Inside the Minnesota Capitol

Inside the Minnesota Capitol

Minnesota politics, regulatory agencies and state government news updates

2016 Minnesota Election Preview

Posted in Democrats, Elections, House of Representatives, Republicans, Senate

The variables keep changing for the 2016 elections. This is a quick, overall look at the 2016 elections as they stand today.

The office of Governor, currently held by Democrat Mark Dayton, is not up for election until 2018. Neither U.S. Senate seat is up this cycle. The current incumbents, Al Franken and Amy Klobuchar, are both Democrats. Second term Senator Klobuchar’s seat is up for election in 2018 and Franken’s in 2020.

Super Tuesday

Minnesota holds precinct caucuses on March 1, 2016. This is Super Tuesday with eight other states – Colorado, Florida, Massachusetts, Oklahoma, Tennessee, Texas, Vermont and Virginia. Minnesota recently changed the date of the caucuses in order to have more say in the Presidential nomination. This will be the first foray into Super Tuesday for our state.

Minnesota State Senate

Ten current State Senators have stepped down or announced their retirements after the 2016 Session, five GOP and five DFL members. The current membership of the Minnesota Senate is 39 DFL members and 27 Republicans with one vacant seat. A Special Election will be held February 9, for the Brandon Petersen seat in Senate District 35. This seat is likely to remain Republican.

The DFL controls the Senate and in order for the GOP to take the Majority, the GOP has to maintain their 28 seats and flip six DFL seats. While the GOP may be able to pick up a few seats, picking up six seats will be difficult.

Minnesota House of Representatives

The current House membership is 72 Republicans and 61 DFLers with one vacant seat. Two special elections were held recently and the DFL maintained those seats. There is one more Special Election to be held on February 9 for the seat formerly held by Ann Lenczewski (DFL-Bloomington). The district leans DFL, but the GOP has a viable candidate running.

The House DFL Caucus needs to maintain their existing numbers and flip 6 seats in order to take control of the House. Of course, the GOP will do everything they can to maintain their majority. When the GOP won the House majority in 2014, they did so by concentrating on GOP-leaning rural seats and therefore do not have as many vulnerable freshman to defend in 2016.

US Congressional Races

The current split of the Minnesota Congressional delegation is five Democrats and three Republicans. All eight seats will be up for election in 2016.

Rep. John Kline (R) is retiring after this term representing Minnesota’s Second Congressional District. Multiple candidates have lined up for the seat over the past 6 months. There are six GOP candidates running thus far. The Democrats have had a very public debate over the past few months and one candidate, Angie Craig, has risen to the top. This will be a competitive race.

Rep. Rick Nolan (D) is the incumbent in the Eighth District. He served previously in 1975-1981 in another Minnesota district. The Eighth Congressional District encompasses a huge part of northern Minnesota and includes the Iron Range. Nolan will face businessman Stewart Mills in a rematch. Mills lost by 3700 votes in 2014. This is a very competitive race.

The rest of the congressional seats will draw candidates, but will not be as competitive as the Second and Eighth Districts.

MMB to Announce February Forecast on February 26

Posted in Budget

Minnesota Management and Budget (MMB) announced today that the February Budget and Economic Forecast will be released on Friday, February 26, 2016 at 11:15 am.  Minnesota is required by law to issue a Budget and Economic Forecast, one in November and the other in February.   The November forecast serves as the basis for the Governor’s initial budget recommendations.  With the February forecast’s more updated economic and budget data, the Governor makes modifications in his budget recommendations.  The House and the Senate will use the February forecast to create and pass the final enacted budget.

State and Federal Campaign Finance Reports Due

Posted in Campaign Finance, Elections

All federally registered PACs and Super PACs are required to file a year-end report of receipts and expenditures no later than Sunday, January 31, 2016. The period covered by the reports is January 1 through December 31, 2015.

Under the FEC’s mandatory electronic filing rules, any committee that receives contributions or makes expenditures in excess of $50,000 in a calendar year, or expects to do so, must submit all campaign finance reports electronically. Committees that do not meet the $50,000 threshold are permitted to file paper reports but the FEC strongly recommends the voluntary use of the electronic filing system. Once a committee begins to file reports electronically, on a voluntary basis, it must continue to do so for the remainder of the calendar year unless the FEC determines that extraordinary and unforeseeable circumstances make electronic filing impractical.

Reports filed electronically must be received and validated by the FEC by 11:59 PM Eastern Time on the filing deadline. Paper filers must ensure that the FEC receives their report by the close of business on the date of the filing deadline. The filing deadline is not extended because the due date falls on a weekend. Additional information about federal filing requirements can be found at: http://www.fec.gov/info/filing.shtml.

All Minnesota political committees, political funds, independent expenditure committees and independent expenditure funds are required to file a year-end report of receipts and expenditures no later than Monday, February 1, 2016.

State reports must be filed electronically. The Board will consider exceptions to the electronic filing requirements if you can show that your committee or fund has a good reason for not filing electronically. If granted, a waiver of the electronic filing requirements is valid for two (2) years.   A committee or fund that fails to file the annual report by the due date is subject to a late filing fee of $25 per day, not to exceed $1,000. Additional information about state reporting requirements can be found at: http://www.cfboard.state.mn.us/index.html.

Reimbursement of Employee Political Contributions Could Lead to Jail Time for CEO

Posted in Campaign Finance, Elections

Recent charges against a Pennsylvania CEO serve as a reminder of how important it is for corporate counsel and executives to ensure that corporate funds are not being used to support political candidates in violation of campaign finance laws.

According to a complaint filed in December, David Stewart, the CEO of The York Building Products Co., Inc. d/b/a The Stewart Companies, approved the corporate reimbursement of nearly $100,000 in personal contributions that were made to federal, state and local candidates by company executives, including himself. Government officials were alerted to the alleged violations by a former employee, and the subsequent investigation included the review of individual campaign contributions, as well as company payroll records. If convicted, under Pennsylvania law, Stewart faces up to 24 months in prison and $10,000 in fines. The company also separately faces up to $10,000 in fines.

The United States Supreme Court has upheld the constitutional right of corporate entities to speak out on issues, as well as the right for corporations to support or oppose candidates for political office through independent expenditures. However, the direct corporate support of political candidates is illegal under federal law as well as the laws of many states, including Minnesota. The Minnesota state law makes it illegal for corporations to reimburse employees for political contributions. Individuals convicted of an unintentional violation of the statute can be fined of up to $10,000, while knowing violations of the law may result in up to $20,000 in financial penalties and 5 years in prison. A convicted corporation can be fined up to $40,000 and lose the right to do business in Minnesota.

The defense of an alleged campaign finance violation can be expensive and is often excluded under corporate D&O insurance policies. As corporate executives know, even the mere headline noting criminal charges against a CEO or a company can have devastating consequences, regardless of the outcome of a subsequent investigation.

With the 2016 elections right around the corner, corporate leaders should:

  • REVIEW existing guidelines related to political activity;
  • REVISE or supplement corporate policies before a problem arises; and
  • EDUCATE management on the law and the importance of compliance.

 

Minnesota Lobbyist Disbursement Reports – Due Friday

Posted in Uncategorized

In accordance with the Minnesota Campaign Finance and Public Disclosure Act, each lobbyist who registers with the Minnesota Campaign Finance and Public Disclosure Board must periodically disclose the total amount of money spent on lobbying activities in a semi-annual Lobbyist Disbursement Report. The report covering disbursements from June 1 – December 31, 2015 is due Friday, January 15, 2016.

At the time of registration, each lobbyist designates whether he or she is a “self-reporting lobbyist,” an “authorizing lobbyist” or a “reporting lobbyist.” A self-reporting lobbyist reports his or her own expenditures to the Board. A lobbyist that reports distributions for another lobbyist on behalf of the same client is referred to as a reporting lobbyist. A lobbyist who allows someone to report expenditures on his or her behalf is an authorizing lobbyist. In addition, Minnesota Rules require all lobbyist principals to appoint one lobbyist as a “designated lobbyist” who is responsible for reporting the disbursements of the entity. Lobbyists must retain records related to lobbyist expenses for a period of four (4) years.

All self-reporting, reporting and designated lobbyists must file a Lobbyist Disbursement Report no later than January 15, 2016. The report must disclose the following information for expenditures between June 1 and December 31, 2015:

  • Total lobbying disbursements (not including lobbyist compensation);
  • Gifts to public officials; and
  • Other sources of funds used for lobbying purposes.

In general, an expense is a lobbying disbursement if it is incurred (1) to communicate with officials for the purpose of influencing official action; (2) to urge others to communicate with officials for the purpose of influencing official action; or (3) for any activity that directly supports either of these types of communication. Lobbyist disbursements do not include lobbyist compensation. Lobbyist compensation is reported by the principal on the principal report that is filed in March. If an actual cost of a lobbying activity is not available, the lobbyist must use a reasonable approximation of the cost.

Designated lobbyists must also provide a current list of officers and directors for the associations that the lobbyist represents. A report must be filed even if no disbursements were made during the reporting period.

The report may be filed with the Board by facsimile at (651) 539-1196 or (800) 357-4114 or by e-mail to cf.board@state.mn.us. Alternatively, the report may be filed electronically at http://www.cfboard.state.mn.us/lobby/report.htm. To access the electronic filing system, each lobbyist will need a user name and password that is provided by the Board.   All reports are available for viewing by the public.

A lobbyist who fails to file a required report by the due date is subject to a late filing fee of $25 per day, not to exceed $1,000. Because January 18 is a holiday, late filing fees will be imposed beginning on Tuesday, January 19.

Should you have any questions regarding the filing of this report, or any other campaign finance or lobbying issues, please contact John Knapp at (612) 604-6404 or Tami Diehm at (612) 604-6658.

State Revenues Increase

Posted in Uncategorized

Minnesota Management and Budget (MMB) issued an Economic Update today. This Update summarized revenue collections for November and December of 2015 and provided for a high level look at the U.S. economy.

There was continued good news in MMB’s numbers. Minnesota collected an additional $43 million in tax revenue for the months of November and December of 2015. Collections from the individual income tax, corporate tax, and other revenues were above estimates while sales tax receipts were lower.

MMB also highlighted the recent Federal Reserve action to raise short-term interest rates. This action by the Federal Reserve, lifting its benchmark rate by a quarter of a percentage point, reflects ongoing confidence in the strength of the U.S. economy. The labor market has strengthened while consumer spending and business investment have remained solid.

 

Ecklund Wins Special Election

Posted in Uncategorized

In House District 3A in Central and Northeastern Minnesota, DFLer Rob Ecklund comfortably won a special election to fill the seat vacated by the death of former Representative David Dill.  Ecklund, a Koochiching County Commissioner from International Falls, received 63.9% of the vote.  Republican Roger Skraba, a former Ely Mayor, received 19.5% and Independent Kelsey Johnson received 15.5% of the vote.

District 3A is the State’s largest House district and includes all of Koochiching County, most of Lake County outside of Two Harbors and the northern third of St. Louis County.  Representative Dill died of cancer in August after representing District 3A for 12 years.

Ecklund, an employee of Boise Paper in International Falls, will fill the remainder of Dill’s term through 2016.

State Releases November Revenue Collections

Posted in Uncategorized

Minnesota Management and Budget (MMB) released the November Revenue Review this morning.  Minnesota collected $1.426 billion in revenue in November which is $9 million less than what MMB predicted in the December 3rd Economic Forecast.  Receipts for general sales and other taxes were below forecast, offsetting positive collections in individual and corporate income tax revenues.   For fiscal year 2016, year to date receipts are now $7.519 billion.

Emily Johnson Piper Appointed As Commissioner of The Minnesota Department of Human Services

Posted in Uncategorized

On Monday, December 7, 2015, Governor Mark Dayton appointed his Office’s General Counsel Emily Johnson Piper to take the helm of the Minnesota Department of Human Services (“DHS”). Ms. Piper will replace outgoing Human Services Commissioner Cindy Jesson who was appointed to the Minnesota Court of Appeals last week.

Prior to 2011, Ms. Piper worked at a local Minneapolis law firm. In 2011, Minnesota Commerce Commissioner Mike Rothman appointed her to be his agency’s General Counsel and, thereafter, the Deputy Commissioner and Chief of Staff. She has served as the Governor’s General Counsel for approximately the past year.

From the issues associated with the Minnesota sex offender program, which was recently determined to be unconstitutional by United States District Court Judge Donovan Frank, to the lingering issues associated with the MNsure Health Insurance Exchange, to the day-to-day issues associated with running a state agency that touches the lives of tens of thousands of Minnesotans on a daily basis, Commissioner Piper will have her hands full as the lead of DHS.

Governor Dayton indicated that he only interviewed Johnson Piper for this position, presumably due to his trust in her abilities, as evidenced by her rapid rise throughout his Administration. Ms. Piper is widely regarded as intelligent and well-spoken, a tremendous problem solver, and well-liked by people on both sides of the aisle.

She starts her new position next Monday, December 14, 2015, and we wish her well in this new position.

Governor Dayton appointed Kimberly Slay Holmes to be his new General Counsel. Slay Holmes is coming to the Governor’s office from the Department of Revenue where she has been Assistant Commissioner of Administrative Law and Compliance.

 

Minnesota has Budget Surplus

Posted in Uncategorized

Minnesota Management and Budget (MMB) announced that the FY 16-17 budget has a $1.871 billion surplus.  The bulk of this $1.871 billion surplus comes from $682 million carried over from the FY 14-15 biennium and $865 million left unspent in the FY 16-17 budget at the end of the 2015 Legislative Session.  A smaller piece of the forecast is due to revenue and expenditure changes.  Revenue collections since the FY 16-17 biennium began on July 1, 2015 have increased by $90 million while expenditures have decreased by $249 million over the same time period.

Under current law, 33 percent of any November forecast balance in the current biennium is to be allocated to the budget reserve until the recommended level of $2.032 billion for FY 2016-17 is reached. This forecast directs $594 million to the budget reserve, increasing it to $1.597 billion.

Health and human services spending is forecast to be $12.064 billion in FY 2016-17. This is a reduction of $416 million from the 2015 end of session estimates.   Medical Assistance (MA) spending is forecast to be $415 million lower than end of session estimates.  Lower rates paid to managed care organizations for families with children and adults without children result in a $350 million reduction in forecast MA expenditures. Of this, $158 million is attributable to general fund savings from competitive bidding. The cost of basic care for the elderly and people with disabilities has also experienced slower than expected growth in recent years. This leads to a $111 million reduction in forecast MA expenditures in the FY 2016-17 biennium.