With the adjournment date for the 2018 session a week away, it’s the final lap for lawmakers before the focus turns entirely to the fall campaign. It might not surprise close followers of the Legislature, but all of the dominant issues from taxes to school funding still need to be sorted out.
At the top of the to-do list for lawmakers is conforming Minnesota's tax code with the new federal overhaul. The conference committee hashing out the tax bill has been clipping away. On Friday evening, the House and Senate negotiators, predominantly Republican, announced they had agreed on a way to cut taxes for most people and hold nearly everyone at least harmless.
DFL Gov. Mark Dayton has not signed off on the deal, so there's work left to do.
The conference committee agreement would cut tax rates in the first and second income tax brackets. The first bracket's rate is 5.35 percent now and would dip to 5.3 percent for the current tax year and drop again next year by a fraction of a percent.
For the second tier, it's a dip from the current 7.05 percent to 6.95 percent initially and more ahead. Those rate cuts would produce some savings for taxpayers but cost the state treasury $137 million to start and more into the future. There is also a cut to the corporate tax rate and reductions in other business taxes.
On another big outstanding issue, the House plans to vote on its bonding bill Monday.
The bill calls for more than $1 billion in construction work paid for through various kinds of debt. These bills mainly get measured based on the general obligation debt, which are the bonds issued with the full faith and credit of the state. In that respect, the House would sell $825 million in bonds. But the bill they’ll try to pass will also rely on transportation bonds backed by gas tax revenue to pay for some local road and bridge repairs.
Generally, the House plan focuses heavily on a few things: Repairing existing facilities within the prison system, on college campuses, the state zoo and in the state parks system. But there is also money for flood mitigation, for wastewater facility upgrades and that would foster affordable housing construction.
The roster includes things as small as $100,000 to fix up the Litchfield Opera House to as much as $30 million for a new visitor center at Fort Snelling.
There is some overlap with Dayton’s proposal in terms of where money would go, but it’s a fraction of the size so some allocations in the focus areas would be less as well.
The House and Senate bonding bills are almost identical in size, but they differ on the mix of projects.
The Senate plan is slightly more generous when it comes to higher education, regional mental health crisis center grants and with armory repairs. The Senate bill also provides for three new veterans homes; the House has a different funding stream for those. The House has more going toward transportation projects and asset preservation.
Meanwhile the top item on Dayton's wish list is a one-time infusion of new money for schools. He wants $138 million to provide schools $126 more per student. That, he says, could help avert layoffs and program cuts.
Last week, Dayton visited schools around the state to draw attention to the recent proposal. So far the Legislature has provided no indication the money will come through. But they need Dayton’s support on their priorities to make them law, so it's possible there’s a bargain to be had.
Other than that, the governor says lawmakers should pass a public pensions fix, a bonding bill, an opioid response measure and a bill to provide more elder care protections.
State government is only halfway through the two-year budget enacted last spring, so there’s little that lawmakers have to accomplish by the end of the election-year session. But it could cause headaches for people filing their taxes next year if they don't enact tax conformity, and it would be up to a new governor and the Legislature to decide what to do next year.
Under the constitution, Sunday is the final day lawmakers can pass a bill. They can meet next Monday, but that will be for any retirement speeches or any session wind-down.
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