May 25, 2007

End of Session Minnesota Legislative Update

As the 2007 legislative session ended, the Minnesota House and Senate passed the final budget bills to fund state government, jobs and economic development, health and human services, higher education, transportation and E-12 education, as well as a tax bill. Deliberations continued until the final hour, concluding at the constitutional deadline of midnight Monday, May 21, 2007.

The bonding bill and the constitutional amendment to dedicate a 3/8% sales tax increase for wildlife habitat, water, arts and cultural programs failed to gain approval prior to adjournment. The House attempted to override the governor's veto of a major transportation funding bill, but fell 7 votes short of the 2/3 majority needed.

The traditional "global budget agreement" was never reached between the House, Senate and governor. Instead, the House and Senate passed the tax and finance bills, tailored in response to prior veto messages, that they believed the governor would sign. The governor has indicated he will sign the budget bills, although he will probably line-item veto some provisions within the bills. He has the authority to line-item veto portions of bills that have a direct appropriation tied to them.

The governor is likely to veto the tax bill passed on the last day of session. One contentious issue included in the bill requires automatic inflation adjustments in forecasted state spending which the governor has long opposed as an "automatic increase" in state spending.

Despite the possible veto of the tax bill, it does not appear the governor will call the Legislature back for a special session. Although the Legislature did not succeed in all of its initiatives and the governor was not entirely satisfied with the outcome, the bills needed to fund state government were passed. The governor and Legislature will have another opportunity to address the biennial budget when the Legislature reconvenes on February 12, 2008. 

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