Inside the Minnesota Capitol - Minnesota politics, regulatory agencies and state government news updates

Legislative activities were put on hold on Wednesday as lawmakers honored the life of Sen. Gary Kubly (DFL-Granite Falls). Kubly, a 15-year veteran of the Legislature, died March 2^nd after battling Lou Gehrig’s disease. All Senate committee hearings and most meetings in the House  were cancelled Wednesday to allow legislators to attend the funeral in Granite Falls.

Governor Dayton announced Wednesday that a special election will be held Tuesday, April 10^th to fill Kubly’s seat. If necessary, a primary election will be held Tuesday, March 27^th. Local party units are meeting this weekend and candidates will emerge early next week.                                                                                                                                          

Stadium Bill To Be Introduced Monday

A Vikings Stadium bill will be introduced in the House and Senate on Monday. SF 2391, authored by Senate Majority Leader David Senjem (R-Rochester), Minority Leader Tom Bakk (DFL-Cook), and Sen. Julie Rosen (R-Fairmont) will be the Senate stadium vehicle. A press conference was held last week to announce that an agreement had been reached between the team, the State, and the City of Minneapolis. About half of the funding for the $975 million stadium would come from the Vikings. Thirty-five percent of the funding would come from the State, paid for by charitable electronic pull-tabs. The City would chip in 15% from downtown sales taxes.

The bills still need to go through a lengthy committee process. Senjem and Speaker of the House Kurt Zellers (R-Maple Grove) have both said they believe a stadium bill will need to be fully vetted. Lawmakers must act fast as the first committee deadline, “for committees to act favorably on bills in the house of origin”, is Friday, March 16^th at midnight.

Constitutional Amendments

HF 2738, the companion to the Senate’s bill proposing a constitutional amendment requiring photo identification to vote, had its first hearing this week. The bill, authored by Rep. Mary Kiffmeyer (R-Big Lake), was passed in the House Government Operations and Elections Committee after a 9-6 vote and sent to the House Ways and Means Committee. Secretary of State Mark Ritchie, who has already appeared three times before Senate committees on the issue, testified in opposition to the bill.

On Thursday, the Senate voted 34-30 to move SF 1705,  the “Right-to-Work” constitutional amendment, from the Senate Jobs and Economic Growth Committee to the Senate Judiciary Committee. The move was requested by Sen. Dave Thompson (R-Lakeville), the author of the bill, to send it to a friendlier committee. If the bill passes, voters will see this question on the November 2012 ballot: "Shall the Minnesota Constitution be amended to guarantee all citizens the individual freedom to decide to join or not join a labor union, and to pay or not pay dues to a labor union?”. All DFLers and Sen. Jeremy Miller (R-Winona) voted against moving the bill. The Judiciary Committee will hear the bill Monday morning at 8 a.m.

 

The Februrary budget forecast released on Wednesday was pretty good news.   When you add this surplus of $323 million with the $876 from November you have a total surplus for the 12-13 biennium of $1.199 billion dollars.  Under current law, the first $5 million is directed to the budget reserve bringing the balance to $653 million.  The remaining $318 million is committed to begin paying back the K-12 Education shift passed last legislative session.  After this action, $2.4 billion in school payment shifts remain.

Just like in November, lower spending estimates account for the majority of the surplus.  Approximately two-thirds of the change, or $230 million, and was primarily due to spending reductions in human services.  Revenue updates account for the other one-third or $93 million with the increase coming from income and sales tax.  State revenues are stable and Minnesota labor numbers are outperforming other states.

The forecast shows a projected deficit of $1.1 billion for fiscal years 2014-15.

Voter ID Amendment Moves Forward in the Senate

On Thursday, the Senate Finance Committee approved a bill proposing a constitutional amendment to require voters to show a photo ID to vote. The Committee passed the bill on a party-line vote of 9-6 and sent it to the Rules Committee. Secretary of State Mark Ritchie testified in the House State Government Finance Committee on Monday offering an alternative to the Photo ID requirement. Ritchie demonstrated the use of electronic poll books which would provide updated information on registered voters, including a photo. Supporters of the electronic poll books say the system would allow for photographic identification at the polls without requiring voters to have a government issued photo ID with current address.

Vikings Stadium Deal Announced

The State of Minnesota, the City of Minneapolis, and the Minnesota Vikings released a plan for the construction of a nearly $1 billion new football stadium. About 50% of the stadium would be paid for by the Vikings, 35% by the State, and 15% by the City. State funding would come from electronic pull-tabs and the City’s contribution would come from existing convention center sales and hospitality taxes. The annual operating expenses for the stadium are estimated to be about $20.5 million of which the Vikings would pay $13 million and the City of Minneapolis would pay $7.5 million. The State would not cover any of the annual operating expenses. A bill is expected to be introduced as early as Monday.

 

Senator Chris Gerlach (R-Apple Valley) and Representative Keith Downey (R-Edina) introduced an Occupation Licensing bill (SF 1629 and HF 2002) on Monday that provides every person has the right to engage in “lawful occupation free from any substantial burden” of state regulation unless there is a compelling interest. Dr. Morris Kleiner, a professor of labor policy at the University of Minnesota’s Humphrey School of Public Affairs, said that the state’s current licensing laws reduce jobs and discourages entrepreneurship. Kleiner added that SF 1629 could stimulate over 15,000 new jobs in Minnesota by converting the current licensing laws to less restrictive regulations. The bill passed through the Senate Commerce and Consumer Protection Committee meeting Wednesday morning and was re-referred to the Judiciary and Public Safety Committee. 

The Senate State Government and Local Elections Committee concluded their hearing on the controversial Voter ID Constitutional Amendment on Wednesday afternoon. SF 1577 passed the Committee after an 8-6 party-line vote and was re-referred to the Senate State Government Innovation and Veterans Committee. If passed, voters will be asked if the Constitution should be amended to require all voters to have government-issued photo identification in order to vote. The photo ID requirement has long been on the Republican agenda. Last year the legislature passed a similar bill but was vetoed by Governor Dayton. SF 1577 does not need the Governor’s signature, however, it must pass the House and Senate to put the question on the November ballot.

The ranking minority member of the Committee, Senator Katie Sieben (DFL-Newport), said DFLers agree that improving the integrity of the election system would be beneficial to the state. She disagrees, however, with the route Republicans are taking. “Our money would be better spent updating technology to make voting more efficient and secure,” she said. If the measure passes the ID requirement would potentially put a $40 million burden on tax payers. Senator John Harrington (DFL-St. Paul) said the bill is “an answer in search of a problem”. Fraudulent voting has not been an issue in Minnesota, he said. The chief author of the bill, Senator Scott Newman (R-Hutchinson) told the Committee he brought the bill forward because many of his constituents have had concerns about voter fraud. A hearing for the bill has not yet been scheduled in the State Government and Innovation Committee.

Governor Mark Dayton issued his second State of the State address Wednesday evening during a joint session of the House and Senate. Dayton called for unity and cooperation in his speech and said he will stand ready to work across party lines to better the state of Minnesota. The governor underlined his jobs proposal and said that the 168,000 Minnesotans who want to work but are unemployed should be their top priority. Other matters of precedence outlined by the Governor included the passage of a bonding bill, a proposal for a new Vikings stadium, and a four-year, $241 million project to restore and update the State Capitol in Saint Paul. Watch the address here.

The White Earth Tribe announced a proposed partnership with the State to construct a casino in the Metro area to fund a new Vikings stadium. The casino would be operated in equal partnership with the State of Minnesota and revenues would be split 50-50 between the Tribe and the State. Erma Vizenor, Chairwoman of the White Earth Tribe, said Thursday the proposal had the support of the Governor. Katherine Tinucci, Dayton’s Communications Director, said this was an exaggeration. Governor Dayton is encouraging all groups to work toward a solution for the Vikings stadium but he believes authorizing a casino to fund a new stadium is problematic.

Department of Commerce Re-Org

In a recently announced move with immediate effect, Minnesota Department of Commerce Commissioner Mike Rothman announced a "significant, strategic reorganization" within his agency.   The newly-named and formed divisions within the Department are as follows: Consumer Protection and Education Division, the Insurance Division, and the Enforcement Division.

The Consumer Protection and Education Division will be headed by Senior Director of Consumer and Industry Services Robert Commodore, which will include the Department's Consumer Response Team and Licensing Units.  Mr. Commodore will also oversee the Department's Unclaimed Property Division. 

A new Division of Insurance will bring under one umbrella all of the Department's insurance activities.  This Division will be headed by Jaki Gardner and will include the Department's financial solvency and actuarial groups, the Insurance Product Filing unit, and the Life, Health, Work Comp and Self-Insurance staff.  Ms. Gardner recently announced that her role in her new job will be short-lived as she will be moving back to her home state of Illinois to take the role of Chief Operating Officer of Catholic Holy Family Society in Joliet.  Ms. Gardner will be greatly missed by her regulator-colleagues and industry people alike, as well as those who have had the pleasure of working with her and representing her on a frequent basis during her long tenure at the Department.  Commissioner Rothman has indicated that he will be conducting a nationwide search for her replacement. 

The Enforcement Division (as it was originally known as the "Market Assurance Division" for the past eight years) will consist of the Enforcement Unit, the Insurance Fraud Unit, and the Securities Enforcement Unit.  Neither a Division head nor a Deputy Commissioner has been named to oversee the Enforcement Group.

Key Minnesota Department of Commerce Enforcement Action Announced

The Department of Commerce recently announced that it had issued a Statement of Charges against Austin, Minnesota based Minnesota Surety & Trust Co. for fraudulent and deceptive behavior.  In the Department's Statement of Charges, Minnesota Surety's President and Board Member is alleged to have directed certain of his producers, in preparation for an upcoming market conduct examination by the Colorado Division of Insurance, to alter company records to make them appear as if they were in compliance.  The enforcement case will kick off in early October with a prehearing conference at the Office of Administrative Hearings in St. Paul, Minnesota.  This case will be closely watched to see what penalties the Department will pursue as it has indicated that Minnesota Surety "is unfit to do business in Minnesota." 

GOP Pushback On Department of Commerce Led Minnesota Health Insurance Exchange

Following the Department of Commerce's recent announcement that it received a $4.2 million federal grant to help develop the infrastructure for a health insurance exchange, which is required by the 2010 Affordable Care Act to be in place by January 1, 2013 and operational a year later (or else the federal government will set one up for each state that does not have one in place), certain Minnesota Republican legislators have vowed to do everything in their power to make sure that it does not proceed.  Needless to say, this will be an interesting battle to watch as the Minnesota Chamber of Commerce and other business leaders have expressed their support for the Minnesota exchange.  

Minnesota Legislature Stands Adjourned – for now!

The Minnesota Legislature met its constitutional deadline for adjournment of midnight, May 23, and adjourned as required.  The final hours of the regular legislative session were anti-climactic, as the major appropriations bills for the State’s next fiscal year beginning July 1 awaited certain veto by Governor Dayton.  In this last week of the session, the gap between the Governor and the Legislature had narrowed, but never completely closed.  While the Republicans in the Legislature proposed a biennial budget of $33.9 billion, the Governor’s budget was stuck at $35.8 billion.  A focus of dispute was the Governor’s proposal for an income tax increase on high-income Minnesotans, which the Legislature has been unwilling to accept.

Negotiations between the Governor and the Legislature will resume on Friday, May 27.  Meanwhile, legislative leaders from both caucuses will be travelling around the state highlighting, depending on their perspectives, either the accomplishments or lack thereof in the 2011 regular session.  Governor Dayton has the power to call the Legislature back into Special Session at any time.  However, he has indicated he would not do so until there is budget agreement with legislative leaders.  The state faces a partial government shutdown if a balanced budget is not passed by July 1.

The 2012 Minnesota legislative session will convene on January 24, 2012.  The 2012 session is expected to last approximately 10 weeks.

Tort Reform Stymied

As the Minnesota House of Representatives convened yesterday, its first item of business was SF149, a comprehensive tort reform bill, which had passed the Minnesota Senate on May 16 on a 36 to 29 vote.  However, DFL legislators opposed to the bill began offering a series of amendments and threatened to continue talking on the bill until the midnight deadline for adjournment was reached.  After three hours of debate and faced with a continued mini-filibuster, Republican leaders chose to continue the bill on the calendar and move onto other business.

As amended on the floor of the House, the bill contained a number of substantive tort reform initiatives including:

• Interlocutory appeals of class action certification decisions would be allowed as a matter of right;
• The general statute of limitations would be reduced from six years to four years;
• The prejudgment interest rate for private litigants would be reduced from 10% per year to a rate based on the secondary market yield of one year United States Treasury bills, or 4%, whichever is greater;
• Attorney fee awards to a party recovering money damages is required to be “reasonable” in relation to the total amount of damages awarded to the prevailing party; and
• No attorneys fees would be awarded to a claimant if an offer of judgment is made to the party claiming damages and the actual award is less than the offer of judgment.

The tort reform legislation remains live for consideration at the 2012 session and need only pass the Minnesota House to be presented to the Governor.  House Majority Caucus leaders have indicated their intention of taking the bill up very early in the 2012 legislative session.  Governor Dayton has not publically indicated whether he would sign the measure.

Energy Bills Passed

Energy legislation was a topic of debate in the last weekend of the 2011 session.  On Friday evening, a conference committee on SF86 took up legislation, which as introduced, repealed the moratorium on construction of new coal fired power plants or the importation of electricity generated by coal fired power plants.  The Dayton Administration indicated that the Governor would likely veto the bill.  In an effort to address the Governor’s concerns, the bill was amended in conference committee to allow an exemption of 1500 megawatts in coal fired power.  The conference committee report was adopted and re-passed by the Legislature.  However, even with the concession to Governor Dayton, it is expected that he will veto the bill.

On Sunday, May 22, the House took up SF1197, the Omnibus Energy Policy bill.  The House amended the bill to include several different components, which had been negotiated with the Governor’s staff, including the following:

• Changes were made to the State’s Conservation Improvement Program, which allows large natural gas customers to opt out of the program and allows exemptions granted to large electric customers to become permanent;
• The authority for inverted block rate affordability programs for low-income residential ratepayers is repealed;
• Utilities regulated by the Minnesota Public Utilities Commission are allowed to file multi-year rate plans, although the plan can be no longer than three years in length and the first proposed plans cannot be filed for one year; and
• Utilities are required to file with the Public Utilities Commission and the Legislature reports analyzing the cost of compliance with the previously adopted State Renewable Energy Standards.

Earlier versions of the Omnibus Energy Policy bill had included a requirement that electricity rates be designed primarily based on the actual cost of the service between and among customer classes.  This provision was intended to address an issue with some Minnesota utilities where residential rates are subsidized by business customers.  In the end, because of opposition from Governor Dayton’s office, the provision was not included in the final version of the bill.

Omnibus Tax Bill

The Omnibus Tax bill for the 2011 was today vetoed by Governor Dayton.  However, it contained several provisions of benefit to the business community, including:

• The statewide business property tax would be phased out by 2025;
• Adoption of sales-only apportionment for a corporate income tax would be completely phased-in in 2012; and
• The second tier of the research and development tax credit is increased from 2.5% to 4.7% beginning in tax year 2014.

In his veto message, the Governor expressed concern over the impact on property taxes from reductions in Local Government Aid.  However, he did indicate a willingness to consider the immediate phase-in of single sales apportionment.

Final Committee Deadline Reached

The Minnesota Legislature has now passed its final committee deadline for the 2011 session.  All policy bills for the session are now required to be out of committee in both houses of the Legislature to remain alive this session.  With the committee deadline looming, this past week saw a flurry of activity with bills being added to or removed from committee schedules with short notice.

Meanwhile, the pace of legislative deliberations on the budget side of things was decidedly slower.  Facing a deadline for adjournment on May 23, little apparent progress has been made on resolving overall differences between the Governor and the Legislature on the overall size of the State budget.  So far, only one of the session’s major tax and budget bills has become law, the Omnibus Agriculture and Veterans Affairs Appropriations Bill.  Conference committees on the other tax and budget bills will resume next week, but without agreement between the Governor and the Legislature on an overall budget target, little real progress will be made, and a legislative special session becomes more and more likely.

Gaming Takes Center Stage

Multiple gaming expansion bills were heard this week in the Senate State Government Innovation and Veterans Committee. The committee heard three very different gaming bills. A compulsive gambling appropriation bill (SF650), authored by Sen. Paul Gazelka (R-Brainerd), was passed out of committee. Also passed out of committee was a lawful gambling tax rate modification (SF702), authored by the Chair of the Committee, Sen. Mike Parry (R-Waseca).  The linked bingo and electronic pull-tabs authorization bill for charitable gaming operations (SF1116), authored by Sen. Bill Ingebrigtsen (R-Alexandria), was laid on the table after testimony. Sen. David Senjem’s racino bill was scheduled to be heard at an evening hearing but Sen. Parry unexpectedly cancelled the evening hearing at the last minute, claiming scheduling conflicts.

In the House, the racino bill (HF1352), authored by Rep, Bob Gunther (R-Fairmont), received an information-only hearing. The proponents were allowed ample opportunity to address the committee while the opponents were given less time in front of the Jobs and Economic Development Committee. Chair Gunther indicated an intention to bring the issue back at another time for additional consideration.

Sen. Doug Magnus (R-Slayton) and the owners of Block E in downtown Minneapolis held an invitation-only press conference this week on a proposal for a Block E casino, which they are calling “Minnesota Live.”  The vision is a state-owned, Las Vegas-style casino with supporters that include Minneapolis business leaders and elected officials.  Proponents say the casino will bring in millions of new visitors helping to revive a stressed downtown economy and potentially more than $100 million a year into the state’s general fund.  Opponents of the plan include Minneapolis Mayor R.T. Rybak as well as American Indian gambling interests.  The plan would gut and completely renovate the struggling movie-and-restaurant complex at Block E near the Target Center and install as many as 3,200 gambling machines by the spring of 2012.  Rep. John Kriesel (R-Cottage Grove) introduced HF1675, on Friday, May 6, which is the Block E Casino proposal.

Voter ID

The House took up Rep. Mary Kiffmeyer’s (R-Big Lake) voter ID bill on Thursday, spending over three hours debating this highly controversial bill. HF201/SF509 passed on a party line vote of 73 to 59. The bill requires all voters to present a photo identification card with their current address before receiving a ballot.  The Senate passed a different version of the bill, authored by Sen. Warren Limmer (R-Maple Gove), also on a party line vote at the end of April. The version passed by the House will go back to the Senate where the Senate will either vote to adopt the House changes or request a conference committee to work out the differences between the bills.

Coal Moratorium Repeal Bill Passed Off Senate Floor

SF86, authored by Sen. Julie Rosen (R-Fairmont), was passed off the Senate floor on Thursday, April 14, on a bi-partisan 42 –18 vote.  Sens. Marty, Torres Ray, and Dibble each offered amendments to the bill, all of which failed. The bill repeals the ban on new electric generation facilities or contracts with electric energy providers that would lead to increased carbon dioxide emissions. The ban was enacted as part of the 2007 Next Generation Energy Act. The companion bill, HF72, authored by Rep. Michael Beard (R-Shakopee), awaits action on the floor of the House. In comments Thursday, Gov. Dayton said he opposed the measure but he stopped short of threatening a veto.

Dayton Issues Executive Orders on Energy and Environment

In another indication that Gov. Dayton intends to utilize his executive powers via executive orders to a greater degree than his predecessors, on April 8, the Governor issued three executive orders dealing with energy and the environment. Executive Order 11-12 directs state agencies to identify and make cost effective energy improvements in state facilities and sets a goal of a 20% reduction in state energy consumption. The state owns approximately 30 million square feet of space and new efficiencies resulting from the executive order are expected to result in millions of dollars in annual savings to the state. This new executive order also provides technical support to local governments and school districts to make their own energy efficiency and renewable energy improvements in their buildings.

Executive Order 11-13 directs state agencies to implement new practices and policy that reduce the environmental impact of state government operations. State agencies are directed to annually increase sustainability plans that identify specific measurable goals to include reducing greenhouse gas emissions by 80% by 2050, reducing waste disposal by 60% and other measures of sustainability. The sustainability effort is expected to cause state agencies to reduce pollution, use less energy, and reduce the use of petroleum fuels.

The third Executive Order, 11-14, renames the Office of Energy Security, housed within the Department of Commerce, to the Division of Energy Resources. The new name is intended to reflect a broader mission for the division to include planning and research around new energy facilities and transmission, the promotion of clean energy in the administration of low income and weatherization programs.

Energy Policy Omnibus Bill Possible

House and Senate leaders on energy policy are in talks over a possible Omnibus Energy Bill.  The House and Senate committees with energy jurisdiction heard multiple bills last week and laid many of them over for possible inclusion in the Omnibus Bill. One bill that was laid over attempts to analyze the cost impact on utility rates from complying with the state’s renewable energy standard. HF1375, authored by Rep. Peggy Scott (R-Andover), is an effort to determine what utility rates would be if the renewable standards were no longer there. While the bill does garner bi-partisan support, in contention is the scope of what should be analyzed. Rep. Jean Wagenius (DFL-Mpls) and the Service Employees International Union want the increased health costs from air pollution from non-renewable energy sources to be part of the analysis. Sen. Michelle Benson (R-Ham Lake) sponsors the companion, SF1093, which awaits action by the Senate Energy, Utilities and Telecommunications Committee.

Marathon Floor Sessions

Many of the 2011 session Omnibus Tax and Appropriations bills were taken up on the House and Senate floors this week. Some moved quickly, such as the agriculture bill, while others with more controversy like taxes, required hours of debate, multiple amendments and even more monologues on the most contentious points. The Senate has taken up and passed omnibus K-12 education, higher education, environment, jobs, state government innovations, health and human services, agriculture, and public safety. The House has passed off the floor omnibus environment, K-12 education, higher education, state government finance, taxes, public safety and transportation bills. After days of over six hour debates, both the House and Senate are taking Friday off from floor sessions and will take up the remaining omnibus bills on Monday.

Omnibus Bills Still to Go

Still to go next week for the Senate are the transportation and tax omnibus bills, while the House still has to tackle health and human services and jobs. All omnibus bills will require conference committees to iron out the differences between the Senate and House versions of the bills. While none of these omnibus bills are expected to be signed by Governor Dayton, they establish a critical starting point for legislators with the Governor’s office. The Governor has stated, once an overall budget agreement has been reached, he would like to be presented with a comprehensive omnibus budget bill.

Senate District 66 Special Election

In somewhat of an upset, Mary Jo McGuire won the DFL primary special election held Tuesday in Senate District 66 over the current House District 66B Representative John Lesch.  McGuire is a former state Representative, holding office from 1988 until 2002, when she decided not to run again as redistricting would have forced her to run against a fellow long-time DFLer. The general election to replace Senator Ellen Anderson, who was appointed to the Public Utilities Commission, is scheduled for April 12.  McGuire’s opponent is Republican Greg Copeland, chair of St. Paul’s Republican Party.  Because it is a historically safe DFL district, McGuire is expected to win.

Governor Dayton Pens Budget Letter

Earlier this week, Governor Dayton wrote an open letter to Senate Majority Leader Amy Koch (R-Buffalo) and Speaker of the House Kurt Zellers (R-Maple Grove) discussing his expectations for budget negotiations moving forward.  He outlined a request for a complete balanced budget and stated he would not review a single budget bill unless it was part of the complete budget plan.  Governor Dayton also commented on his concerns regarding remarks Republican leaders made as to not trusting or using the fiscal notes provided by the Office of Minnesota Management and Budget (MMB) to determine the impacts of suggested cuts and reforms.  The Governor asserted it would be the MMB numbers that would be used in negotiating a final budget.  Governor Dayton also said he would not sign budget bills that included policy provisions with no-fiscal impact unless he had specifically agreed to them.  He stated “…I will not sign revenue or expenditure bills that include policies, to which I have not agreed, which I oppose, and which should be passed and presented to me as separate legislation.  If I reject those items, and therefore the bills containing them have to be returned for separate passage, those delays will be the Legislature’s responsibility, not mine.”

Special Election

Senate District 66 will hold a primary election next week to replace six-term Sen. Ellen Anderson (DFL), who was appointed to the Public Utilities Commission earlier this month. The favorite in the race is current 66A DFL Rep. John Lesch. Rep. Lesch is a prosecutor and is currently serving his fifth term. The general election will be April 12. If Rep. Lesch should win the race, there will have to be another special election to fill his seat.

Tensions High

As committees struggle to craft budget bills, tensions are increasing, and the rhetoric on all sides is getting more heated. When you add in the number of people interested in the issues being debated with the short window of time available for Committees to hear testimony, you have a recipe for conflict. For example, one omnibus bill sparked intense emotion this week as a testifier from greater Minnesota had to be removed from the committee by the Sergeant at Arms for his failure to abide by the Chair’s three-minute allowance time for testimony. 

Omnibus Bills

The deadline for omnibus bills to be referred to the Ways and Means Committee in the House and the Finance Committee in the Senate is tonight at midnight. Four bills remain to be heard in the Senate (Health and Human Services, Tax, Education, Transportation) and four (Jobs, Agriculture, Judiciary, Public Safety) in the House. Next week, all omnibus bills will be taken up during floor sessions that promise to be long and arduous.

If you’re interested in tracking any of the omnibus bills visit http://www.leg.state.mn.us/ and use the following bill numbers:

• Agriculture: SF 1016 – HF 1039
• Capital Investment: SF 40 – HF1232
• Education: SF 1030 - HF 934
• Environment and Energy: SF 1029 - HF 1010
• Health and Human Services: SF 760 – HF 927
• Higher Education: SF 924 - HF 1101
• Jobs and Economic Growth: SF 887 – HF 1049
• Judiciary: HF 440
• Public Safety: SF 958 - HF 853
• State Government Innovation and Veterans: SF 604 - HF 577
• Taxes: SF 27 – HF 42
• Transportation: SF 898 – HF 1140

 Governor Updates Budget

The Governor released a new budget this week, taking into account the February forecast that shows increased revenues and a reduction in the deficit to approximately $5 billion. His two major changes were to eliminate the proposed 3% surtax on incomes over $500,000 and to reinvest $170.3 million in health and human services spending. Gov. Dayton also added a proposal for a $21.8 million increase to the research and development tax credit.

Governor Gives Executive Order

Gov. Dayton issued an executive order this week that requires regular audits of health plans and ensures full public disclosure on health plan profits, reserves and administrative expenses for state contracted health care providers. The Commissioners of Health, Human Services and Commerce, along with Gov. Dayton, announced Minnesota will now have a competitive bidding process for those providing state health care. Payments for health care will now be focused on outcomes rather than procedure. This change is being described as a fundamental shift that will better serve taxpayers.

Bill Introductions of Note

HF 908: A bill for an act relating to natural resources; modifying Wetland Conservation Act; amending Minnesota Statutes 2010, sections 103G.005, by adding a subdivision; 103G.2212; 103G.222, subdivision 3; 103G.2242, subdivisions 2a, 6, 7, 9, 12, 14, by adding a subdivision; 103G.2251; proposing coding for new law in Minnesota Statutes, chapter 103G.

HF 931: A bill for an act relating to energy; requiring Legislative Energy Commission to examine issue of permanent storage of spent nuclear fuel produced by nuclear-powered electric generating plants.

HF 1025: A bill relating to utilities; requiring utility rates be based primarily on cost of service
between and among consumer classes.

Bills on the Move

Coal fired energy took center stage again this week, with the House Commerce and Regulatory Reform Committee hearing HF 72, authored by Rep. Michael Beard (R-Shakopee), on Tuesday. The Senate Energy, Utilities and Telecommunications Committee heard the second round of testimony on the companion bill, SF 86, authored by Sen. Julie Rosen (R-Fairmont), also on Tuesday. These bills would repeal the ban on new electric generation facilities or contracts with electric energy providers that would lead to increased carbon dioxide emissions. The ban was enacted as part of the 2007 Next Generation Energy Act.  Both Committees recommended approval by strong margins and the bills now await floor action. 

On Thursday, the Senate Energy, Utilities and Telecommunications Committee recommended approval of SF 548, a bill giving the Public Utilities Commission (PUC) authority to approve multiyear rate plans for utilities. Both Xcel Energy and Deputy Commissioner of Commerce Bill Grant testified in support of the bill, authored by Sen. Michelle Benson (R-Ham Lake). The Committee removed a portion of the bill also allowing rate riders as an alternative to the multiyear rate plan. However, there continue to be some concerns being raised that the bill does not mandate a yearly earnings review as part of the multiyear rate plan process.

Finally, the conference committee on SF 4, the nuclear moratorium repeal authored by Majority Leader Amy Koch (R-Buffalo), met for the first time Friday morning to begin discussion of the bill.  The Senate refused to concur with House language that added restrictions on reprocessing of nuclear waste.  To date, the Governor has indicated that such a restriction is just one of several additional provisions that should be added to the bill.

New PUC Chair Appointed

Six term DFL Senator and long-time renewable energy and environmental advocate Ellen Anderson has been named by Gov. Dayton as the new PUC Chair. The PUC regulates three cornerstone service industries in Minnesota's economy – electricity, natural gas and telephone. This appointment came as a surprise to some as Gov. Dayton had previously stated he would not use current legislators to fill appointments. Senator Anderson’s resignation will be effective March 20 and several prominent DFL names are already talking about seeking the seat.

It was a busy week in the environmental and energy arenas at the Minnesota Legislature.  On Thursday, Governor Dayton signed into law HF 1, the environmental review bill chief authored by Rep. Dan Fabian (R-Roseau) and Sen. Bill Ingebrigtsen (R-Alexandria.).  Among its notable features, the bill, now Chapter 4 of Minnesota Laws 2011, accelerates and simplifies the permitting process at both the Department of Natural Resources and the Pollution Control Agency, allows direct appeal to the Court of Appeals of agency decisions on environmental permits and provides for environmental assessment documents to be prepared by contractors of project proposers, rather than contractors of the reviewing governmental body.  Additional legislation on this topic may still be considered this session.

The Governor signed the bill just one day after the Office of Legislative Auditor (OLA) released its report on environmental reviews of private-sector projects. The OLA evaluation focused on the timeliness and efficiency of the state's environmental review and permitting practices, noting lengthy delays in the review of certain projects.

Coal fired energy also took center stage this week, with the House Commerce and Regulatory Reform Committee hearing HF 72, authored by Rep. Michael Beard (R-Shakopee), on Wednesday.  A second hearing in that same committee and final vote is scheduled for March 8. The Senate Energy, Utilities and Telecommunications Committee heard testimony on the companion bill, SF 86, authored by Sen. Julie Rosen (R-Fairmont). The Senate Committee will take further testimony on March 8, as well. These bills would repeal the ban on new electric generation facilities or contracts with electric energy providers that would lead to increased  carbon dioxide emissions. That ban was enacted as part of the 2007 Next Generation Energy Act.

In a similar effort regarding nuclear power, a conference committee has been selected for SF 4, the nuclear moratorium repeal authored by Majority Leader Amy Koch (R-Buffalo). Members include Sens. Koch, Julie Rosen (R-Fairmont) and Linda Scheid (DFL-Brooklyn Park) and Reps. Joyce Peppin (R-Rogers), Joe Hoppe (R-Chaska) and Tim Mahoney (DFL-St. Paul). The conference committee was requested after the Senate rejected the House version of the bill which included an amendment sponsored by Rep. Phyllis Kahn (DFL – Minneapolis) to include a provision that put a restriction on reprocessing spent nuclear fuel into weapons-grade plutonium. Governor Dayton has given three criteria that must be in place before he will sign the bill.  The Kahn amendment meets one of these criteria and the other two require ratepayer protection and no net increase in nuclear waste in the State.

Finally, a number of new initiatives surfaced this past week, including various efforts to amend Minnesota’s Conservation Improvement Program (CIP) statutes, a bill allowing utilities to file for “multi-year rate plans,” a bill requiring utility rates to better reflect costs to serve various classes of customers, and efforts to restrict wind energy development.  The outlook for those bills reamains unclear but we will provide further information in upcoming newsletters.

New Regents Elected

After a contentious process that included accusations of partisan politics, the newest members to the University of Minnesota Board of Regents were formally elected on Monday evening by the full Legislature. Former House Speaker Steve Sviggum; Minnesota Power executive David McMillan; David Larson from Cargill, Inc.; and former State Representative Laura Brod were all approved by the Legislature. The controversy stemmed from selection of Laura Brod to the at-large seat over current regent Steven Hunter, who is an AFL-CIO official.  With Hunter off the Board, there is no labor representation, as there has been historically. Each member will serve a six-year term.

Governor’s Budget Receives Tough Scrutiny

Representatives of the Department of Human Services (DHS) have spent the last two weeks at the Capitol testifying on the Governor’s budget recommendations for their agency.  The Health and Human Services committees are holding hearings with Department staff to scrutinize the Governor’s proposed budget.  DHS is responsible for the administration of Minnesota’s health plans, child and family services and welfare, chemical and mental health programs, continuing care administration, and Minnesota’s sex offender program.  While almost everyone agrees most of these programs are necessary, the best way to deliver these programs has been a highly debated topic.  Senators and Representatives on both sides of the aisle have raised questions about cuts to one program leading to higher costs in another and the measurable outcomes related to return on investment. DHS has repeatedly answered the question “why this program” with the statement “…these decisions were not made easily or taken lightly this is best we can do…”

AFL-CIO Descends on the Capitol

In solidarity with Wisconsin labor unions, Minnesota members of the AFL-CIO swarmed the Capitol on Tuesday night.  Approximately 500 to 1000 union workers and supporters came to the rally.  Governor Dayton greeted the crowd saying, “We will stand with you in solidarity.”  With what is being billed as the largest rally at the Capitol in years, the “solidarity rally for Wisconsin Workers” brought DFL legislators, members of Congress, and city officials to the Capitol to show their support.  Governor Dayton’s participation in the rally received harsh criticism from Republicans.  Tony Sutton, the Republican Party Chairman, issues a statement saying, “Dayton should get serious about his home state's finances” and start working with Republican legislators to balance Minnesota's budget.

Bonding Bill Receives Hearing

In a packed committee room, the House Capital Investment Committee held their second only hearing of the session taking testimony on HF 607, authored by Rep. Larry Howes (R-Walker).  The bill appears to include all of Governor Dayton’s proposed bonding program.  Testifiers included the cities of Rochester, Mankato and St. Cloud; all have Civic Center projects in the bill. A Hennepin County Commissioner testified on the importance of a new light rail platform and the City of Bloomington described the necessity of a new Lindau Lane set-up for the Mall of America. The bill was laid over.

This Week’s Floor Sessions

On Thursday, the Senate passed HF 130, authored by Senator Claire Robling (R-Jordan), as amended by conference committee, in a 37 – 28 vote.  This is the Phase One budget bill which was passed earlier by the House.  The bill was promptly vetoed by Governor Dayton.

The Senate also passed SF 56, authored by  Senator Dave Thompson (R-Lakeville), which provides school district budget relief by freezing public school employee pay for two years.  After multiple unsuccessful attempts to amend the bill, the bill passed on a 36-29 vote.

HF 1, authored by Representative Dan Fabian (R-Roseau), the environmental review and permit streamlining bill, passed off the House floor Thursday with a 82-42 vote.  The bill puts into effect initiatives ordered by Governor Dayton earlier this year but also adds legislature driven initiatives, including allowing appeals of environmental permits to skip district courts and go straight to the state Court of Appeals, and allowing third parties to conduct their own draft environmental reviews.  The companion bill, SF 42, awaits action in the Senate Finance Committee.  The bill is moving ahead of a report expected to be released February 21, 2011, from the Office of the Legislative Auditor.  That report will discuss current environmental review and permitting practices and offer suggestions for improvement.

Committee Deadlines

The three committee deadlines for the 2011 session were approved yesterday in the House.  The first deadline is March 25 when all finance bills must be out of their committees and be sent to the House Ways and Means Committee.  The second deadline is the first policy deadline and has been set as April 29 with a second policy deadline of May 6.  The February Budget Forecast is expected to be released during the week of Feb. 28, leaving legislators just over three weeks until the first committee deadline.

Renewable Development Fund

The Office of the Legislative Auditor (OLA) testified Tuesday before the  House Environment, Energy and Natural Resources Policy and Finance Committee on its October 2010 report on the Renewable Development Fund.  The fund was established in 1994 as part of negotiations that allowed nuclear waste storage at Prairie Island, the Xcel facility near Red Wing.  The idea was that the fund would be used to help generate renewable sources of electricity through solar, wind, hydro and biomass methods.  However, the report suggested the fund was not being used to support those efforts.  Joel Alter from the OLA stated, “The largest project funded by the RDF was something that the Legislature authorized — a coal-based power plant for clean coal energy that did not involve a form of renewable energy.” OLA suggested legislators spend this session answering a few key questions surrounding the administration of the fund, the recouping of administrative costs using the RDF, providing greater transparency and accountability, as well as whether the private fund held by Xcel should be brought under State supervision.  Chair Denny McNamara (R-Hastings) stated he felt, as a result of this report, it was likely there would be a bill introduced this session.

Liquor on Sundays?

If a bipartisan group of Senators gets their way, Sunday liquor sales are a possibility.  The movement to repeal the ban on liquor store sales on Sundays is heating up at the Capitol but the Minnesota Licensed Beverage Association (MLBA) is strongly opposed.  The MLBA believes the change would effectively force stores to open on Sundays but they claim resulting sales would not cover the additional business costs.  Not all store owners agree.  Stores located near the Wisconsin border, which allows liquor sales on Sunday, argue they lose thousands of dollars of revenue to the neighboring state.  Of the states surrounding Minnesota (Iowa, North Dakota, South Dakota, Iowa and Wisconsin), all offer liquor store sales on Sunday, as does Canada.  A 2009 Minnesota Department of Revenue analysis found the change would result in negligible new tax revenue for the state.  While the liquor store sales would increase, it would likely mean a decrease in bar sales, which are more heavily taxed.

The Viking stadium debate officially began this week. Ted Mondale, the newly appointed Chair of the Metropolitan Sports Facilities Commission, testified this week in the Senate Committee on Local Government and Elections. He told legislators that Governor Dayton supports a new Vikings facility but believes it is important that the facility be a “people’s” facility and should be able to be utilized year round by a variety of organizations. Governor Dayton appears to be taking a strong interest in Minnesota sports facilities, as his bonding bill included money to do maintenance at Target Center, the home of the Minnesota Timberwolves, and funding for a new St. Paul Saint’s baseball stadium.

The repeal of the moratorium on construction of nuclear power plants (SF4 Koch R-Buffalo) passed off the Senate floor Wednesday on a 50 to 14 vote. DFL Senators Ellen Anderson (DFL- St. Paul), Linda Higgins (DFL-Minneapolis), John Marty (DFL-Roseville) and others made multiple attempts to amend the bill, all of which failed. The companion bill (HF 9) authored by Representative Joyce Peppin (R-Rogers), was previously heard in the House Environment, Energy and Natural Resources Policy and Finance Committee and re-referred to the House Commerce and Regulatory Reform Committee where it will be heard on Wednesday, February 9, 2011, at 2:30 p.m.

The bill repealing the ban on new electric energy from coal fired power plants, HF 72 authored by Representative Mike Beard (R-Shakopee), cleared its first hurdle passing out of the House Environment, Energy and Natural Resources Committee on an 11 to 6 vote. The bill now moves to the House Commerce and Regulatory Reform Committee.

Governor Proposes 2011 Bonding Bill

Governor Dayton released his bonding bill on Monday. Governor Dayton described the projects he has selected for the bonding bill as shovel ready or paint and repair projects that focused on downtown revitalization projects. He is describing this bill as a jobs initiative and noted jobs as his reason for proposing a bonding bill this year instead of waiting until next year, as is historically the case. He touted his proposal as extending the hand of compromise to the Legislature, because he listed $531 million worth of projects and invited the Legislature to add $500 million in its bonding priorities.

Joining Governor Dayton at the press conference were Ryan Construction workers, U of M Students, Minnesota Management and Budget Commissioner Jim Showalter, the new Assistant Commissioner of the Treasury Division Kristin Hanson, and the Mayor of Rochester Ardell Brede. Included in the bill is the Mayo Civic Center project which the Mayor stated would bring 400 construction jobs, and support for the Mayo Clinic, Minnesota's largest private employer. The other big project discussed was the new technology building for the University of Minnesota. When asked about a bonding bill for next year, Governor Dayton responded he hopes there will not be a need if this year’s bonding bill is adequate. He did not give any "must have" projects. As long as the bill presented to him by the Legislature had quality projects that put Minnesotans back to work, he said he would sign the bill. Some of the projects included in this bill had been vetoed by Governor Pawlenty in prior bonding bills. Republican leaders quickly dismissed the idea of a bonding bill this year saying it was irresponsible in the face of a $6.2 billion deficit.

Campaign Finance Reports Released

The Republican party, for the first time since 1972, holds a majority in the Minnesota Senate. End of the year campaign finance reports released this week show the party was able to pull off this historical feat spending significantly less than the DFLers. The Senate DFL Caucus reported raising $2.5 million while the Republican Senate Victory Fund raised $910,000. The Senate Victory Fund finished the year with $100,000, while the DFL Senate Caucus had only $1,500 remaining. The Republicans also spent less than the DFL in House races but again ended-up with the majority. The DFL House Caucus reported spending $2.5 million on House races while the Republican Caucus reported only $1.7 million. It is important to note these numbers only represent part of the funding picture, as they do not include the spending of outside groups. The Republicans hold a 37-30 majority in the Senate and a 72-62 majority in the House.

State Budget Process

A bill making its way through the House would change the way lawmakers balance the state budget. HF 2, authored by Representative King Banaian (R-St. Cloud), would require lawmakers to build the budget from scratch assuming every state agency to have a current budget of zero. Agencies would give input on funding for each individual program they support. The bill passed out of the House Government Operations and Elections Committee and was referred to the House State Government Finance Committee. The Senate companion, SF 146, authored by Senator Roger Chamberlain (R-Lino Lakes), awaits action by the Senate State Government Innovation and Veterans Committee.

Looking Ahead

Looking ahead, Governor Dayton will give his first State of the State Address on Wednesday, February 9, at noon. The Governor has also stated he will release his budget proposal on February 15, with the February budget forecast due from Minnesota Management and Budget on February 28.

Legislators will recess from 3:00 p.m. on Monday, April 28, until Tuesday, April 26, for the Easter and Passover observances.

At a press conference this morning with the Commissioners of Natural Resources and the Pollution Control Agency, Governor Dayton announced adoption of an executive order directing his commissioners to "accelerate and simplify environmental review and permitting". The Commissioners are also directed to establish a goal for each of their agencies of deciding on applications for environmental or natural resources permits within 150 days of when the project application is deemed complete. Legislation to accomplish the same objective is progressing through the Legislature.

Sertich Steps Down

The first full week of the 2011 Session included some big issues and a memorable retirement speech. Former Majority Leader Tony Sertich was appointed by Governor Dayton to the Iron Range Resources and Rehabilitation Board. Sertich gaveled in the House Session on Thursday, January 13, 2011 and gave a moving retirement speech combining laughter with a few tears. (You can view the link here)

New Roles for Members

Many of the new GOP Chairs are testing their skills as committee chairs and former chairs are learning how to be minority members. For example, House Health and Humans Services Chair Jim Abeler (R-Anoka) was questioned about bringing in Minnesota Management and Budget to provide an overview of the 2005 government shutdown. Abeler made it clear that Minnesotans need to know what their "insurance" policy for government services includes in the event of a government shutdown because of inability of the Governor and Legislature to agree on a budget. DFL members suggested this sent a negative message to the public regarding working together toward compromise.

Nuclear Moratorium Repeal Passes First Committee

The House Environment, Energy and Natural Resources Policy and Finance Committee chaired by Rep. Denny McNamara (R-Hastings) heard House File 9 authored by Rep. Peppin (R-Rogers), a bill to repeal Minnesota's moratorium on constructing new nuclear power plants in the state. The bill passed 10 - 6 and was re-referred to the House Commerce and Regulatory Reform Committee. The companion bill, Senate File 4, authored by new Senate Majority Leader Amy Koch (R - Buffalo), will be heard in the Senate Energy, Utilities and Telecommunications Committee next Thursday.

New Commissioner Appointments

Governor Mark Dayton has made many of his Cabinet appointments. For a complete list go to Governor Dayton's website.  Today Dayton appointed Maple Grove police chief Ramona Dohman as the next commissioner of the Minnesota Department of Public Safety. Dohman served as the immediate past president of the Minnesota Chiefs of Police Association. She takes over from Commissioner Michael Campion who was one of the longest serving commissioners under former Governor Tim Pawlenty.

 

Minneapolis, MN – January 5, 2010. Winthrop & Weinstine, P.A., has announced that shareholder Michael J. Rothman has just been appointed by Governor Mark Dayton as Commissioner of Commerce of the State of Minnesota. Michael will be leaving the firm, and the position begins effective January 12, 2011.

Michael has been a shareholder with the firm since 2002, and has co-chaired the firm's Insurance & Financial Services practice group. Prior to joining the firm, he practiced law in California, and served as a staff member for the Minnesota Senate and as a law clerk for the Minnesota Court of Appeals. He has also taught as an adjunct professor at the University of Minnesota Law School in Insurance Law and Regulation.

The Minnesota Department of Commerce’s mission is to ensure equitable commercial and financial transactions and reliable utility services by: regulating and licensing business activity in more than 20 industries; investigating and resolving consumer complaints; advocating the public's interest before the Public Utilities Commission; and administering various state programs.

Scott Dongoske, firm president, said, “We wish Mike well in this exciting new chapter of his professional career.”

Michael received his J.D. from the University of Minnesota Law School and his B.A. from Carleton College. Mike resides in Minnetonka, MN, with his wife Shari Latz Rothman, a professional harpist, and their three children.

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About Winthrop & Weinstine, P.A.

Winthrop & Weinstine is an exciting, dynamic corporate business and commercial litigation law firm focused on building strong client relationships through shared values and commitment to excellence. A "Top 10 Law Firm" in Minnesota, with 91 attorneys in over 25 practice areas, the firm's clients experience responsive, service-driven attorneys who passionately champion client issues, using innovation rather than outmoded tradition and creativity rather than standard formulas. The firm enjoys steady growth by meeting the diverse needs of its clients from individuals and emerging-growth businesses to Fortune 500 companies in an impressive array of industries throughout the Twin Cities and nationally.

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Click on the link to view the press release on Winthrop & Weinstine's website.

Minneapolis, MN – November 10, 2010
Winthrop & Weinstine, P.A., is pleased to confirm that Tom Hanson, the current Commissioner of Minnesota Management and Budget (MMB), will be joining the firm effective December 2, 2010. Tom has held the position of Commissioner since December of 2006, when Governor Tim Pawlenty appointed him Commissioner of Finance. He will be joining Winthrop & Weinstine’s Legislative and Regulatory practice group advising clients of the firm in their dealings with federal, state and local governments.

Prior to being appointed Commissioner, Tom served as Deputy Chief of Staff and Director of Legislative and Cabinet Affairs for Governor Tim Pawlenty from 2003 to 2006. Prior to that he held several positions with the Minnesota House of Representatives including the position of Legislative Director to the Speaker of the House from 1999 to 2003. He also served in Washington DC from 1985 to 1991 on the staff of Congressman Arlan Stangeland (R, MN).

During Tom’s tenure at MMB, Minnesota retained its position in the elite tier of AAA rated states, maintaining that bond rating from two of the three bond rating agencies. He successfully merged the Departments of Finance and Employee Relations, creating MMB, and led the effort to replace Minnesota’s aging accounting and procurement technology system.

“Tom will be a terrific addition to the firm. His thorough knowledge of legislative and regulatory law and his many key roles in the Executive and Legislative branches of Minnesota government make him an extraordinarily valuable resource for our firm and our clients," said Scott Dongoske, firm president.

Tom is a graduate of Concordia College in Moorhead and the George Mason University School of Law in Arlington, Virginia. He currently resides in Maple Grove with his wife, Kris and their son, Sam.

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About Winthrop & Weinstine, P.A.
Winthrop & Weinstine is an exciting, dynamic corporate business and commercial litigation law firm focused on building strong client relationships through shared values and commitment to excellence. A "Top 10 Law Firm" in Minnesota, with 93 attorneys in over 25 practice areas, the firm's clients experience responsive, service-driven attorneys who passionately champion client issues, using innovation rather than outmoded tradition and creativity rather than standard formulas. The firm enjoys steady growth by meeting the diverse needs of its clients from individuals and emerging-growth businesses to Fortune 500 companies in an impressive array of industries throughout the Twin Cities and nationally.

 

No one can say Minnesota elections are boring!  Even the best pollsters and political handicappers were left scratching their heads as the final election tallies came in late Tuesday night and early Wednesday morning.  The evening began with the Democrats controlling both the House and Senate by considerable margins.  So comfortable in fact, that the Senate DFL had a veto-proof majority and the House DFL was within 3 votes of enjoying a supermajority as well.    After the election, both bodies will now be in Republican control for the first time in 38 years.  When the 87th Legislature convenes Jan. 4, 2011, it is likely that 59 of the 201 members will be new, with only eight of the newly elected having previous legislative experience.

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Governor’s Race
In the Governor’s race, former Senator Mark Dayton holds a lead of just 8,900 votes over Republican Challenger Tom Emmer, and a recount will begin on November 29.  If Dayton is ultimately victorious and replaces current Republican Governor Tim Pawlenty, the political landscape in Minnesota will essentially be turned upside down from the current environment.

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State House Races
When the polls closed on Tuesday, Republicans defended every incumbent seat in the House and turned a 84-47 deficit in to a 72-62 majority.  The 25 seat pick-up erases the gains that the Democrats made in the last two election cycles and brings even more new faces to the Capitol.  Several races are close enough to trigger an automatic recount.  Under Minnesota’s election law, if a race is within .5%, a state financed recount will take place.  If the margin is wider than half a percent, the candidate may conduct a recount, but the State will not finance the recount.  In District 1B, longtime incumbent Bernie Lieder (DFL-Crookston) lost a very close race to Deb Kiel (R).  According to the Secretary of State’s office, Kiel won the race by 134 votes.  The race between Maria Ruud (DFL-Minnetonka) and Kirk Stensrud (R) is reported to have Stensrud victorious by a margin of 50.28 percent to 49.66 percent.  However, neither of these races fall within the percentage that would require an automatic recount.  The three races that appear to be headed for a recount are 15B, 25B and 27A.  In the St. Cloud area, House District 15B,  King Banaian (R) is up by a mere 10 votes over Carol Lewis (DFL).  This is an open seat that was vacated by three term DFLer Larry Hawes who retired.  Incumbent David Bly (DFL- Northfield) lost to challenger Kelby Woodard (R) by 31 votes in House District 25B.  Local businessman Rich Murray (R) defeated second term incumbent Robin Brown (DFL-Moscow Township) by 58 votes in 27A in the Albert Lea area.    

 Other House races of note include:

• Defeat of longtime incumbent and Ways and Means Committee Chair Loren Solberg (DFL-Grand Rapids) to Carolyn McElfatrick (R). 
• Chairman of the Agriculture and Veterans Affairs Committee, Al Juhnke (DFL-Willmar), went down in defeat to Bruce Vogel (R)
• Iraqi war veteran John Kriesel (R) was elected in 57A in what was considered a strong DFL district. 
• Democrats had high hopes of picking up the seat being vacated by Rep. Laura Brod (R-New Prague), but Mick McGuire was defeated by Glenn Gruenhagen (R) 51 to 49 percent. 
• Keith Downey (R-Edina) held off a challenge by Kevin Staunton (R) in the Edina area race.
• Former state Senator Linda Runbeck (R) returned to the Legislature by beating incumbent Rep. Paul Gardner (DFL-Shoreview). 
• Former House Majority leader Ted Winter (DFL) was unsuccessful in his bid to defeat Joe Schomacker (R) and return to the Legislature.  This seat was open after Rep. Doug Magnus (R) decided to run for the Minnesota Senate.
• Democrats also targeted House minority leader Kurt Zellers (R-Maple Grove), but Zellers won handily by an 11 point margin and is now likely to become the next Speaker of the House.

Several rematches also took place, this time with the Republicans finding themselves on the winning side. 

• Sondra Erickson (R) beat Gail Kulick Jackson (DFL-Milaca) by approximately 11 percentage points to reclaim the seat she once held in district 16A. 
• In Eagan, Diane Anderson (R) was able to defeat Sandra Masin (DFL-Eagan) after losing to Masin in the last election by approximately 1,000 votes. 
• On the other side of the district, Doug Wardlow (R) beat Mike Obermueller (DFL-Eagan).  Although technically not a rematch, Doug is the son of Lynn Wardlow who Obermueller defeated in 2008. 
• Like Eagan, both Woodbury seats also went the Republican’s way this time when Julie Bunn (DFL-Lake Elmo) and Marsha Swails (DFL-Woodbury) were beaten by Kathy Lohmer (R) and Andrea Kieffer (R) respectively.

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On the Senate side
The Senate election results were arguably even more shocking than the Republicans retaking the House majority.  The Senate Republicans were virtually neutralized by the Democrat’s 46-21 majority prior to the election.  In fact, since the State went to partisan elections in the early 1970s, the Republicans have never been in the majority in the Senate.  Although not official until the canvassing board meets on November 23, it appears that the Republicans will now hold 37 seats to the Democrat’s 30 seats. 

To highlight a few of the races:

• Longtime Senator from Coon Rapids, Leo Foley, was defeated by newcomer Benjamin Kruse (R) by approximately 5 percentage points. 
• Another shocker was Don Betzold’s (DFL-Fridley) loss to Pam Wolf (R) in SD51.  Betzold was a committee chair and held the seat for 18 years. 
• Former House member Paul Gazelka (R) was successful in his bid to replace Senator Paul Koering (R-Fort Ripley) by defeating Taylor Stevenson (DFL).  Senator Koering lost the Republican endorsement to Gazelka but decided to wage a write-in campaign anyway.  Approximately 3,125 write-in votes were cast in the election, but it is unclear how many of these votes were actually cast for Koering. 
• In a rematch, former state Senator Sean Nienow (R) beat current Senator Rick Olseen (DFL-Harris) 56 to 44 percent. 
• Former Rep. Carla Nelson (R) unseated incumbent Senator Ann Lynch (DFL) in the Rochester area.
• Former Rep. Barb Goodwin (DFL) defeated Gina Bauman (R).  Goodwin beat Senator Satveer Chaudhary (DFL-Fridley) in the DFL primary after questions were raised about his taxes.  Chaudhary was also accused of using his position as Chair of the Senate Environment Policy Committee to get special treatment for a lake where he owned a cabin. 

Other incumbent defeats were:

• Senator Kathy Saltzman (DFL) of Woodbury who lost by over 1,000 votes to Ted Lillie (R).  Lillie ran as a Republican and is the brother of current House member Leon Lillie (DFL-North Saint Paul). 
• In the Southern metro, two other first termers were defeated when Ted Daley (R) beat Senator Jim Carlson (DFL-Eagan) and Dan Hall (R) defeated Senator John Doll (DFL-Burnsville). 
• Al DeKruif (R) defeated incumbent Senator Kevin Dahle (DFL-Northfield) and Independent John Grimm by getting 45 percent of the vote in SD25. 
• Senator Sharon Erickson Ropes (DFL-Winona) lost a close race to Jeremy Miller (R) in SD31.
• Senator Sandy Rummel (DFL-White Bear Lake) was defeated by Roger Chamberlain (R) in SD53. 
• Republican John Carlson defeated Senator Mary Olson (DFL-Bemidji) by a commanding 55 to 45 percent margin in Senate District 4. 
• Gretchen Hoffman (R) beat incumbent Senator Dan Skogen (DFL-Hewitt) by over 3,000 votes in SD10.
• Dave Brown (R) defeated freshman Senator Lisa Fobbe (DFL-Zimmerman) in SD16. 

 In open Senate seats:

• Rep. Doug Magnus (R-Slayton) defeated Kevin Vickerman, a relative of Senator Jim Vickerman (DFL-Tracy), who retired after the 2010 session. 
• John Howe (R) will now represent the Red Wing area after defeating Joe Fricke (DFL).  The Red Wing seat was formerly held by longtime Senator and Transportation Committee Chair Steve Murphy (DFL-Red Wing).
• John Pederson (R) defeating Bruce Hentges (DFL) in SD15;
• Scott Newman (R) defeating Hal Kimball in SD18;
• Gary Dahms (R) defeating Al Kruse (DFL) in SD21; 
• Dave Thompson (R) defeating Steve Quist (DFL) in SD36; and
• Michelle Benson (R) defeating Paul Meunier (DFL) in SD49. 

 The Democrats were able to win an open seat on Saint Paul’s east side in SD67, the seat vacated by the retirement of Senator Mee Moua, where John Harrington (DFL) defeated Krysia Weidell (R).  The other open seat pick up by the Democrats is Roger Reinert’s (DFL-Duluth) win over Rilla Debot Opelt in SD7.  This seat was vacated by Yvonne Prettner Solon’s run for Lieutenant Governor with Mark Dayton.  Katie Sieben (DFL-Newport) was able to hold on in spite of a strong challenge by Karin Housley (R) in SD57.  Terri Bonoff (DFL-Minnetonka) was able to hold off challenger Norann Dillon (R) in SD43, and Capital Bonding Committee Chair Keith Langseth (DFL-Glyndon) pulled out a win against challenger Jeff Backer (R).

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DFL Caucuses Elect Leaders
The House DFL Caucus elected Rep. Paul Thissen from Minneapolis as its Minority Leader while the Senate DFL Caucus elected Senator Tom Bakk from Cook as its leader.  The Senate Republican Caucus meets today to elect its leaders while the House Republican Caucus meets tomorrow.

 

Two recent polls were released this week and have conflicting results in the Minnesota gubernatorial race.  The KSTP/Survey USA poll was conducted October 24 to 27, and included land line and cell phone numbers, surveying 900 likely voters with a margin of error of 4 points.  The MPR/Humphrey Institute poll interviewed 750 likely voters during October 21 to 25, with a margin of error of 3.6/5.5 percent.

In the MPR/Humphrey Institute poll, DFLer Mark Dayton garnered 41 percent to GOP Tom Emmer's 29 percent.  The IP candidate Tom Horner ended up with 11 percent.  Dayton's numbers have improved from the initial MPR poll at 34 percent to the 12 point lead projected now.  Emmer dropped from 34 to 29 percent. The poll shows 19 percent are still undecided.

The KSTP/SurveyUSA poll shows dramatically different results.  That poll projects the race as a dead heat.  Dayton comes in with 39 percent to Emmer's 38 percent while Horner is a distant third at 13 percent.  Other and undecided voters garnered 9 percent.  Emmer increased his support with men and younger voters while Dayton's lead with women voters dropped 14 points. Dayton has a strong 9 point lead with the over 50 crowd.

The Minnesota Governor's race is being watched closely.  DFLers have not elected one of their own as Governor since 1986.  Outside groups have taken a big interest in this race as well by making significant independent expenditures.  The Alliance for a Better Minnesota, a liberal group, consisting of funding from unions, the Democratic Governors Association and other donors has spent $4.8 million already.  On the GOP side, MN Forward, backed by business groups has spent $1.7 million.  One other group, Minnesota's Future, has received support from the Republican Governors Association totaling about $1.3 million.

Special Session Set for Monday

Governor Tim Pawlenty is convening the Minnesota Legislature on Monday, October 18, 2010, at 1 p.m. for a special session.  Pawlenty waited for a federal disaster declaration regarding the flooding in southern Minnesota before calling the special session.  The Federal Emergency Management Agency made the declaration yesterday.  FEMA funds will be available to local and state government and some non-profit agencies.  The agency is still considering aid to individuals.

The Governor, along with House and Senate leadership, had previously set up a framework and a tentative agreement to spend up to $80 million in state money on disaster relief for recent flood damage in 21 counties and tornado damage in northern Minnesota from July.  The federal declaration provides the state with disaster relief funds to help cover the estimated $200 million in damages.  The framework of the draft bill includes $32.5 million from the state general fund and $26.7 million in general obligation bonds to meet the state portion of the emergency funding.

Pawlenty wants to limit the special session to a one day session dealing with disaster relief only; however some legislators have proposed anti-bullying legislation and have discussed including early enrollment for federal health care as well.

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New Poll on the Governor's Race Released

A new KSTP/Survey USA poll was released today.  Mark Dayton (DFL) is in the lead with 42 percent, up 4 points from the last poll. Tom Emmer (Republican) came in with 37 percent, up one point.  The Independence Party candidate Tom Horner is a distant third with 14 percent, a drop of 4 percent from the last poll.  Additionally, 7 percent would support another candidate or remain undecided.

This poll was conducted October 11 - 13 with a pool of 1,000 likely voters of which 712 responded.  The margin of error is +/- 3.7 percent.

Plans for Special Session Advance
Governor Tim Pawlenty and legislative leaders presented a united front on September 27 in announcing their support for a half-day special session in early October to deal with the devastating flood in southern Minnesota. Leaders sat down with the Governor in a planning session and held a press conference to announce their unified commitment to helping cities and counties rebuild.

The special session will likely occur between October 7 and October 12. The Governor and Legislature will use an existing template put into law in 2007 to deal with flooding issues. The Governor said there will be a cushion of about $235 million on the bottom line at the end of the current biennium on June 30, 2011. This amount is expected to be enough to cover the State's portion of flooding repair costs. Pawlenty noted use of the State's cash flow account will be necessary to make payments until the cushion is available at the end of the biennium.

FEMA representatives will be in Minnesota making assessments this week or next. As the data comes in, the Legislature will simultaneously plan for the predicted special session. Once Minnesota qualifies for FEMA funding, leaders will make decisions on how to move forward. When questioned about past abuse of flood relief money, Governor Pawlenty and Speaker Kelliher noted the Legislature has learned from past mistakes and they will write safeguards and specific requirements into the law.

Governor Pawlenty stated he would ask President Obama to declare the 34 county Southern Minnesota region a federal disaster area by the end of this week or early next week.

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A Flood of Polls
There has been a flood of polls recently on the Minnesota gubernatorial race. Three respected polls show the race a dead heat. The Star Tribune poll, however, shows DFLer Mark Dayton with a nine-point lead over Republican Tom Emmer. The Star Tribune is taking some heat from Republican Party leadership for their polling methods which, they allege, "oversamples Democrats and undersamples Republicans."

The election on November 2, 2010, is five weeks away. The rhetoric, advertising and get-out-the-vote efforts will intensify especially for those undecided voters. In other polling notes, the surveys indicate Independence Party candidate Tom Horner is pulling more support from Democrats than Republicans. Forty percent of likely voters say an endorsement by Governor Pawlenty would weaken their support for Emmer with 25 percent saying it would increase their support and 44 percent said an endorsement by President Obama would weaken their support for Dayton with 30 percent saying it would increase their support.

Rasmussen Reports poll results:
500 likely Minnesota voters polled on September 22, 2010
Republican Tom Emmer - 42 percent (up 6 points from August)
Democrat Mark Dayton - 41 percent (down 4 points from August)
Independent Tom Horner - 9 percent (down 1 point from August)
Other Candidates - 6 percent
Not sure - 2 percent

MPR/Humphrey Institute poll reports:
Republican Tom Emmer - 34 percent
Democrat Mark Dayton - 34 percent
Independent Tom Horner - 13 percent
Other/don't know/ refused - 19 percent

Survey USA/KSTP poll numbers:
1,000 Minnesota adults September 12 - 14, 2010
Republican Tom Emmer - 36 percent
Democrat Mark Dayton - 38 percent
Independent Tom Horner - 18 percent
Other/don't know/refused - 8 percent

Star Tribune/Minnesota Poll:
949 likely voters polled September 20 - 23, 2010
Republican Tom Emmer - 30 percent
Democrat Mark Dayton 39 percent
Independent Tom Horner 18 percent

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State May Retain its Eight Congressional Seats
A report released this week by Election Data Services indicates Minnesota may retain all eight of its Congressional seats for the next decade. The report projects Minnesota will retain its Eighth Congressional District seat by 15,643 people. The same group had issued a report last year that showed Minnesota losing a seat after the 2010 census. The final census data will not be tallied until December.

KSTP SurveyUSA Gubernatorial Poll
KSTP released a statewide poll taken this week showing Mark Dayton with a significant lead over the DFL endorsed candidate, Margaret Anderson Kelliher, and Matt Entenza in the DFL gubernatorial primary. Voters were asked that if the primary election were held today, which DFL candidate they would support to face Republican Tom Emmer and the endorsed Independence Party candidate, Tom Horner. Dayton has a clear lead with 39 percent of the vote. Kelliher polled at 26 percent, and Entenza at 22 percent. Only 11 percent of participants were undecided. The same poll showed Dayton as the only DFL candidate capable of beating Tom Emmer, the Republican candidate.  The poll had a 500 sample size and a 4.5 percent margin of error.

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State Legislature Agrees on Budget Bill
After days and nights of negotiations and a brief special session this morning, the Legislature passed and Governor Pawlenty is expected to sign a budget balancing bill to address the state's nearly $3 billion shortcoming in the current biennium. After working nearly nonstop throughout the weekend, a budget deal was finally agreed upon by Governor Pawlenty and the DFL and Republican leaders. The agreement was made shortly before midnight on Sunday and because of the Sunday midnight deadline for passing bills in the current biennium, the Legislature adjourned its regular session and the Governor promptly called a special session beginning at 12:01 am this morning.

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Bigger Budget Woes
The Minnesota Supreme Court upheld a lower court’s decision and found that Governor Pawlenty had overreached his authority when he cut $2.7 billion from the state’s budget without legislative approval in order to balance the State budget for the current biennium, which began July 1, 2009. The decision came midmorning on Wednesday, less than two weeks before the end of the legislative session. The 4-3 opinion ruled said that Pawlenty illegally used his unallotment authority when he eliminated a nutrition program by cutting its funding last year.  The ruling said “because the legislative and executive branches never enacted a balanced budget for the 2010-2011 biennium, use of the unallotment power to address the unresolved deficit exceeded the authority granted to the executive branch by the statute.”

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Democrats Are Headed North
DFLers are off to Duluth this weekend to endorse a candidate for governor at their state convention. The list of candidates include Minneapolis Mayor R.T. Rybak, Speaker of the House Margaret Anderson Kelliher, Senator John Marty of Roseville, former Representative Matt Entenza, and Representatives Tom Rukavina and Paul Thissen. Entenza does not plan to abide by the party's endorsement and will run in the August primary along with former U.S. Senator Mark Dayton and Ramsey County Attorney Susan Gaertner. Kelliher and Rybak were the clear leaders in straw polls conducted at the February precinct caucuses but the race is still fair game. Over one-third of the 1,390 delegates claim to be undecided.

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Back to Work
State legislators returned to St. Paul on Tuesday ready to work after returning from a week long break for the Easter and Passover holidays. With the legislative session now more than half over, lawmakers have made significant progress but there is more work to do in the coming weeks on budget and policy issues.

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