minnesota's school funding in the future.

August Primary Bill Proposed

I have joined with Representative Steve Simon to propose legislation that would move up the date of the state's primary by one month, allowing more time for military and overseas voters to receive and send back their absentee ballots for the general election.

The bill, announced today at a press conference with Republican and Democratic colleagues, moves the day of the state primary from September to the second Tuesday in August in each even-numbered year.  In 2010, this would mean the state's primary election would occur on Aug. 10, rather than the currently scheduled Sept. 14. The legislation would also expand the time available for absentee voting from 30 days to 45 days.

The bill is a product of a bipartisan, bicameral group of legislators that worked with local elected officials over the summer to draft election law changes that would allow Minnesota to conform with the recently-enacted federal legislation known as the Military and Overseas Voter Empowerment (MOVE) Act.  The MOVE Act, signed by President Obama in 2009, is intended to aid the registration and participation of U.S. military personnel and overseas voters.

I will be working with colleagues on both sides of the aisle to get this primary legislation before the Governor early in the session. We need to give local election officials  sufficient time to process these changes and perform the necessary steps to ensure an orderly election season.  I am confident that we can pass this proposal with broad, bipartisan support and begin making it easier for military personnel and other overseas Minnesotans to vote this year.

Have a great weekend,