Campaign season is in full swing and the attack mailers are hitting mailboxes. Here's a fact check on the mailer that arrived on September 28th ("That blank check for migrating bird habitat..." with two ducks talking on the beach.)
The mailer is referring to a change to the non-game wildlife fund that is supported by a voluntary check-off (often called the "chickadee checkoff") on your income tax form. Revenue from the check-off goes to a dedicated fund at the DNR, which then protects habitat for non-game wildlife. Note: Ducks are not non-game wildlife! No blank check.
In 2010, The Pawlenty Administration and the DNR asked the legislature to specifically allow the use of this funding for protecting habitat in other countries. The reason was to protect habitat for migratory birds that live in MN during warmer months and then go south.
Here is the language that was passed with only 25 dissenting votes as part of the omnibus environment and natural resources policy bill. (The underlined language is what passed this year.) Governor Pawlenty also signed the bill.
2010 Minnesota Statutes, Chapter 361 (cited in mailing as House Journal, p. 12973, SF3275, May 12, 2010
Sec. 67. Minnesota Statutes 2008, section 290.431, is amended to read: 290.431 NONGAME WILDLIFE CHECKOFF. Every individual who files an income tax return or property tax refund claim form may designate on their original return that $1 or more shall be added to the tax or deducted from the refund that would otherwise be payable by or to that individual and paid into an account to be established for the management of nongame wildlife. The commissioner of revenue shall, on the income tax return and the property tax refund claim form, notify filers of their right to designate that a portion of their tax or refund shall be paid into the nongame wildlife management account. The sum of the amounts so designated to be paid shall be credited to the nongame wildlife management account for use by the nongame program of the section of wildlifeNone of the money provided in this section may be expended unless the commission has approved the work program. The state pledges and agrees with all contributors to the nongame wildlife management account to use the funds contributed solely for the management of nongame wildlife projects and further agrees that it will not impose additional conditions or restrictions that will limit or otherwise restrict the ability of the commissioner of natural resources to use the available funds for the most efficient and effective management of nongame wildlife. The commissioner may use funds appropriated for nongame wildlife programs for the purpose of developing, preserving, restoring, and maintaining wintering habitat for neotropical migrant birds in Latin America and the Caribbean under agreement or contract with any nonprofit organization dedicated to the construction, maintenance, and repair of such projects that are acceptable to the governmental agency having jurisdiction over the land and water affected by the projects. Under this authority, the commissioner may execute agreements and contracts if the commissioner determines that the use of the funds will benefit neotropical migrant birds that breed in or migrate through the state. in the Department of Natural Resources. All interest earned on money accrued, gifts to the program, contributions to the program, and reimbursements of expenditures in the nongame wildlife management account shall be credited to the account by the commissioner of management and budget, except that gifts or contributions received directly by the commissioner of natural resources and directed by the contributor for use in specific nongame field projects or geographic areas shall be handled according to section 84.085, subdivision 1. The commissioner of natural resources shall submit a work program for each fiscal year and semiannual progress reports to the Legislative-Citizen Commission on Minnesota Resources in the form determined by the commission.
I actually chaired the Environment and Natural Resources Policy Committee on the day that the DNR presented this idea to the legislature. In fact, I asked pointed questions about how we would be able to determine how well this funding would be used. DNR reported that reputable non-profit organizations whose financial records could be audited by the state would administer the funding. You can watch the video of the March 4, 2010 committee meeting here, and the discussion about this program starts at 2 hours 16 minutes and ends at about 2 hours 20 minutes. The DNR refers to a group called Southern Wings that would administer the funds.
In short, the mailer gives people the misleading idea that as a legislator I was responsible for using your tax dollars for overseas bird habitat. The facts are that funds for overseas habitat come from voluntary contributions by taxpayers on their state income tax form and there is no "blank check" for this program.
On August 18th, I attended a public meeting convened by the Metropolitan Airports Commission (MAC). The MAC was interested in having an annual meeting where they could answer questions about the airport, especially noise, from local residents. There were about 25 residents there, including some city council members from Blaine, Lexington, and Circle Pines.
The first issue raised by residents was that there was not a lot of advance notice about the meeting. I heard about it from a member of the airport's local community advisory council by e-mail on Monday, as did many of the attendees. There was a newspaper ad in one local paper but it was not very obvious. The MAC staff said that they would improve on communicating about the meeting in the future. (This all took about a half hour to discuss and people kept bringing it up, so I think they were sincere about improving communication next time!)
There was discussion about local perceptions of what the MAC, Anoka County, and/or Key Air (the operator of the airport) has or has not been trying to do regarding airport expansion. MAC staff said that there was no effort by the MAC to request extension of the east-west runway to 6,000 from 5,000 feet. The initiative last year came from Key Air and then Anoka County but then local residents began objecting. MAC staff also said that their planning document for the airport would have to show the need for an extension but there are no plans to do so. After some direct questioning, MAC staff responded that it was "not impossible but improbable" that any change would be made in the near future.
Here are some other informational highlights:
* Lifelink has a helicopter base at the airport for their air ambulance service in the north metro. This is new. * Airport staff deliver a pilot guide for the airport to non-local pilots upon landing and re-fueling. The guide shows what steps pilots should take for takeoff and landing to minimize noise. (I asked about this since on any given day the airport may not know what out-of-state planes will be heading to Minnesota.) * Federal law prohibits the airport from requiring the steps in the pilot guide, such as quiet times from 10:00 p.m. to 7:00 a.m. The guide is advisory. * A 2005 study from Wilder reports a local economic impact of the airport of $35 million as well as 103 on-airport jobs and 350 jobs total. (We didn't have a copy to look at though.) * About 80,000 "operations" (one takeoff or one landing = one operation) are expected in 2010. * There are 437 aircraft based at Blaine. * Recreational flights in the U.S. are expected to decline over time and corporate flights are expected to increase. * Newer jet aircraft are usually quieter than older models so technology is trending toward quieter planes.
The MAC has a noise complaint phone line at 612-726-9411. It is staffed from 8:00 a.m. to 5:00 p.m. Monday through Friday. You can leave a message at other times. We met the staff person who takes the calls. You can also make a complaint on-line. MAC staff said that complaints often involve one or two specific aircraft and they can follow up with the operator to give them to adhere to the pilot guide. Residents at the meeting discussed one particular type of plane that they have noticed making all lot of the noise--a Piaggio Avanti II--that looks like a "hammerhead shark."
Overall, I thought it was a good meeting. More like this one will take place in the future so that residents can discuss noise issues with the Metro Airports Commission. They DO want to hear from you.
Every year I post the results of my legislation with links to where you can find the actual bill language. These are my bills that passed. When the House and Senate each pass a similar bill but with different numbers, eventually only one bill number is used (or “substituted”) for conference committees, final passage, and action by the Governor. The bill number that is underlined is the substituted bill. An “omnibus” bill incorporates smaller bills on a similar topic to facilitate passage. Chapter numbers refer to 2010 Session Laws. Session laws are compilations of legislation passed by the legislature and acted upon by the Governor each year. Each chapter is one bill.
Public Safety
HF2864/SF2636: Electronicmonitoring of domestic abuse offenders. Inserted into an omnibus domestic violence bill (HF2608) and then substituted by SF2437, Chapter 299, Section 12. Self-initiated with assistance from the MN Coalition for Battered Women.House Public Information Services has a summary of the bill. I authored this bill as a response to the two domestic violence murders in Circle Pines and Lino Lakes in 2009.
HF1217/SF1568: Safe Drug Disposal Act. Chapter 223 and initiated by me. This bill makes it easier for law enforcement and county solid/hazardous waste staff to collect old prescription drugs and destroy them. I initiated the legislation as a way to keep people from flushing old drugs down the toilet, which leads to endocrine disrupting compounds that harm aquatic life getting into our rivers and streams. However, I discovered that law enforcement is very concerned about prescription drug abuse and they were very supportive. This bill didn’t go as far as I would have liked in terms of industry funding for drug collections, but it’s a good step forward.
Transportation
HF3779/SF3360: Metro transit bonding. Inserted in omnibus tax bill (HF3729), Chapter 389, Article 7, Section 8 and awaiting signature. Initiated by the Metropolitan Council. This bill allows the Met Council to sell bonds for transit and paratransit assets like bus shelters, new buses, park-and-ride facilities, etc. They have been retiring their old debt at about the same rate that they are incurring new debt, and they require statutory authority to borrow.
HF1373/SF1226: Transportation access council. Inserted into Omnibus Transportation Policy Bill (SF2540/HF2807), Chapter 351, Section 51, initiated by Sen. Scott Dibble and me. A previous version of this bill was in the vetoed 2009 Omnibus Transportation Policy Bill. The purpose of the bill is to strengthen the Interagency Committee on Transportation Coordination (ICTC). We stand to save some serious money because we have lots of overlapping paratransit programs at the federal and state level for paratransit. Paratransit includes thing like dial-a-ride and other vans and buses that serve seniors and the disabled. Paratransit is about five times more expensive than mass transit.
Public Health & Health Care
HF1372/SF1323: Safe sharps management. Chapter 286, and initiated by UltiMed, a St. Paul company. Taxpayers, employers, and health care policyholders pay more than a billion dollars a year nationwide to pay for injuries from needle sticks, especially to workers in waste management and the hospitality sector. The legislation requires manufacturers of “sharps” such as syringes, lancets, etc. and the pharmaceutical companies that make injectable medications to post information on safe sharps disposal on their web sites. I ended up brokering this legislation among pharmaceutical companies, sharps manufacturers, waste haulers, and home users of sharps. It was very complicated!
HF2614A108 amendment to HF2614: Pharmaceutical waste reduction, initiated by me. HF2614 was vetoed but this language was adopted in the final budget balancing bill, HF1, 1st 2010 Special Session Chapter 1, Article 19, Section 21, and awaiting signature (search for "prescription drug waste"). Nationwide, it is estimated that we are wasting up to $10 billion a year in taxpayer money on prescription drugs that are paid for but never used in long-term care facilities. This is due to inefficient dispensing and prescription techniques and a lack of appropriate technology. The federal health care reform law includes legislation that will help avoid $5.5 billion of this waste over the next decade. This amendment (as eventually adopted by the conference committee) asks the MN Board of Pharmacy to recommend better techniques and technology to save money in the state’s Medicaid program, prisons, and veterans’ homes.
Elections
HF2510/SF2226: Fair Race bill, initiated by Senator Sandy Rummel, Chapter 291, vetoed by the Governor. The bill clarifies our election statutes so that someone who threatens a candidate for public office to make them drop out of the race is committing coercion. The Governor vetoed the bill, arguing that our coercion statute is sufficient. This is technically correct, but local elections officials asked for statutory clarification. House Information Services had this article on the bill.
Housing/Property Taxes
Homestead tax treatment for manufactured housing cooperative. I didn’t author the bill but worked with stakeholders on a technical piece of legislation that avoided a major property tax hike for some residents of Lexington. The Department of Revenue offered a provision in a technical bill that would have altered the homestead status for residents of manufactured home (aka mobile home) park cooperatives. There are a handful of these co-ops in the state, and one of them is in the City of Lexington. The technical change would have vastly increased the property taxes for these residents. I moved to delete the provision several months ago and then asked the Department of Revenue and affordable housing advocates to come up with a compromise. They did so, and Rep. Marquart and I introduced the legislation as HF3760/SF3348. This was inserted into the Omnibus Tax Bill (HF3729), Chapter 389, Article 1, Section 15, and is awaiting signature.
Environment
HF2402/SF2152: Changes to battery recycling fee. Chapter 258, initiated by Alliance of Automotive Service Providers of Minnesota. Since 1987, when a consumer buys a new auto battery, they need to bring in the old battery. If they don’t bring in the old one, state law says that the consumer has to pay $5. The retailer then passes the $5 to the battery manufacturer. This system has worked well for 23 years; the recycling rate for auto batteries is 97%! Auto service retailers asked me to carry this bill because battery manufacturers now charge $10 or more when the retailer does not provide the old battery. That means Minnesota retailers get shorted $5. So the bill increases the fee charged by retailers to consumers to at least $10.
HF2655/SF2286: Construction and demolition debris recycling requirement for state bonding projects. Inserted in bonding bill (HF2700), Chapter 189, Section 33, and self-initiated. My old recycling colleagues from Wisconsin showed me data that their state administration agency requires that new state building projects valued over $5 million recycle 50% of their construction waste. The result is that these building projects are saving a lot of money! For every 1,000 square feet of construction, projects there have saved an average of $179 in disposal costs. Recycling also sustains more jobs than disposal. I drafted legislation to mirror the requirement in Wisconsin. We have a robust construction waste recycling industry in Minnesota and they are prepared to handle this material.
HF2667/SF2202: Redwood County Materials Recovery Facility (MRF). Inserted in bonding bill (HF2700), Chapter 189, Section 9, Subdivision 3. Line-item vetoed by the Governor. Initiated by Redwood County. Every two years the MN Pollution Control Agency (MPCA) makes capital assistance requests to the legislature to pay for solid waste facilities. They usually get about $3 million. I authored this bill on behalf of Redwood County staff, who I worked with in my recycling career, because it would do what we all say is necessary: consolidate county functions to reduce costs and increase efficiency. The project would replace the dilapidated Redwood County Recycling Center with a facility that could serve several West Central Minnesota counties and increase the value of the recycled materials. The private haulers in that area do not have an interest in constructing a facility of their own.
HF2949/SF2925: Metropolitan Council Sewer Availability Charge modification. Chapter 212, initiated by Metropolitan Council. Because of the slow pace of new construction on the outskirts of the Twin Cities, the Metropolitan Council is running very slow on cash reserves for expanding sewer capacity. When a new building is built, the owner pays a Sewer Availability Charge (SAC) that is set aside for reserves and some of it goes to pay for operations of the metro sewer system. This bill will temporarily allow more of the SAC to go to the reserve fund and less to the general operations. While this may increase the sewer bill for the current users of the metro sewer system by a slight amount, it will keep the financial system of the entire system from collapsing, which will be more expensive for everyone.
HF2698/SF2630: Aquatic vegetation control fees modified for drainage ponds. Inserted in Omnibus Environment & Natural Resources Finance Bill (SF3275), passed as Chapter 361, Article 4, Section 60. Initiated by Sen. Sandy Rummel. Senator Rummel and I heard from Shoreview residents living around Kerry Pond last year about proposed DNR permit fees for controlling aquatic vegetation. We held a public meeting for the neighborhood last fall. The proposed permit fee increase for Kerry Pond residents would have gone up from about $7 per year to something like $90! We recognized that the DNR was trying to recover costs for issuing permits, but to us it appeared that metro area lakes with a high number of residents were bearing the brunt of the cost. This bill would cut the permit fee in half for residents needing a permit on small drainage ponds, which is what Kerry Pond is, as opposed to a lake.
Bills that received a hearing but were not acted upon or did not reach the House floor.
It’s often helpful to introduce legislation to initiate a broader policy discussion, especially if a legislator thinks the bill might not make it through the process or get signed by the Governor. Once a bill gets introduced and gets a number, lobbyists, the media, and other stakeholders suddenly start appearing out of the woodwork and start discussing the issue.
HF170/SF129: Removing the requirement that telephone directory publishers deliver a white pages.Self-initiated. This idea got more play in the media than it deserved, or perhaps there are a lot of reporters who hate getting phone books! After discovering that yellow pages publishers are developing ways for consumers to opt-out of getting a yellow pages, I found that state rules require the delivery of a white pages, whether you want one or not. Verizon surveys have shown that one in seven people use the white pages. The bill, as amended this year in the telecommunications division, would require the Public Utilities Commission (PUC) to expedite rulemaking and delete the requirement but would require the phone company to deliver white pages if you ask for them. Several Democrats didn’t like this idea because they didn’t trust the phone company to get it right. Since I spent a total of about one hour on this bill and it was not worth spending any more time on, I asked that the bill be tabled in the Commerce and Labor Committee.
HF0418/SF1176: Allowing municipalities to require control or eradication of buckthorn. Initiated by a North Oaks resident. This bill actually made it to the House floor this year but didn’t move in the Senate. Buckthorn is a decorative shrub that can block out native trees and plants. Many Minnesotans are working hard to remove the plant but it is an uphill battle. This bill would give authority to a municipality to pass an ordinance requiring the removal of the plant. The legislation was “permissive,” meaning that a city could pass an ordinance if it wanted to but it would not be required. MnDOT raised objections because they might be required to remove buckthorn in their right-of-way in a city that passed an ordinance, and that would keep them from working on roads. The Star Tribune did a nice article on the issue.
HF2407:Creating a product stewardship framework. Self-initiated. This received an informational hearing in the Environment & Natural Resources Policy Committee. There are a lot of bills introduced every year that would require some industry responsibility for covering the cost of safely disposing of certain solid and hazardous wastes, like electronics, paints, etc. This type of product stewardship is designed to remove or reduce taxpayer costs for protecting the environment and public health. These bills take up lot of legislative time and legislators often don’t have the expertise necessary to sift through conflicting testimony. This bill would create a framework through which the MN Pollution Control Agency (MPCA) could recommend products for legislative action and provide necessary technical background. The State of Maine enacted legislation this year that passed on a bi-partisan basis with support from their state chamber of commerce, and I hope to learn from their model in 2011. You can listen to the audio of the informational hearing on the Environment & Natural Resources Policy Committee website for the May 5, 2010 meeting starting at 36:39.
HF2182: Rating criteria required for capital project funding requests. Self-initiated. I requested a hearing in the Capital Investment Committee on this bill that would add more transparency to the bonding bill. The bonding bill is often very political because many projects get included based on who represents the area. Projects often look like “earmarks.” My bill would require the Commissioner of Finance to ask for specific information about jobs and other data when public entities submit funding proposals. Then legislators would be able to compare and rank projects based on merit. The media and the public would also have access to this information so that they can hold legislators accountable. I received a polite hearing but there was resistance to the idea from members of both parties, particularly from rural Minnesota where bonding bills are popular.
HF2512: Discouraging state purchasing of bottled water. Self-initiated. The State of Minnesota spends about half a million dollars annually on bottled water. It usually comes in the form of five-gallon jugs. It turns out that using tap water is hundreds to thousands of times cheaper, even with a good tap filter. As a means of saving a modest amount of taxpayer dollars, I introduced the bill. It would be a bit picky to put this in law, but the related media attention got a lot of people talking in their workplaces about the wisdom of buying bottled water during difficult economic times. The Star Tribune did a nice article on the issue.
HF2559/SF2655: Public water suppliers required to recover costs of providing service. Self-iniated. The goal of this legislation was to push some cities (especially in rural Minnesota) to stop subsidizing water rates. Some cities and towns under political pressure will charge less than it actually costs to provide the service, and then when the water infrastructure is in need of upgrades there is no money in reserve to pay for it. Then the city goes to the state for a bailout through the Public Facilities Authority that provides low interest loans. Only after negotiating a loan will a city be required to raise rates to pay for the bonds. My goal was to keep the city from needing a bailout in the first place. The legislation also required that water rates only be used for the water service and infrastructure so that the money is not used to subsidize other city services. I didn’t have a lot of time to work on this, but I did get an informational hearing in the Cultural & Outdoor Resources Finance Division and we had a good discussion.
HF2429/SF2418: Bonding request for an anaerobic digester. Self-initiated. This was a request for $3 million in state bonds to support the construction of an anaerobic digester for municipal solid waste in the Twin Cities metro area. A digester is something like a slow cooker but about the size of a small house. It heats the organic contents and result in creating small pellets that encapsulate methane, which then can be burned to create energy. I introduced the bill to get a lot of stakeholders to start talking about locating a digester in the metro area that can handle a variety of organic wastes. The St. Paul Port Authority and many other stakeholders are interested in this and so I had quite a few good meetings. I did not intend for the bonding bill to include this item in 2010 but I may come back with it in 2012.
[Note on 4/19/10: Based on some comments from constituents, I have some additional clarifying language that is in italics below.]
Every year I send out an electronic constituent survey. Some members send out a mailing to all or some households with a survey and then someone has to tabulate all the results, which takes a long time, and it usually costs some taxpayer money to send out the survey. I prefer the electronic survey on Survey Monkey because it's cheap and about 90% of the constituents who contact me do so by e-mail, so I send the survey to all people who have e-mailed me since 2007. Survey Monkey also tabulates the data immediately.
This year the survey was sent to 888 people. So far 522 people have responded! To be a statistically valid survey, I would have to survey people at random, so one must take this fact into account when reading the results.
One of the House staffers who proofread the survey said, "It looks from the questions and the answers provided that you are actually interested how people respond?" YES! Many surveys do not actually provide that much useful data. However, I write my own surveys in order to help me with decision-making at the legislature on issues I will likely vote on. So here are the results along with some analysis.
Question 1. "Education Funding: Currently the Legislature plans to eliminate the $1 billion deficit by cutting parts of the state budget in virtually all categories except K-12 education. Cuts have been made or are being deliberated in higher education, the environment, agriculture, services for the disabled & seniors, etc. K-12 education comprises just under 40% of the state budget. Even if there is no cut to K-12 schools, previous state budget decisions are causing school districts to cut teachers, reduce class offerings, reduce related services, and/or ask for increases in property tax levies. What are your thoughts about what the Legislature should do about K-12 education funding?"
Without raising taxes, continue to cut other parts of the budget except K-12 to balance the budget: 23.5%
Without raising taxes, cut K-12 funding so that other parts of the budget are cut less, or just cut K-12 spending to balance the budget: 29.8%
Without raising taxes, increase funding for K-12 education by cutting other parts of the budget more: 6.3%
Raise taxes or other revenue to meet the needs of K-12 education: 37.0%
I don't know/I'm not sure: 3.5%
My take: There was strong support for K-12 education on this question. Just under 30% said we should cut education. Based on some of the written comments, some of these respondents are likely disability advocates who would like to see cuts to education equal to those taken by human services. Forty-two percent believed that the state should increase education funding either by raising taxes or cutting other parts of the budget. Another 23.5% preferred a strategy of holding K-12 education harmless when cutting the budget.
Some constituents have interpreted my comments above to imply that the majority of respondents wanted to raise taxes for education. My interpretation is that education has strong support because the majority of respondents don't want to cut K-12 education when we are cutting everything else.
Question 2. "One option for balancing the budget over the next few years is to limit or eliminate some tax exemptions, credits, or deductions that reduce revenue to the state. Studies show that some of these policies don't accomplish their intended goal (e.g., creating jobs, encouraging home ownership, etc.). Other policies favor one group of people (e.g., the wealthy or low-income) or one group of businesses (e.g., rural vs. all other) over another. Please indicate what your thoughts are about changing some of these tax policies. PLEASE CHECK ALL THAT APPLY."
I would support giving tax breaks just to people who really need it based on their income: 31.4%
I would support ending tax breaks that don't accomplish their stated goal: 52.8%
I would support changing tax policies so that everyone or every taxpayer pays the same percentage of income in taxes: 40.4%
The state needs to give more tax breaks because some or all taxes are too high; cut more spending to balance the budget: 29.6%
I don't know/I'm not sure: 1.4%
My take: The second and third questions have to do with what we call "tax expenditures." Each year, Minnesota does not tax certain people, businesses or items while taxing everyone else, and the lost revenue adds up to $11 billion a year. Some of these policies make a lot of sense--for example, we don't tax food. There is a perennial discussion about the wisdom of expanding the sales tax to clothing and professional services. In addition, some kinds of individual and corporate income have lower tax or less tax in order to provide tax relief, to be competitive with other states, or to promote a certain activity such as business development in depressed rural areas. See a list of them all on-line.
The purpose of the second question is to gauge how people view the fairness or utility of these tax breaks, and I asked respondents to check all items that they agree with. Only one response got more than 50% and that was to get rid of tax breaks that don't accomplish their goal. Less than 30% of respondents fit the most fiscally conservative position, which was to cut taxes and cut spending at the same time. I'm not really sure what I will do with the responses to this question, since the question was pretty complicated and there were quite a few complicated answers to pick from. Tax policy is very complicated and it's hard to boil down to a simple question. It's clear that respondents don't like tax breaks that serve no purpose.
Question 3. "The mortgage interest deduction is one tax break that could be limited at the state level. You can currently deduct all of your mortgage interest even if you have a house worth up to $1 million. People with expensive homes tend to benefit the most from the deduction; 41% of all mortgage interest deductions are claimed by the top 10% of income earners. Wisconsin does not allow mortgage interest deductions on state taxes and yet still has a higher home ownership rate than Minnesota. Please indicate your reaction to the proposal to change the mortgage interest deduction. (Note: this would not affect the more valuable federal mortgage interest deduction.)"
Do not change any policy on deducting mortgage interest: 31.0%
Limit the mortgage interest deduction to mortgages on houses worth $500,000 or less: 27.4%
Limit the mortgage interest deduction to mortgages on houses worth $250,000 or less: 12.3%
Get rid of the mortgage interest deduction and replace it with a tax credit that is the same for all homeowners: 12.9%
Get rid of the mortgage interest deduction altogether: 10.3%
I don't know/I'm not sure: 6.2%
My take: This question is a foll0w-up to the second question. One of the more well-known tax expenditures is the mortgage interest deduction. When you buy a house, you can deduct your mortgage interest from your gross federal and state income so that your taxable income is lower. The cost to the State of Minnesota of this deduction (and therefore a benefit to the taxpayer) is more than $400 million a year. People with higher incomes tend to benefit the most from this deduction because they tend to itemize on their taxes. You can deduct all of your interest for mortgages worth up to $1 million.
Half of all homeowners don't itemize and therefore don't take advantage of the deduction. Last year, the House proposed a bill that would have capped the mortgage interest deduction and then given all homeowners a credit. (Deductions reduce your taxable income but credits are better because they are dollar-for-dollar reductions in your taxes payable.) Most households would have done better under this proposal but it ran into a lot of opposition based on a lot of misinformation from opponents. My goal with this question was to see just how much that taxpayers understand about this deduction and what they would be willing to give up.
From the responses, more than 62% said that the status quo--that you can deduct all your mortgage interest even if you have a million-dollar mortgage--should change. However, the preferred method of changing the policy did not emerge in the responses. I admit that this question was pretty complicated.
Question 4. "The Minnesota Vikings would like a public subsidy to cover part of the cost for a new stadium. Please indicate your thoughts on this idea."
I would not support using any public funding for a Vikings stadium: 46.4%
I would support using a user fee (e.g., limiting any tax to those who use the facility, hotels, parking, etc.) to support funding a Vikings stadium: 27.1%
I would support using a dedicated source of public funding like increased legalized gambling, a county-wide sales tax increase, hospitality tax, etc. for a Vikings stadium: 19.6%
I would support using public funding from any source for a Vikings stadium: 4.5%
I don't know/I'm not sure: 2.4%
Generally speaking I have been against public financing of stadiums. I was not in the legislature when the Twins stadium deal was approved so I missed that debate. When I go door-to-door the vast majority of local residents tell me that they they don't like public financing either. But since there's talk of a Vikings proposal, I thought it prudent to "check in" with constituents on the issue. Almost half of respondents said no to public financing and another quarter would only support a user-fee financing system, or a total of 73.5%. So it's pretty clear that constituents don't want to be on the hook for a stadium.
I got a lot of constituent e-mail about my interpretation on this question. As a result, I should state more clearly that a majority of constituents responding the survey don't want to have a broad-based tax to pay for a Vikings stadium. It's a bit of a stretch to say that the majority of respondents support public funding because that support is very conditional, but one could read the results to say a "user-fee" arrangement would have majority support among respondents.
Question 5. "The legislature is being asked to consider alternative teacher licensure for K-12 education. Advocates, including the Minnesota Chamber of Commerce and Teach for America, are concerned about the achievement gap between white students and students of color. They believe that the teacher licensing process needs to be easier in order to attract candidates to teach in underachieving schools. The proposed changes would include giving someone a temporary two-year license after they complete a bachelor's degree and 200 hours of training but that is not in a classroom. What are your thoughts about this proposal? Free free to add comments."
I strongly support the idea of an alternative teacher license: 16.2%
I would probably support the idea of an alternative teacher license: 27.5%
I would probably not support the idea of an alternative teacher license: 14.8%
I strongly do not support the idea of an alternative teacher license: 30.0%
I don't know/I'm not sure: 11.5%
My take: I got more "I don't know" responses on this than any other question, where 43.7% said they support or probably would support alternative licensing and 44.8% said that they did not.Education Minnesota (the statewide teacher's union) has been strongly against this idea and I have a lot of teachers who live in the district and who got this survey, which might explain the strong opposition to this idea at 30.0%. But I've met with some very thoughtful--and yes, some liberal--people who support alternative licensure in order to recruit more teachers of color and Teach for America volunteers who can help address the achievement gap. The Minnesota Chamber of Commerce is an advocate as well, and their position is on-line. The Obama Administration's rejection of Minnesota's Race to the Top application in part over alternative licensing is pushing stakeholders to get together on this issue, and I welcome the debate.
Question 6. "Federal health care reform: Future state budgets and the health of Minnesotans will be impacted by the federal health care reform legislation passed by Congress in Washington, D.C. Under the legislation, it is predicted that hundreds of thousands of Minnesotans would receive health coverage; Medicare would be come more solvent; patients would not be denied coverage based on a pre-existing condition; and the federal deficit would shrink over time due to greater efficiencies. The legislation comes with new taxes, mandates, and participation by the federal government that are controversial. Since this legislation will have an impact on Minnesota, I would like to know how you feel about this legislation."
I support the legislation, but I don't think it went far enough: 21.6%
I strongly support the recently enacted federal health care reform: 12.2%
I support the legislation but I have some concerns about parts of it: 12.0%
I don't support the legislation, although there are some good parts to it: 16.0%
I strongly do not support the legislation: 35.5%
I don't know/I'm not sure: 2.7%
My take: While I'm not in Congress, I thought I would just see what people think about federal health care reform. There was strong opposition, with 51.5% of respondents not supporting the legislation and 45.8% supporting it. Those supporting single-payer or at least a strong public option likely picked the first answer about the legislation not going far enough. The level of support is actually higher than national polls and the percentage of people saying "I don't know" was lower than national polls. Many constituents asked me why I didn't leave a comment option for this question. It wasn't on purpose--I forgot to click the right box!
The House and Senate are off for a week starting Monday, March 29th for the Easter/Passover Break. We will have a lengthy floor session on Monday and then we come back Tuesday, April 6th. Usually the legislature is accused of working at a snail's pace. While that is often true and is a function of 201 people all with different views trying to achieve consensus, the House and Senate hit the ground running in February. After seven weeks, we have completed the following tasks (or will complete them as of Monday afternoon).
* Fixed General Assistance Medical Care. This week we passed a fix to the General Assistance Medical Care (GAMC) program. GAMC is a health care program that covers about 33,000 Minnesotans at any given time (about 80,000+ a year) who have assets of less than $7,800 a year. About 70% of them have a mental health or chemical dependency problem, and about 30% of them are homeless. The Governor unalloted the program for the period April 1 to June 30 2010 and line-item vetoed the program for July 1 2010 to June 30 2011, so a bi-partisan team of legislators put together a series of proposals to serve this population until the Governor agreed to something he could sign. The fix cuts the program significantly but we hope to have a better long-term solution in the future.
* Cut the budget by $313 million and set budget targets for the remaining deficit. The state has a projected deficit of $1 billion for the two-year budget ending June 30, 2011. Both the House and Senate passed separate bills to cut $313 million from all parts of the state budget except health & human services and K-12 education. This bill is now in conference committee and we are likely to vote on a final version to send to the Governor on Monday.
About $105 of this cut would be in aid to cities and counties. Shoreview, Blaine, Lino Lakes, and North Oaks would not see much change from the state from their present situation since they don't receive local government aid (LGA) and they would lose any market value homestead credit funding (MVHC) but they already lost it for this budget year because of previous cuts. Circle Pines and Lexington receive LGA and MVHC and they would lose a substantial portion. In the House Tax Committee (I'm a member) we did our best to make sure that these cuts do not translate into property tax increases in 2010. That may not be the case in the future.
In addition, both bodies adopted "targets" that show how much more we must reduce the budget in health & human services and K-12 education. Right now the only cut to K-12 would be about $1 million from the MN Department of Education. We also plan to have a net change to health & human services of $710 million. We have not acted on this part of the budget yet because there is still a lot of number-crunching that has to happen to figure out how Congressional action will affect our state Medicaid program. Usually the feds pay half and the state pays half for Medicaid. Right now we believe that the federal government will be sending $408 million our way to support Medicaid programs that serve the disabled and seniors. This is all before any calculations from the newly-passed federal health care form bill are factored in. In addition, the GAMC bill will save $147 million from the health & human services budget. So $147 million + $408 million = $554 million. That leaves $710 million - $554 million = $155 million left to cut after the break.
* Passed a bonding bill (aka Jobs Bill 1). Every two years the legislature produces a capital investment bill for "bricks and mortar" projects in the state. You can see more detail at the last blog entry below. It is expected that this bill will lead to about 15,000+ construction, design, and engineering jobs over the next few years.
* Passed tax credit bill for angel investors (aka Jobs Bill 2). The House Tax Committee that I'm on passed a bill that would create an angel investor tax credit and a historic rehabilitation tax credit to spur job growth. The angel investor credit would give a tax break to venture capitalists seeking to invest in MN companies. Right now we have been losing start-up businesses to Wisconsin because they have a credit and we do not. In addition, the historic rehabilitation credit would make it easier to start projects to renovate historic buildings. These buildings require a lot of specialized labor and craftsmanship. In addition, the bill includes a CarZ program (suggested by the Governor) that would promote re-use by technology businesses at the Ford assembly plant in St. Paul once it is vacated (with no state fiscal impact). The bill also has an extension of tax increment financing (TIF) programs for about a dozen cities that are trying to attract development at a few specific sites (with no state fiscal impact). Finally, the bill includes some flexibility for some existing tax incentives to expand the Mall of America. The mall plan does NOT include state subsidies but allows the City of Bloomington to increase the sales tax at the Mall of America and adjoining facilities ONLY. That was in place already but now we are giving the mall some other options for how to arrange the financing using those tools.
This bill has not passed the House yet but it is likely to on Monday after the House and Senate leadership agree on the final version. It would not go to conference committee so the Governor would get the bill next week. There are areas of disagreement between the House and Senate for how to backfill the loss of revenue resulting from the two tax credits but I think readers will fall asleep if I mention them in any detail!
* My bills: Quite a few of my bills have finishing going through committees and either reside on the House floor or have passed. The bonding bill included a section that I authored that requires recycling of construction waste from state building projects valued greater than $5 million. In Wisconsin, a similar measure saved more than $150 per thousand square feet. HF1217 dealing with disposal of pharmaceutical waste passed the House floor on Thursday, as did HF2949 that will help maintain the Met Council's financial reserve fund for wastewater treatment. More updates on these and other bills will come later in the session.
The legislature just passed and sent to the Governor a new version of the capital investment bill, or "bonding bill." Like our first bonding bill (see last entry), it is just under $1 billion while the Governor's original request was $725 million. The Governor made line-item vetoes this week to reduce the bill to $680 million.
The difference between this bill and the first is that we have included funding for a proposed Moose Lake treatment facility for sex offenders and we took out a bunch of projects in order to include it.
Sex Offenders
The debate over the bonding bill centered heavily on the Moose Lake facility, and that has caused many people to ask not only about the merits of the $89 million proposal but about the Minnesota Sex Offender Program (MSOP) in general.
When a sex offender is sentenced for his crime, he serves the sentence in a Minnesota Correctional Facility (MCF), which is a prison administered by the Department of Corrections. About 15 years ago, policy makers decided that the state should not be releasing certain sex offenders back into society after the offenders completed their sentences. That led to the creation of the MSOP, which is run by the Minnesota Department of Human Services (DHS). MSOP facilities are not prisons, but rather treatment facilities. The Moose Lake facility would therefore be a treatment facility and not a prison. In order to be placed at a MSOP treatment facility, a sex offender must receive a "civil commitment" from a judge. After the Dru Sjodin murder several years ago, the number of civil commitments has skyrocketed. There are more than 500 people in the program currently.
Some analysts believe that the constitutional basis for the MN Sex Offender Program (MSOP) is on thin ice because there hasn't been an offender released from the program since its inception. The result has been an exploding growth in the MSOP population, leading to the request for the Moose Lake facility. There is a concern that someone could bring a lawsuit against the state challenging the constitutionality of the program because offenders aren't being successfully treated, and if the decision went against the state, the MSOP patients would be released. Politics in Minnesota carried a good article about the issue.
The Governor proposed legislation, which we are considering seriously in the Legislature, to double the criminal sentences of sex offenders. It would cost $12 million a year but keeping someone in prison is considerably cheaper than in a sex offender facility.
Objective Criteria on the Bonding Bill
One of the problems I've always had about the bonding bill is that is often one of the most political documents considered by the Legislature. Every even-numbered year the Governor's office makes recommendations for capital investment (and a smaller "emergency" bonding bill every other year) based on suggestions by state agencies as well as other public entities like cities, counties, colleges, universities, etc. Some projects get recommended or don't get recommended based on more subjective than objective criteria. For example, the current Legislature approves fewer projects in GOP districts, and the Governor vetoes more projects in DFL districts. There should be a better way.
My bill, HF2182, would require that the Department of Finance (now called MN Management & Budget) give the Legislature some more detailed information about projects like jobs created, wages paid, how a building project will bring a building up to code, etc. so that we can better compare projects. The public and the media would then be able to bring some pressure to bear on the Governor and the Legislature to select projects based on merit.
I got a bill hearing in the Capital Investment Committee last week and presented the idea along with two Republicans who had similar bills. The reaction was not so positive from both the executive branch and at least one DFLer on the committee. See an article that sums up the bill here. I'll keep trying!
How Much Debt Does the State Ring Up?
A few constituents have asked how much debt the state incurs on the bonding bill. My previous entry has a lot of info about our relative debt levels, but I came across this info from MN Management & Budget here. You can see that the percentage of our budget that goes toward debt services is considerably low and consistent using a variety of measures.
Mid-February will see passage by the Minnesota House of the capital investment or "bonding" bill. I'm already getting a lot of e-mail (generated--I think--by a GOP or conservative group action alert) about the bill, so I thought it would be a good time to review what the bonding bill is.
Every two years the Legislature and Governor work on this bill to provide funding for publicly owned buildings, property, and land. In particular, state agencies have buildings or property that are in need of repair, renovation, or replacement. Our state colleges and universities tend to have a large request because they have a lot of buildings. To be "bondable" the project has to be publicly owned, be of state or regional significance, and be a capital project--meaning it has to be "bricks and mortar" and not for ongoing operation costs. The state raises money for these projects by selling general obligation bonds on the bond market. The state then pays the debt service to pay off the bonds over time.
Many people have written me assuming that when the Legislature passes a bonding bill that the amount of the bill is actually added dollar-for-dollar to the budget. For example, the Senate just passed a $1 billion bill and someone said that they added $1 billion to the deficit. That's not the case. In our current budget, we will now just pay the debt service on the $1 billion, which is in the tens of millions or so.
The state agency Minnesota Management and Budget (MMB) starts the process by asking public entities to submit requests. Usually the requests are something like five times greater than funding available, so MMB winnows them down and eventually the Governor's office submits a proposal to the Legislature with projects he wants. This year the Governor submitted $685 million worth of projects and those projects were mostly for state agencies and higher education institutions. The House and Senate are likely to approve a bill in the $1 billion range. According to staff, this difference of $315 million would increase our debt service for FY2010 by zero and by just $2.5 million in FY2011.
The bonding bill is often touted as a jobs bill. It is true that the private sector creates most jobs, but in bad economic times when the private sector is not hiring, government can spur job growth by spending on public projects that are generally needed anyway. (This is a basic tenet of Keynesian economics.) Right now, construction costs have declined considerably so many of us believe that if we have a larger bonding bill this year it does two things: we get more projects done for less money and we can spur additional job growth albeit temporarily. A general rule of thumb is that for every $100,000 in bonding projects, you get one job. (Someone gets paid for doing the work, but there are also costs to fuel, supplies, construction materials, etc.)
So if we pass a $1 billion bonding bill instead of the Governor's proposed $685 million (a difference of $315 million), we could see the creation of 3,150 additional jobs for just an additional $2.5 million during the next fiscal year. At least in the short term, that's $793 per job when we need to put people to work. WOW.
How do we figure out what an acceptable debt level is? Well, there is no law that limits our debt level, but several decades ago, Governor Perpich used three percent of the general fund budget as a guideline and the state has pretty much stuck to that level.
Moody's (an agency that sets bond ratings) said this about our debt management: "Minnesota's debt levels have historically been a neutral-to-positive part of the state's credit profile. The state's debt issuance is highly centralized and controlled, with the bulk of bonds issued carrying the full faith and credit pledge of the state. Minnesota's metrics have tended to place the state about average or slightly better among the states for debt issuance. Moody's 2009 State Debt Medians Report shows that Minnesota ranks 25th in debt per capita and 32nd in debt as a percent of personal income, largely a result of the state's increasing personal income levels."
It is the first day of session today and an AP reporter asked me about a bill I have (HF2512) about bottled water. We talked a little bit and I thought it would be mentioned as a short blurb on the back page of something, since we have a jobs bill, a bonding bill, General Assistance Medical Care (GAMC), etc. By 4:00 p.m. I started getting interesting e-mail about the bill because the AP put it on the wire and the Star Tribune website had a link on the front page. So to anyone interested for the rationale for the bill, here's some more info...
The text of the bill isn't exactly as clear as it could be, but here's the gist of it:
When state agencies buy bottled water in five-gallon jugs (something seen in many offices) it costs taxpayers about 80 cents to $1.00 per gallon. In contrast, tap water in Shoreview is about 80 cents per ten thousand gallons. An intern of mine last year calculated that even with a high-end tap filter to get out any sediment, hardness, etc. in the water, the bottled water still costs about five to ten times more. And one of the two vendors of bottled water to the state uses tap water anyway.
The bill says that state employees should be discouraged from drinking bottled water, but the intent is that our state agencies should move from bottled water to tap water or filtered tap water because it's cheaper. (If you want to bring or buy your own, go right ahead.)
This isn't something that ought to be in state statute, but I was trying to get people's attention that is this something that could save some money. Not a lot, but when we are going to be laying off state workers and all sorts of other public employees, it is something we should look at.
There are also some compelling environmental reasons for sticking to tap water, since it takes a lot of energy to transport bottled water everywhere, but that was not the impetus for the bill.
From 2007 to 2010, I represented District 53A, which includes parts of Shoreview, North Oaks, Lino Lakes, Blaine, and all of Lexington and Circle Pines, in the Minnesota State Legislature.
I plan to make a few posts about our community and the legislature in 2011.
