Legislative Update: Lawmakers pick up negotiations on key topics

MN Capitol

State legislators returned to St. Paul from their annual Spring Break this week to open House-Senate negotiations on the state budget, taxes and other issues, including several bills that impact corn farmers and agriculture. Prior to the Easter/Passover break, the Minnesota Corn Growers Association (MCGA) took the lead in organizing a media outreach effort to raise awareness of key ag issues and urge farmers and rural residents to contact legislators during the break. The MCGA effort generated dozens of media mentions across Minnesota, including an editorial commentary by MCGA President Harold Wolle that appeared in several papers, news stories and radio interviews.

One prominent news story this week noted that, “rural lawmakers said they heard loud and clear during a holiday break that farmers want buffer law changes” and “the buffer issue was what they heard about the most.” MCGA urged farmers to talk to legislators about needed improvements in the water buffer law, including moving back the implementation date to next year, as well as the urgent need for farm property tax relief and finally approving a transportation finance plan this year.

Bills emerging from conference committee negotiations must gain approvals from both houses before moving on to the Governor’s desk. The process becomes very delicate because policymakers must balance the desires of fellow lawmakers but also consider provisions that will be necessary to gain the signature of Gov. Dayton to become law. In some cases, a compromise may not be attainable.

TAX BILL

The State has not enacted an omnibus tax bill since 2013, when Gov. Dayton approved the creation of a fourth tier of income taxation that would help eliminate the state’s $6 billion budget deficit. This year, with more than $1.6 billion in projected budget surpluses in the next two-year budget cycle, legislators now want to provide tax relief – the question being how much and from where should the tax cuts come.

The House bill calls for more than $1.3 billion in tax relief while the Senate measure makes room for $900 million. The Governor’s budget proposes approximately $191 million in tax relief. Legislators will need to work hard to negotiate a compromise with members of the Dayton administration to craft a tax bill that the Governor will sign.

One important property tax relief provision found in each tax proposal will hopefully survive the negotiating process. The agricultural property tax credit for levies used to fund new school buildings was part of a tax bill that Gov. Dayton vetoed (for unrelated reasons) last year and it has bipartisan support again this year. Support for the farm property tax credit could even become a catalyst for other agreements.

TRANSPORTATION

The Legislature and Governor could not come to an agreement last year concerning a transportation funding bill. While Republicans and the Dayton administration appear to be far apart on proposals again this year, a solution may be possible.

Legislation passed by the house, for example, calls for moving $450 million in existing taxes and fees from the state’s General Fund and placing it into roads and bridges. In addition, the House bill calls for approximately $1.3 billion in bond financing over the next two-year budget cycle. The Senate transportation bill proposes much less debt – $325 million – but also moves approximately $400 million in General Fund revenues to pay for transportation needs. Neither the House nor the Senate bill propose any gas tax or other fee increases, and neither provides more support for metro light rail projects.

In contrast, Governor Dayton has said he wants to sign a bill that raises the statewide gas tax and increases vehicle tab fees to help pay for needed road and bridge projects. He also wants to raise the metro area’s sales tax to better fund transit and light rail projects. During recent media interviews, however, Dayton has indicated an understanding that a gas tax hike may no longer be viable and, despite his opposition to removing money from the General Fund, he may have to “swallow” the legislation to obtain a much needed transportation bill.

BUFFER LAW IMPROVEMENTS

Another conference committee is working on the omnibus Environment and Natural Resources Appropriations bill that would, among other things, modify the duties of the Environmental Quality Board, enable project proposers to develop their own draft environmental impact statements (EIS) and prohibit regulators from enforcing unadopted rules.

Regarding water buffers, conferees must determine whether to approve language that would delay implementation of the law to 2018 or 2019. Language that must also be finalized could modify definitions of public waters and alter the required width of buffers accordingly, and forbid enforcement of the law unless federal or state assistance is available to the landowner for 100 percent of the cost to establish the buffers. Governor Dayton has said on more than one occasion that he opposes any changes in the water buffer law, so this issue will likely be part of a “macro negotiation” involving the Governor and legislative leaders.

MAKE YOUR VOICE HEARD

Many of Minnesota’s farmers have been busy getting ready for this year’s planting season and may not have had the opportunity to contact their legislator or the Governor’s office to voice their opinion about ag-related issues. MCGA recommends that you contact your state senator and representative by email to express your opinions about these key issues. You can contact your House and Senate member by clicking here. To contact Gov. Dayton, you may use this online form. The voices of farmers do make a difference!

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