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February 3, 2017

Legislature Begins Reviewing Budget Proposals

In a departure from the flurry of activity that dominated the last couple of weeks, the tempo of the Minnesota Legislature slowed this week as the majority of committees began unpacking Governor Mark Dayton’s proposed budget. Released last week, Dayton’s $45.8 billion budget contains a variety of new policy initiatives related to heath care, economic development, and the environment for fiscal years 2018-19. Finance committees in the Senate and House of Representatives heard presentations from commissioners and agency staff outlining the details of the governor’s budget. Republican leaders in the legislature, including Senate Majority Leader Paul Gazelka (R-Nisswa) and Speaker of the House Kurt Daudt (R-Crown) have been critical of Dayton’s proposal, saying it spends too much money and does not provide nearly enough tax relief to Minnesota businesses and individuals. State of Minnesota is projected to have a budget surplus of $1.4 billion during the next biennium based on the most recent forecast from the Office of Management and Budget.

Employment Benefits Take Center Stage 
The House Job Growth and Energy Affordability Finance Policy Committee spent significant time discussing various proposals relating to employee benefits. The committee began the week discussing HF 315 (Anderson, S.) which would provide tax credits to employers who provide paid parental leave and to employees who lost income as a result of an unpaid leave. Specifically, the proposal would provide a tax credit equal to 25 percent of the amount of wages paid to qualifying employees or a credit equal to 25 percent of the lost wages during the unpaid leave. Proponents of the legislation argued that it would provide support to businesses that elected to provide benefits and relief to individuals who did not have the benefit. Opponents of the legislation argued that a tax credit, which would be paid at the end of the year, would not provide the immediate support families need.

Later in the week, the House Jobs Committee took up and passed the Uniform State Labor Standards Act (HF 600) after nearly five hours of public testimony and debate. Authored by committee chair, Rep. Pat Garofalo (R-Farmington), the measure would prevent local governments from passing ordinances relating to minimum wage, paid or unpaid leave, hours of employment or scheduling, or any other employment benefit, term, or working condition that exceeds those established by the state. The bill would retroactively prohibit local ordinances enacted on or after Jan. 1, 2016. Proponents of the legislation, including the Minnesota Chamber of Commerce and a variety of business-related trade associations cited the growing national trend of individual municipalities passing wage and other employment-related ordinances and expressed concern that it would give rise to a “patchwork of regulations” that would be costly and impractical to comply with for businesses.

The bill was not without its detractors, as a coalition of labor, faith, and nonprofit organizations testified in opposition. They argued that in addition to low wages, one of the primary causes of economic disparity and poverty is a lack of access to paid benefits, such as paid sick and safe time or paid family leave. They also argued that the state legislature should not take away their ability to organize and petition their local governments for these kinds of economic reforms. Ultimately the bill was passed on a 13-9 party line vote and re-referred to the House Government Operations and Elections Policy Committee. The Senate companion, SF 580 (Miller), is scheduled to be heard in the Senate Committee on Jobs and Economic Growth Finance and Policy on Monday, Feb. 6.



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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.


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