April 05, 2019

Minnesota Legislative Update: House Transportation and Transit Proposal Released

This week, House finance committees unveiled and passed DFL proposals to fund state government over the next biennium. Because of the lack of movement in the Senate on key House policy priorities, finance bills also became home to a number of policy proposals, including paid family and medical leave, earned safe and sick time, criminal background checks on all gun sales, a measure preventing individuals subject to extreme risk protection orders from possessing firearms, and a public health insurance option on the individual market.

On Wednesday, Governor Tim Walz delivered his first State of the State address calling on legislators to resist political gridlock and work together the final six weeks of session to move the state forward. Instead of elaborating on legislative priorities, Governor Walz spent most of his address sharing unity-inspiring stories of Minnesotans and highlighting his education, transportation and health care budget priorities.

This coming Monday, the House plans to release its omnibus tax and capital investment proposals. The Senate is also expected to release and begin considering its budget proposals next week.

House DFL Transportation and Transit Infrastructure Proposal

On Tuesday, House DFL leaders released their transportation and transit infrastructure proposal. In many respects, this proposal mirrors Governor Walz’ proposal unveiled last month. Key elements of the House transportation and transit funding proposal include:

  • Five-cent annual gas tax increase for four years (20 cents over 4 years). Revenues are constitutionally dedicated to transportation and would raise roughly $600 million for FY2020-21 biennium and $1.1 billion in the next biennium. Governor Walz proposed a 10-cent annual increase for two years.
  • Half-cent sales tax increase in the seven-county metro area for transit – estimated to raise roughly $400 million for FY2020-21 and $591 million for FY2022-23. Governor Walz proposed a one-eighth cent sales tax increase in metro area.
  • Increase license tab fees and change the depreciation schedule – estimated to raise $461 million in FY2020-21 and $650 for FY2022-23. Governor Walz proposed similar measure.
  • Restore the statutorily dedicated sales on auto parts to the general fund. Governor Walz proposed this same measure.
  • Raise the motor vehicle sales tax to 6.875% to align with all other sales taxes. Governor Walz proposed this same measure. Tax currently at 6.5%.

On Wednesday and Thursday, the House Transportation Finance and Policy Division debated and passed the DFL proposal on a party-line vote. House DFLers pointed to poor and worsening state roads, bridges and transit service to justify the need for new revenue while Republicans believe that the price tag — approximately $1.3 billion in tax increases — is too high.

In addition to revenue enhancements, the bill includes a significant number of policy proposals, a $10 million appropriation in 2019 for the reimbursement of deputy registrars adversely impacted by MNLARS, a reallocation of the leased motor vehicle sales tax, and $1.9 million to expand Metro Mobility service. The bill also restores the statutorily dedicated sales taxes on auto parts and repairs to the General Fund.

On Tuesday Senate Republicans debated the tax and fee increases contained in the Governor’s transportation and transit proposal and voted them down. The Senate plans to release their funding proposal next week.

Employment Issues Advance

This week, the House Jobs Committee released, walked through, marked-up and passed their omnibus finance bill (HF2208) on a party line vote. The 237-page bill includes the funding for the Department of Employment and Economic Development, Department of Labor and Industry, and Department of Commerce. The bill has also incorporated the bill language from HF5 (Paid Family and Medical Leave), HF6 (Wage Theft), and HF11 (Paid Sick and Safe Time) HF2208 will be heard on Monday in the House Ways and Means Committee.

The Senate Jobs Committee did not meet this week. They will meet on Monday with a plan to walk through their bill, hear public testimony, take amendments, and pass the bill my Monday night. The big differences between the two bills will be that the Senate will include uniformity language which would preempt local jurisdictions from adopting their own minimum wages and other worker benefits and it won’t include the Paid Family Leave and Paid Sick and Safe Time included in the House bill. Both bodies have been working on their own language to address Wage Theft.

Important Dates

  • April 12, 2019 – Third Legislative Committee Deadline
  • April 13-22 – Legislative Break
  • May 1, 2019 – All Finance Bills Passed Off House/Senate Floor
  • May 6, 2019 – Fiscal Targets Agreed to and Provided to Finance Bill Conference Committees
  • May 13, 2019 – Conference Committee Reports Due to Original Body
  • May 20, 2019 – Last Day of the Legislative Session
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