Minnesota Weekly Legislative Update: Off to the Races

The 2018 Legislative Session kicked off last week on February 20 with the swearing in of one new member in the Senate, Karla Bigham (DFL, Cottage Grove), and one new member in the House, Jeremy Munson (R, Lake Crystal). The session started at a quick pace with the first committee deadline only three weeks away.

Senate Republicans released their session priorities on Monday, which include federal tax conformity, a bonding bill, and a "Caring for People" agenda that includes improving school safety, preventing elder abuse, and fixing the state's driver's license system. GOP and DFL leadership in the Senate have both said they want to see a pensions bill passed this year, too.

This week, more committees began meeting for informational hearings and to start hearing bills. The Tax Committees began hearing overviews on Federal Tax Conformity. This is a discussion that will continue all session.

The February Forecast was released on Wednesday, February 28, as well.

February Forecast

On Wednesday, the Minnesota Department of Management and Budget (MMB) released the February economic forecast. The forecast projects a $329 million surplus for FY2018-19. In November, the forecast predicted a deficit of $188 million. Revenues are 0.8 percent ($353 million) higher than forecasted in November, and spending is 0.4 percent ($167 million) lower than forecasted in November. November estimates included increased state funding for the Children Health Insurance Program (CHIP), but the federal government fully funded CHIP for the next six years.

Although most legislative leaders were predicting a surplus, their predictions were much higher — around $600 million to $1 billion. Governor Dayton said this is good news for Minnesotans but cautioned that the surplus is modest and could change. GOP leaders point to both federal and state tax cuts as the reason for the surplus. DFL leaders credited the surplus to Governor Dayton's leadership and urged caution with spending.

The Forecast supports an $800 million bonding bill. However, Governor Dayton still thinks a $1.5 billion bill is possible. MMB has estimated that a $1.5 billion bonding bill would cost an additional $15-$20 million in debt services. Legislative leaders have indicated a bonding bill closer to $800 million.

Transportation and Transit

There were a number of Transportation Committee hearings in both the House and Senate this week.

The Senate Transportation Committee heard SF2751, authored by Senator David Osmek (R, Mound), this week which would limit the state from paying for operating costs of LRT projects. The Metropolitan Council testified in opposition to the bill saying that if this bill were to pass, they would no longer be able to make changes in service on the Green and Blue lines. The bill was passed and sent to the Senate Floor. Currently, SF2751 does not have a companion bill in the House.

In the House Transportation Committees, no bills were heard, but informational hearings were heard on the Minnesota Tolling Study completed by Minnesota Department of Transportation (MnDOT) last year, Highway Cost and Construction, and current and future transit projects. The Transportation Policy Committee will begin hearing bills next week.

Important Dates:

• March 14, 2018 - State of the State Address
• March 15, 2018 - Governor's Supplemental Budget Released
• March 22, 2018 - First Committee Deadline
• March 29, 2018 - Second Committee Deadline
• March 30, 2018 - Legislative Recess Begins
• April 8, 2018 - Legislative Recess Ends
• May 21, 2018 - Last Day of Session