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February 23, 2018

Minnesota Legislature Opens

On Tuesday, the Minnesota Legislature returned for what is expected to be a fast-paced legislative session. Legislators have 13 weeks to amend or modify the biennial budget and pass tax conformity legislation following ‎Congress’ passage of the Tax Cuts and Jobs Act of 2017. In November, Minnesota Management and Budget projected a budget deficit of $188 million, but noted that those estimates would change significantly following the final passage of the federal tax reform legislation. The next and final budget forecast will be released Feb. 28. Most expect it to show a budget surplus. 

In addition to amending the state budget and tax code, it is customary for the legislature to consider a biennial capital investment package in the second year of the biennium. In January, the Dayton administration released an approximately $1.5 billion capital investment ‎proposal. The ‎governor’s infrastructure initiative would invest $541 million at the University of ‎Minnesota and ‎Minnesota State University campuses with the remaining $996 million largely ‎allocated to ‎improvement and maintenance of state buildings, the development of affordable ‎housing, and ‎repair or replacement of the state’s clean water infrastructure. In presenting the ‎proposal, ‎Minnesota Management and Budget Commissioner Myron Frans estimated that the ‎projects ‎funded by the proposal would create about 22,950 construction jobs throughout ‎the ‎state. ‎

The Minnesota Legislature is ‎constitutionally mandated to adjourn no later than May 21.‎

Resignations, Special Elections, and Legislative Majorities 
As sexual harassment in politics and Hollywood garnered national attention this fall, the Minnesota Legislature was front-and-center with multiple allegations of inappropriate behavior on the part of two state legislators, which eventually led to their resignations. State Senator Dan Schoen (DFL-St. Paul Park) and State Representative Tony Cornish (R-Vernon Center) both resigned following accusations of sexual harassment made by fellow legislators, legislative staff and former legislative candidates. 

However, legislative majorities remained unchanged after the resulting special elections as former state representative and current Washington County Commissioner Karla Bingham (DFL-Cottage Grove) defeated former Rep. Denny McNamara (R-Hastings) and Libertarian Emily Mellingen of Hastings in Senate District 54 while Republican Jeremy Munson defeated Democrat Melissa Wagner in House District 23B. 

The Senate District 54 election was particularly significant because, while Republicans held a 34-32 majority with the seat vacant, there remains some question as to whether Senate President Michelle Sen. Michelle Fischbach (R-Paynesville) is allowed to remain in the Senate having been elevated to lieutenant governor following the appointment of former Lt. Gov. Tina Smith following the resignation of former U.S. Senate Al Franken in December. Fischbach has maintained her ability to serve in both roles while others, including Minnesota Solicitor General Alan Gilbert, argue that to do so would constitute a breach of separation of powers. A resident of Fischbach’s senate district brought suit in early January that, while dismissed on procedural grounds in February, is expected to be refiled at some point now that the legislative session has commenced and Fischbach continues to serve in the Senate. If the courts eventually determine that Lt. Gov. Fischbach cannot continue to serve in the Senate, the Minnesota Senate could face a 33-33 split while a special election is held for Lt. Gov. Fischbach’s Senate seat.

Legislature Passes New Operating Budget
The Minnesota Legislature jumped right in this week and passed legislation to fund itself through the end of the biennium after Gov. Dayton line-item vetoed their funding at the end of last session. This week’s funding bill comes after months of high-profile negotiations, mediations, and litigation, which resulted in the Minnesota Supreme Court determining that because sufficient reserve funds allowed the Minnesota Legislature to operate until the start of the 2018 session, the Governor’s veto did not violate the state constitution. 

Following the Court’s decision last fall, Dayton announced that he would be willing to sign a clean funding measure once the legislature reconvened. On Thursday the Minnesota House took up and passed such a bill by a 77-50 vote. The Senate followed suit a few hours later and passed the operating budget on a 38-38 vote. The bill appropriates $64.4 million to the Senate and $64.76 million to the House and requires each body to pay back the funds that they drew down during the interim.

Some Democrats were critical of the timing of the legislation as they would have preferred the legislature also take up and ratify a number of state employee union contracts prior to passing their own funding. Dayton is expected to sign the appropriation legislation in the coming week.


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Larkin Hoffman provides counsel to a wide variety of ‎organizations, from ‎small businesses and nonprofits to  Fortune 500 companies, in ‎many areas of practice including ‎corporate and governance matters, litigation, real ‎estate, government relations, labor and employment, intellectual property, ‎information technology, ‎franchising and taxation. The firm also serves the needs of individuals in many ‎areas ‎including trusts and estates, personal injury and family law.


This newsletter is provided as a service to our clients and firm associates. While the information provided in this newsletter is believed to be accurate, it is general in nature and should not be construed as legal advice.