2014 Legislature Adjourns

Dear Neighbors,

Tonight the Minnesota House adjourned sine die (“indefinitely” for the year), marking the end of the 88th biennium of the Minnesota Legislature. Lawmakers will not return to St. Paul until next January, unless we are called back to special session under extreme circumstances.

Next week I will provide a recap of the 2014 legislative session. For now, here is an update about this week’s events at the State Capitol.

In this edition:

1) Bonding Bill Borrows $846 Million

2) Should Legislators Be Held Accountable for Their Pay Raises?

3) MNsure Tax Increases by 133%—Not What We Were Told to Expect

4) Revenue Below Forecast Third Consecutive Month

1) Bonding Bill Borrows $846 Million

The idea behind capital investment/bonding bills is to use the state’s credit card to borrow for critical infrastructure projects of statewide significance. These include road and bridge repairs, state parks, prisons, buildings and maintenance at our colleges, and other public utility services.

Article XI, Section 5 of the Minnesota Constitution reads (in part) as follows:

Public debt may be contracted and works of internal improvements carried on for the following purposes:

(a) to acquire and to better public land and buildings and other public improvements of a capital nature and to provide money to be appropriated or loaned to any agency or political subdivision of the state for such purposes if the law authorizing the debt is adopted by the vote of at least three-fifths of the members of each house of the legislature;

Unfortunately, bonding bills are often ripe with pork-barrel spending that help secure enough votes to pass it with a constitutionally mandated 3/5th majority, which equals 81 votes in the Minnesota House.

The bonding bill that passed the Legislature and will soon be signed into law by Gov. Dayton borrows $846 million through selling “general obligation” bonds to be repaid by general taxes. A supplemental bonding bill also spends $200 million in cash from the state budget surplus and other sources.

While I would support putting funds toward significant road and bridge work, the $39 million in bonds and $50 million in cash for these projects are minimal compared to the millions of dollars that will go toward questionable upgrades to museums, civic centers, and even a snow making machine, none of which rise to the level of being of statewide significance.

While the bonding bill contained a fair number of worthwhile projects, the bad outweighed the good and I voted against the bill. My Democratic colleagues have increased spending by $4 billion this biennium, three times the projected growth of the economy. We must show some restraint and hold government accountable to hardworking taxpayers.

2) Should Legislators Be Held Accountable for Their Pay Raises?

How much should legislators be paid, and who should set their level of compensation?

Under the current system, legislators decide if they deserve a pay raise, and must answer to the voters for our compensation decisions. That’s probably why the state hasn’t seen legislative pay raises since 1999; representatives and senators are all too aware of the election-time consequences should they bump their annual salaries above the current rate of $31,140.

However, my DFL colleagues want to give a new politically-appointed board the power to set legislative pay. They have put a constitutional question on the 2016 ballot that will read:

“Shall the Minnesota Constitution be amended to remove state legislators' ability to set their own salaries, and instead establish an independent, citizens-only council to prescribe salaries for legislators?”

(Note: States that have established a legislative pay council have seen legislators’ pay rise as a result, sometimes by double digit percentage increases.)

At first glance it seems like a good idea to “Remove Lawmakers' Power to Set Their Own Pay” (the title of the question). Who wouldn’t want to take away the temptation for lawmakers to raise their own pay?

But I believe this approach is misleading to the public. When lawmakers’ power to set their own pay is removed, so are accountability standards to the people who elected them. If part-time legislators truly need greater pay, let them convince the public in an open and honest way—not hidden behind a politically-appointed council.

3) MNsure Tax Increases by 133%—Not What We Were Told to Expect

MNsure, Minnesota’s version of Obamacare, is designed to stay financially sustainable by imposing a gross premium tax on health care plans sold through the health insurance exchange. That tax is hidden to consumers and paid for by the health plans that, in turn, pass increased costs on to consumers outside MNsure.

Throughout the committee process and passage of the MNsure bill last year, Minnesotans were promised the tax would stay around 1.5-2% and not jump to the federal exchange rate of 3.5%. They were also promised MNsure would result in an average annual savings of $500 for families.

However, this week the MNsure board of directors unanimously voted to raise the gross premium tax by 133%, from 1.5% to 3.5%.

On another note, a new report by the McKinsey Center for U.S. Health Care Reform indicates that 74% of Obamacare enrollees were previously insured. Remember, here in Minnesota, MNsure cannot reveal how many enrollees have insurance for the first time because they do not track that information.

Time and again we are seeing more and more problems from this questionable MNsure system. It is troubling Minnesota’s best-in-the-nation health care system has had to make so many unnecessary changes.

4) Revenue Below Forecast Third Consecutive Month

Year-to-date receipts are $78 million less than forecast, according to Minnesota Management and Budget. This is the third straight month where revenues have come in below forecast. What’s more, Minnesota employers shed 4,200 jobs in April.

While modest swings in revenues are not unusual, three months of shortfalls are cause for concern, and another reason state government needs to live within its means.

******

If you’re ever at the State Capitol, please do not hesitate to contact my office to set up a meeting. I can be reached at rep.joyce.peppin@house.mn or 651-296-7806. I’m here to serve you!

Have a wonderful weekend,

Joyce

**Encourage your neighbors and friends to sign up for my email updates at www.house.mn/34A