State Budget Forecast Shows $329 Million Surplus
On Tuesday, Commissioner Myron Frans and the Office of Minnesota Management and Budget released the February budget forecast showing the state with a projected budget surplus of $329 million for the remainder of the biennium. This is a significant increase from the $188 million deficit projected last November. The February forecast provides guidelines with which the legislature will craft any supplements or changes to the 2017-18 budget.
The more than $500 million swing for Minnesota comes as a result of a number of changes made at the federal level in recent months. These changes include the passage of the Tax Cuts and Jobs Act of 2017 as well as the reauthorization of the Children’s Health Insurance Program (CHIP). Federal funds from CHIP alone are estimated to have saved Minnesota approximately $250 million. Those changes, when coupled with increased individual tax receipts and lower-than-projected spending, result in the forecasted surplus.
Governor Mark Dayton intends to release his supplemental budget proposal on March 15, the day after he delivers what will be his final State of the State address.
House & Senate Tax Committees Hear Presentations on Federal Tax Reform
One of the primary issues for the Minnesota Legislature to address during the 2018 legislation session is tax conformity. Following the passage of federal tax reform, Minnesota’s legislators have significant work to do as they attempt to avoid an estimated increase in tax receipts of approximately $850 million in the 2017-18 biennium and $1.5 billion in following biennium. The increase in revenues comes as a result of federal change to the definition of “income” and the corresponding elimination of numerous tax deductions. Minnesota law has historically relied on the federal definition of income as a starting point and lawmakers will have to determine how to best address the changes made by Congress last fall. Both the Senate and House Tax Committees began the process of addressing tax conformity this week as they heard presentations from non-partisan staff and took public testimony regarding the federal tax reform legislation.
Committees Get to Work on Session’s High-Profile Issues
A number of high-profile legislative issues took center stage. Legislative measures seeking to address the opioid epidemic and gun violence were front and center, particularly in the House of Representatives. On Thursday the House Health and Human Services Reform Committee took up Rep. Dave Baker’s (R-Willmar) proposal (HF 1440), which would establish an “Opioid Stewardship Fee.” The fee would tax each opioid pill sold in the state. The bill directs funds collected from the fee toward grants for EMS programs as well as overdose drugs for paramedics and police. It would also increase the state’s Medical Assistance rate increase for opioid treatment programs by five percent. Finally, the legislation would also require that drug manufacturers disclose every sale, delivery or prescription of a controlled substance in Minnesota. After a number of testifiers emotionally described the impact opioids had had on their families, the committee laid the bill over.
Later that morning the House Public Safety & Crime Prevention Committee heard two pieces of controversial legislation carried by Rep. Dave Pinto (DFL-St. Paul) relating to firearms. The first bill, HF 1605, would allow law enforcement and family members to petition a court to find someone a threat to themselves or others and subsequently prohibit that individual from possessing a firearm. The second bill, HF 1669, would require background checks on most firearms transfers. With hundreds of activists on both sides of the issue in attendance and following hours of debate and public testimony both bills were tabled on a roughly party-line vote. Rep. Keith Franke (R-St. Paul Park) joined DFLers to vote against tabling the background check legislation.
Legislative Calendar and Committee Deadlines
The 2018 Minnesota Legislative calendar, complete with announced committee deadlines and holidays recesses, is below:
March 22
|
First committee deadline (The first deadline is for committees to act favorably on bills in the house of origin) |
| March 29 |
Second committee deadline (The second deadline is for committees to act favorably on bills, or companions of bills, that met the first deadline in the other house) |
March 30-April 8
|
Legislative recess for Easter/Passover holidays |
| April 20 |
Final committee deadline (The third deadline is for committees to act favorably on major appropriation and finance bills) |
| May 21 |
Constitutional deadline to adjourn sine die |
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