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With a more than $1 billion surplus, state legislators say the prospect of a government shutdown over the 2016/2017 budget is unlikely.


But it's not going to be a cakewalk, either. That $1 billion may seem like a lot, but it only barely covers spending increases under current law — and there are plenty of people and groups competing for a piece of this relatively small pie for what they argue are deserving issues. 


Senate Majority Leader Tom Bakk and House Republicans are already tempering expectations, saying that spending increases — if there are any — will likely be small. And legislators should expect to see spending cuts in some areas as well.


With a billion-dollar cushion, Gov. Mark Dayton says that he won't propose a general tax increase but will propose new revenue to pay for transportation projects. 


Meanwhile, House Republicans say they want to cut taxes to make the state friendlier to business.  That's a position held by the powerful Minnesota Chamber of Commerce as well, which has suggested reducing the corporate tax and lowering taxes for businesses that pay through their income tax filings. 


Aside from the budget debate, transportation appears likely to be a marquee issue at the Legislature this session. Republicans campaigned on the issue, and everyone agrees that the state's crumbling roads and bridges need to be addressed.


The question is how the Legislature will pay for it. 


Dayton supports a gas sales tax at the wholesale level, as well as a metro-area tax increase for transit projects.


But incoming House Transportation Chair Tim Kelly of Red Wing says that plan will likely fall flat with House Republicans. Some Republicans have suggested tapping general fund dollars for transportation projects or asking the Transportation Department to spend money more efficiently.


But Democrats, including Kelly's DFL counterpart in the Senate, Scott Dibble of Minneapolis, say those proposals won't go far enough to plug the state's $6.5 billion funding gap over the next 10 years. 


The transportation debate will also expose a divide between rural legislators who want transportation dollars to go to basic infrastructure like roads and Twin Cities legislators who want money to go to rail and bus lines.  


Another area of general agreement is the need to close the achievement gap between white and non-white students.


The devil, of course, is in the details. 


In his last State of the State speech, Dayton called on legislators to streamline K-12 testing, an issue that could get some traction among GOP House members who have long opposed excessive classroom evaluations. 


But Dayton also wants to expand a child care tax credit and wants early childhood education scholarships — two priorities that will cost money. 


On higher education, Dayton says he wants to make sure curriculum better prepares students for careers in high-demand fields, such as engineering. 


And Dayton would like to extend a tuition freeze at state colleges and universities. But he may see some resistance in the Minnesota Senate, where Bakk warned that some schools may cut courses to make up for the financial shortfall.


On the campaign trail, Republicans pledged more scrutiny of the state's health insurance exchange, MNsure. Some legislators have called for a change in MNsure's board leadership, while others are raising questions about how much insurance costs on the exchange and whether a consultant hired by the state to study the economics of the exchange violated his contract. 


Meanwhile, Republicans have also said they would like to 

, an issue important to outstate Minnesota, where the population tends to be older.  


Last February, a federal judge warned that the state's sex offender program is unconstitutional. And in late 2014, a federal court-appointed task force 

  that recommended individual evaluations for locked-up sex offenders and urged that the state's civil commitment law be applied only to the most dangerous. 


The task force is the result of a class action lawsuit filed by some in the program who say the law is unconstitutional. The trial is set for February.


The Legislature failed to take action on the issue last session. The question now is whether it will make changes to the law based on the recommendations or wait for the court to act.  
Dayton and Bakk have said they want to move on the issue. 


But Rep. Tara Mack, R-Apple Valley, who will chair the Health and Human Services Reform committee this year, 

 that she's wary of doing anything before the court makes a decision.  


"The risk we take in crafting legislation is potentially putting something into a bill ... prematurely, prior to the court's ruling," Mack said. 

Catharine Richert

Author

The governor and legislators will have a chance to see how far they can stretch a billion-dollar surplus.

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