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Legislative Update

Wednesday, May 23, 2018   (0 Comments)
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Dayton Vetoes Supplemental Budget and Tax/Education Bills

As the 2018 legislative session came to a close, the Republican-controlled legislature was able to pass two priority bills that seemed destined for vetoes: the omnibus supplemental budget bill and a tax reform/emergency funding for school districts bill. At 5 p.m. on Sunday, May 20, mere hours before the midnight constitutional adjournment deadline of the session, Gov. Mark Dayton held a press conference saying that if the bills stayed as they currently were written, that he would likely veto them when sent to his desk. On Wednesday, May 23, Gov. Dayton kept his word and issued his veto letters for the two pieces of legislation.

Supplemental Budget Bill

The 2018 legislative session began with a budget surplus of over $300 million; with a two-year state budget in place as of May 2017 spending roughly $40 billion, the legislature and governor were left to agree on the best way to invest the budget surplus in a supplemental budget bill. In his letter of explanation of the veto of the omnibus supplemental budget bill, Gov. Dayton said it does not do enough to protect elderly people from abuse in care facilities, and does not adequately address the opioid crisis. These were two marquee issues that all sides agreed were top priorities for the 2018 legislature. Gov. Dayton also said that the bill does contain provisions he supports, but there are 51 policy provisions within the bill of which he does not approve. Myron Frans, commissioner of the office of Minnesota Management and Budget, says that the veto of the supplemental budget leaves Minnesota with a budget surplus of $288 million going into next year.

Tax Conformity and Emergency Funding to School Districts

The other major piece of legislation vetoed was a bill that tied emergency funding for school districts to a tax conformity/reform bill. Republican legislators championed the bill as vital for Minnesota taxpayers following the passage of the federal tax bill at the end of 2017. Without a bill conforming Minnesota tax law to changes at the federal level, Minnesotans will be left with a more complicated filing process and the loss of a number of deductions from their income taxes. Gov. Dayton, in his letter of explanation for the veto, said that the tax bill passed by the legislature has “misguided priorities that give tax cuts to corporations and the wealthy over the education of children.” Earlier in May, Gov. Dayton said a budget shortfall required $138 million in one-time funding for school districts in Minnesota in order to avoid staff layoffs, increased class sizes, and elimination of school resources starting in July 2018. Gov. Dayton said he would not consider signing a tax bill unless there was one-time funding for school districts addressing the budget shortfall. The legislature passed a bill that would allow school districts to access $225 million, but Gov. Dayton described that funding as 80 percent existing revenue that schools already have, and the shift in the budget for schools does not address the issue strongly enough.

What's Next?

The Minnesota constitution says that only the governor can call a special session, and Gov. Dayton has already stated he does not intend to call a special session this year; however, he did say that it could be possible to call a special session after the general election to provide tax conformity to make the 2019 tax filing a smoother process. The legislature also sent Gov. Dayton a pension reform bill and a bonding bill that invests $1.4 billion into state-owned infrastructure, which he may sign into law. The actions by the governor and legislators will now be used as talking points for both Republicans and Democrats going into the 2018 election season.

 


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