Global Warming
Apr 15, 2007 News
Well at least our temperatures got a little warmer this weekend. I ended my week visiting the annual Art a la Carte celebration, which included an interesting display of edible art, pottery making and a peace sculpture. I took a pass this year on the "make your own fish print t-shirt" which involves making a print of your very own taking an imprint of the corpse of a hand painted fish.
Saturday, I attended the annual League of Women Voters meeting and heard Northfield City Administrator Al Roder talk about space and facility needs in Northfield. Later that morning I visited the middle school and saw a great quilt show, displaying the wares of local quilt makers and then joined parents and kids for 'YMCA Healthy kids day.'
In the afternoon I tried to join in on the Human Earth project at Carleton's Laird Stadium but arrived just as they were breaking up. Later I heard about another Global Warming awareness event that sounded fun – the StepitUp Bike Rally.
There was a big event at the Capitol Saturday afternoon but I decided to spend my day in Northfield. We are likely to take up the Global Warming issue this week on the floor when the Energy and Environment Bill comes up for debate. I have been getting e-mails and letters about this issue. Many citizens are concerned about it. It came up in discussion at the Chamber of Commerce forum on Friday as well.
Someone sent me the link to the Intergovernmental Policy on Climate Change website, you might be interested in reading some of the information there including a summary of their report.
Another website called Culture Change had a number of different articles including this one the Hydrogen Economy:
The Hydrogen Economy: Energy and Economic Black Hole
by Alice Friedemann
Editor's note: Wonder why you're hearing much more about biofuels
than hydrogen fuel these days? It's because the "Hydrogen Economy"
has been found to be unrealistic. It so happens our author has been
a main factor in sinking the technofix illusion of hydrogen. This
report was first published on Culture Change in an earlier form two
years ago. Once revised, it appeared in various publications and
helped to burst the hydrogen bubble as promoted by George W. Bush,
Jeremy Rifkin and Arnold Schwartzenegger.
[To read this article, go to Culture Change]
The Road to Opportunity
Apr 15, 2007 News
My cousin once told me about a neighbor he had who let the paint fall off the house and never mowed his lawn and wouldn’t fix anything if it broke.
Worse yet, this fellow was loaded with money and just didn’t care what his home did to everyone else’s property value.
It’s kind of like our Governor who thinks letting the roads and bridges fall into disrepair is just fine. He doesn’t mind if someone else will pay for it by bonding so future generations will pay, or push it on to local property taxes, or try to talk contractors into fronting the money for the highway 62 Crosstown project.
As a legislator I’ve listened to constituents, county commissioners, and township supervisors tell me that they feel like they are stuck between raising property taxes or letting things get far worse than they already are.
When I met with my Region 6 MN DOT representative, she said the highway 19 project and the other upgrades just can’t go forward because there just isn’t any money. Rep. Bernie Lieder said that without more investment public transit will have to cut back and MN DOT may run out of funds to keep its doors open.
Over the past 20 years we have seen the conditions of our roads, highways, and bridges deteriorate at an alarming rate, and our transit system struggle to stay alive. Some say we need $1.5 billion invested in our transportation system every year simply to stay ahead of congestion and upkeep on our current infrastructure. The result is Minnesotans pay an annual "congestion tax" of $700 per person in wasted time and fuel. We can’t continue down this path we need a solution that squarely addresses our transportation and transit needs.
Minnesota Congressman Jim Oberstar, the new Chair of the U.S. House Transportation Committee, recently testified that our state is poised to receive $4.3 billion in earmarked federal funds through 2009, but must come up with a 20% state match to receive these dollars. If this match is not met, the money will go to other states. Clearly, we must do something to leverage these federal funds or risk falling further behind in transportation and transit initiatives.
This is why I call our transportation bill ‘The Road to Opportunity Act’. It contains major funding initiatives for roads and transit. It provides property tax relief. It increases public safety. It creates jobs. It strengthens our economy. It saves us millions in maintenance and construction costs down the road.
Doesn’t that sound better that what we have endured lately? Years of under funding and excess borrowing have hurt our transportation system – delayed projects, deteriorating roads conditions, increased traffic congestion, reduced snowplowing and road maintenance, closed rest areas and the shifting of funds from one account to another to make up for cash flow problems.
The House passed the Road to Opportunity Act a couple of weeks ago. The Governor has threatened to veto it. I think you deserve better. It is hard to imagine the Governor wouldn’t want to join us in cleaning up the neighborhood. If you agree with me, let him know how important a first-rate transportation system is to your and your family.
What to do about property taxes?
Apr 15, 2007 News
Under the House Property tax bill 90% of Homeowners will qualify for a reduction in their property taxes.
Over the past five years, property taxes in Minnesota have increased $1.7 billion. Absent action from the legislature, we are poised to see further increases in property taxes – approximately a 9 percent increase in Scott County for homeowners and a 10% increase for homeowners in Rice County. Overall, this would translate into a $600 million increase under current law.
The Governor's plan does not provide much relief. In fact, under the Governor's plan, property taxes would still rise almost $500 million statewide.
The House plan, in contrast, would provide $543 million in property tax relief. This means that every property owner in the state of Minnesota would see permanent and significant property tax relief.
The House plan would provide relief in three main ways.
1) The House plan would provide a direct relief to any property owner who's property tax bill exceeds 2% of their income.
2) The House plan would buys back school levies across the state. In our area this translates into 3 million for our schools.
3) The House plan would also restore LGA and County Aid funding that was slashed over the past few years. Rice County would receive $200,000 in new money and cities in our area would receive over a half million.
Rep. Paul Marquart (9B) gathered citizen suggestions and put them into a bill that delivers significant, permanent property tax relief for every Minnesotan.
The House plan is focused on restoring fairness to our tax system. A recent Revenue Department report says middle-class Minnesotans pay a bigger share of their income in state and local taxes than wealthy Minnesotans.
Minnesota's budget surplus was built on the backs of the middle class. We've paid $2 billion more in property taxes the last four years.
By creating a 4th-tier income tax for upper-income Minnesotans, we are able to pay for significant, permanent property tax relief all around Minnesota. Dollar for dollar, the House plan will restore fairness to our tax system.
Legislative Update
Apr 15, 2007 News
Almost all of the committees have finished up their work in the house and we will begin hearing omnibus bills on the floor this week. I am told we will be on the floor everyday this week including Saturday.
AGRICULTURE, RURAL ECONOMIES AND VETERANS
The Omnibus Agriculture, Rural Economies, Veterans and Military Affairs Finance Bill passed through the committees on Finance and Taxes this week. In Finance, there was no opposition to the bill. In Taxes, the FarmZ provisions were removed from the bill, for later consideration in the Tax bill. Ways and Means is considering the bill Friday morning.
(Similar to JobZ, FarmZ tax incentives include exemptions from the individual income tax, corporate franchise tax, state and local general sales tax, motor vehicle sales tax, and state and local property tax, and a jobs credit. The tax incentives are limited to the portion of the farm that consists of the agricultural processing facility and do not apply to the rest of the farm.)
EARLY CHILDHOOD &K-12 EDUCATION
The Omnibus Early Childhood Bill (HF 6) was split into two parts, so as to align with the Senate bills. (This is the bill now includes my HF5 Bill.) Half of the bill relating to early childhood provisions applies to the Department of Education so it was added to the Omnibus K-12 Finance Bill (HF 6). The other half of the bill, relating to early childhood under the jurisdiction of the Department of Human Services, was added to the Omnibus Health & Human Services Budget Bill (HF 297). The Omnibus K-12 Finance Bill (HF 6) continues to wind through the committee approval process. On Wednesday, the Finance Committee voted 32-2, with 1 abstention, to pass the bill. The Tax Committee passed the bill on a voice vote, with no audible dissent. On Monday, Ways & Means is scheduled to hear the bill.
ENERGY ENVIRONMENT & NATURAL RESOURCES
The omnibus bill (HF 1651) was heard in the Finance, Tax, and Ways and Means Committees. At its first stop in Finance, it was combined with the Energy Bill (HF 1392). Following a Delete All amendment, both bills were inserted into SF 2096, the Senate's Energy And Environment Omnibus Bill.
The Finance Committee spent several hours on the energy and the environment and natural resources bills. One successful amendment deleted a provision that prohibited DNR from renewing or issuing licenses to aquaculture that would raise minnows in public waters that have US Fish and Wildlife Conservation easements attached to them. These easements are purchased with the proceeds from the sale of migratory waterfowl stamps and are designed to protect duck habitat.
The Tax Committee spent four hours discussing most of the provisions of the bill. Three successful amendments remove an increase in the ATV share of gas tax revenues so that it can be included in the tax bill, address a local situation, and incorporate some portions of HF 299 to provide relief to timber sale permit holders in the face of falling timber prices.
The Omnibus bill passed Ways & Means Friday morning. On a roll call vote, the Republican proposal to delete the "let's go fishing" provision – a program to help seniors enjoy fishing on Minnesota's lakes, was defeated.
HIGHER EDUCATION AND W0RKFORCE DEVELOPMENT
The Higher Education and Workforce Finance Bill was heard, amended and passed by the Finance Committee. The bill was amended into two bills that align with the Senate, creating SF 2089 (Tomassoni) Economic Development Finance and SF 1989 (Pappas) Higher Education Finance, which were passed to Taxes.
HEALTH POLICY/FINANCE
On Thursday, the full Finance Committee held a hearing on the Health and Human Services Omnibus Finance Bill (HF297-Huntley). The Committee adopted an author's amendment to make technical changes to certain aspects of the bill, most notably to reallocate mental health funding towards providing improved mental health coverage for the state's health care programs. The biggest change from the previous version was an author's amendment to begin rebasing of nursing facilities' operating rates in 2010 at a cost of $18M ('10/11) and a larger cost in future years. This is important for nursing facilities located in rural areas currently experiencing severe financial hardship.
HOUSING/PUBLIC HEALTH FINANCE
The Finance Committee passed the Omnibus Housing and Public Health Finance Bill this week. The bill appropriates $426 million for programs operated by the Minnesota Housing Finance Agency, the Department of Human Services, the Department of Health and twenty health-related boards. This amount is $17.5 million more than the Governor's recommended spending for these areas, mostly in human services. Of the $426 million authorized in the bill, over half goes to public health programs, nearly one-third goes to housing, and approximately one-tenth goes to human services.
In public health, community and family health promotion programs were the top priorities, with a recommended spending increase of $42.9 million over current levels. Most of this increase is in health support activities for low-income individuals and families. The bill also includes health-monitoring initiatives designed to help discern the impact of chemicals and environmental toxins on human health. A provision requiring a state standard of three parts per billion for atrazine in drinking water was taken out of the bill during Finance Committee debate.
In housing, the bill increases funding for homeownership programs by $41.6 million — $8 million more than the Governor proposed. The bill also funds a University of Minnesota project to develop a predictive model for identifying properties at risk for foreclosure.
PUBLIC SAFETY FINANCE
The Public Safety Omnibus Bill was heard in both the Finance Committee and the Tax Committee. Only minor amendments were made to the bill, including author's amendments.
The Finance Committee adopted an author's amendment that established a working group to study the appropriateness of additional regional forensic crime laboratories and regional crime strike task forces; appropriated money for background check training for mentor programs; permitted any political subdivision to apply for funds to establish a safe cab program under the Crime Victim Fund; and added several mental health screening provisions.
The Tax Committee passed an amendment (adopting Senate language) making it a misdemeanor for a scrap metal dealer or agent, employee or representative to intentionally violate any of the scrap metal dealer provisions in the bill. The author of the original House bill supported this amendment.
STATE GOVERNMENT FINANCE
The Omnibus State Government Finance Bill (HF 953/SF 1997) passed out of the Finance and Tax Committees this week.
TAXES
This week, the Tax Committee heard several bills related to corporate taxes and subsidies, eight Omnibus Bills, and several other miscellaneous tax bills.
The committee spent four hours on Tuesday hearing testimony and debate on several bills that would close Foreign Operating Corporation (FOC) loopholes. The former Commissioner of Revenue under Rudy Perpich testified that when the FOC provision was enacted in the 1980's, the crafters of the legislation never intended for it to be used as a mechanism for shielding income from taxation in foreign corporations, as some companies have done under the current law. Supporters of closing FOC loopholes argued that current law rewards aggressive accounting tactics and hurts businesses that don't engage in them.
The committee also heard four hours of testimony on bills that would provide subsidies to Thomson West (HF 1138 and HF 2129) and the Mall of America (HF 2237). Supporters of the Thomson West proposal argued that the proposed expansion would create 2,000 jobs with an average pay of $70,000 a year. The St. Paul Building and Construction Trade Council testified in support of the bill, stating that the project would create 350,000 work hours for construction workers.
Construction trade groups also expressed support for the Mall of America (MOA) proposal. MOA proponents argued that the mall brings tourists from around the country and world who spend money in Minnesota.
Some members expressed concerns about the Thomson West and MOA bills. Members questioned whether it was appropriate for the state to provide subsidies to corporations. Art Rolnick, Director of Research at the Federal Reserve Bank of Minnesota, argued against providing public subsidies to private companies. Mr. Rolnick argued that investing in the labor force, through increased investments in education, provided a much higher return for the state.
WAYS & MEANS
Ways & Means sent the Environment and Energy Finance, Ag and Vets Finance and Public Safety Finance bills to the General Register on Friday.
If you are interested in what some other blogging legislators are saying about
the session you might check out
Rep. Paul Gardner and Rep. Jeremy Kalin.
Back to School
Apr 7, 2007 News
I went ‘back to school’ for a few hours and talked with students in Kevin Dahle’s civics classes and one of Ron Nuebel’s Sr. Soc. classes. They shared with me some of their thoughts about what we in the legislature should be focusing on. I shared with them my voter survey, which you can download and fill out if you wish. (You’ll find a pdf of my voter survey by clicking here – print it off, fill it out and mail it off to me.) Most of the students, not surprisingly thought that more funding for education would help keep their class sizes down. They have been hearing from their parents about increasing property taxes. It was fun to interact with them and listen to their thoughts about what might be important in state government. Mr. Dahle indicated some have them had been working on bill proposals for an e-democracy project.
Let’s Invest in Infrastructure
Apr 7, 2007 News
Spring is on the way and with warmer weather comes a reprise of the age-old joke that Minnesota has only two seasons: winter and road construction. The unfortunate truth, however, is that Minnesotans will probably see more potholes that orange cones on our roads this summer. That’s because Minnesota chronically under-funds our transportation system. In fact, we shortchange our roads and bridges $1.7 billion annually.
That number is so big it's hard to put it in perspective, but the consequences of this immense shortfall are felt all over the state. In the past five years we've seen increased gridlock on decaying roads. Project after project has been delayed for lack of funds. Meanwhile, money has been shifted from one account to another through accounting gimmicks to make up for cash flow problems. Rest areas have been closed and the state has cut back on snowplowing to save money. Federal matching grants are in danger of going unused because the state can't fund its portion of the project. The Governor even tried to convince contractors to start work on the Crosstown project before MNDOT had the money to pay them. Imagine if you tried to convince your mechanic to fix your car for free. It really is embarrassing how deeply the situation has deteriorated.
The breakdown of our transportation system effects the everyday lives of Minnesotans in countless ways. Each minute we waste in traffic is a minute that could be spent with our families. And though you can't put a price on quality time with your family, you can put a price on the millions of dollars of gasoline Minnesotans use each year as they fight gridlock.
Our decaying transportation system also has a negative effect on the economy because businesses suffer from increased costs. Not just this, but companies looking to relocate in Minnesota might think twice if their transportation costs are significantly more expensive here than in other states.
Most importantly, our transportation system is a matter of public safety. Each year, many people needlessly die or are seriously injured due to traffic accidents caused by poor road conditions.
The Governor's response to this crisis is a proposal to bond for $1.7 billion over ten years. This proposal is unacceptable for two reasons. First, it only addresses ten percent of the problem – Minnesota is short $1.7 billion every year. Second, bonding for transportation means we are putting the bill on the state's credit card, meaning we'll waste hundreds of millions on interest.
The bottom line is we must do something and we must do something now. Each year we put off investing in transportation we waste tens of millions of dollars as construction costs only go up. Minnesotans deserve to have a first rate transportation system. The health of our economy and community depend on it.
A Progress Report
Apr 7, 2007 News
This week the 2007 Legislative Session hit its midway point, and I am happy to tell you that I have been very pleased with the work we've done at the Capitol so far. After a sea-change election last fall creating a new DFL majority in the House, we set a demanding set of goals for this year. House Democrats promised to work together with Republicans on the issues that matter to the people of Minnesota: education, health care and property tax relief. At this point, I can say that we've made progress on that promise.So far, this has been a session marked by civility and compromise. The first major bill to pass into law was a Renewable Energy Standard; landmark legislation designed to reduce our state's dependence on fossil fuels. The legislation had been controversial in the past, but we worked together with advocates and stakeholders and came up with a bill that eventually won overwhelming support in both the House and Senate and was quickly signed into law by the Governor.
That bill, which would be the crowning achievement of any other session, was passed in February. Since that time we've been working hard to deliver on many other issues. The House passed both a transportation bill and a capitol investment bill in March. In years past these bills have typically been passed in May. But we worked hard to finish these bills early in an effort to avoid another divisive, costly special session.
In the past few weeks we've also unveiled our education plan, which invests almost a billion dollars in new money into our schools and provides for all-day Kindergarten for every Minnesotan. This bill renews our commitment to making Minnesota the nation's education leader.
We've also proposed a health care bill that will drive down costs and increase access to our health care system. The centerpiece of this proposal is a plan to provide all children with access to quality health care.
Neither our education bill nor our health care bill increases taxes.
Finally, we proposed a way to provide significant, fair and permanent property tax relief to every Minnesota property owner. The bill contains over a half billion in property tax relief, which contrasts to an expected $600 million property tax increase if we do nothing. To pay for this bill, we propose a new income tax bracket for couples making over $400,000 in a year.
Overall, if our plans become law, we'll see important new investments in our education, health care and transportation systems along with significant property tax relief.
Who is being pushed away from the table?
Apr 7, 2007 News
This week the non-partisan House Research Department issued a stunning report that forecasted huge property tax increases in 2008. Statewide, the increase will total over $600 million, making it the largest property tax increase in Minnesota history.
The increases look even worse in Greater Minnesota. In Rice County, homeowners could see their property taxes rise by as much as 12 percent, while property owners in Scott County can expect an 8.5% increase. These numbers compare to a statewide average increase for homeowners of 6.5 percent.
Of course, this isn't a new phenomenon for Minnesota property owners. They've been dealing with huge property tax hikes for the last several years. In fact, property taxes have increased a whopping $1.7 billion since 2002. Keep that in mind the next time someone tells you that we've been balancing the budget without tax increases over the last 5 years.
The truth is that even though local governments levy property taxes, its budget decisions made at the state level that are driving these massive increases.
Minnesotans decided long ago that they didn't want to use property taxes to be the primary source of revenue for government programs like education, public safety and transportation. Property taxes, they knew, are especially hard on seniors, young families, farmers and small businesses. More significantly, using property taxes as the primary funding source for these programs creates a quality gap between the property rich areas in the suburbs and the property poor areas out state.
To address these issues, we shifted funding to the state level and started using a statewide income tax. It may seem rather boring, but at the time it was revolutionary. It was even called the Minnesota Miracle.
For decades, Minnesota has operated under this model. Local governments kept property taxes increases low because the state provided a stable source of funding for education, public safety and transportation. But in recent years, the state has not kept its part of the bargain.
In the late 1990's the state enjoyed record budget surpluses, and we cut income taxes. But when the economy soured and the state went into deficit, lawmakers decided to balance the budget without raising taxes.
As a result, the state did not increase education funding at a rate that kept up with cost increases. They even cut education funding for the first time in Minnesota history. That decision led to dozens of property tax raising school levies all across the state. The state also cut Local Government Aid (LGA), a program that helps local governments pay for police, fire and other services. Starved of state funding, local governments turned to property taxes to pay for these essential services.
During the campaign, I promised that property tax relief would be one of my top priorities if I were elected. The news that record property tax increases are on the horizon has only hardened my resolve. In order to secure significant, permanent and fair property tax relief, we need to return to the system that worked so well in the past. We need to restore state funding to education, local government aide and transportation. Sound investments will make sure w all have a place at the table.
Examining The Forecast
Apr 7, 2007 News
Earlier this week the February budget forecast was released and while news reports have indicated that the state will enjoy a $2.2 billion surplus over the next biennium, it is important for the people of Minnesota to realize that this surplus isn't as big as it appears.
There are several reasons why this is the case. Most significantly, recent budget forecasts did not account for inflation. Several years ago, inflation was taken out of the budget formula in an accounting gimmick designed to help eliminate the deficit. This is a bad accounting practice that leaves the state with fictitious budget forecasts and creates unrealistic expectations.
Another billion of the surplus is one-time money left over from the last biennium, not a continuing amount that we can depend on in the future. As you can see, after we account for inflation and take out the one-time money, we don't have much of a surplus at all. For this reason, I think that we must approach this small surplus with fiscal restraint.
We may not have the huge surplus that some thought we did, but we are not in deficit either. The good news is we will not have to make any of the budget cuts that have characterized recent sessions. We do, however, need to have a serious conversation about where our priorities lie as a state.
The budget outlook may not be as bright as some would have you believe, but I still believe that we can improve our schools, reform our health care system, and provide significant property tax relief. While these are not easy tasks, I am certain that this new legislature is up to the challenge.
Other aspects of the February forecast were more troubling. January's employment statistics were revised to show that the job market was actually flat. In addition, the forecast showed that housing starts have continued to decline, confirming that the housing market is slowing down. Both statistics indicate trouble for the economy.
In order to combat an economic slowdown, the Legislature should invest in the things that make Minnesota attractive to business and create a climate that will promote job creation. This means investing in our schools – as a highly educated workforce has been the secret to our success as a state. It also means investing in our transportation system, so business can move their goods and employees don't waste time and money in long commutes. Finally, it means stemming the rapid increase in property taxes by passing permanent and fair property tax relief.
The February forecast doesn't contain all the answers, but it does give us a clear picture of where we stand as a state. As has often been said, everyone is entitled to their own set of opinions, but not their own set of facts. Now that the facts are in, we can work together to solve the problems facing Minnesota and make the investments that will guarantee Minnesota's success far into the future.
