Jobs, economic development top supplemental spending

While the House and Senate put forward very different visions around how to use the projected $900 million surplus this session, legislators put together a supplemental budget bill (House File 2749) in the last days of the legislative session that had a net general fund impact of $182 million for FY 2017, providing the largest funding boost in economic development. The total impact of the bill increases to $233 million in FY 2018-19. This budget bill includes $26 million in FY 2017 and $67 million in FY 2018-19 in tax cuts in its state government provisions. The Legislature also passed a tax bill totaling $257 million in FY 2017 and $544 million in FY 2018-19.

FY 2016-17 Supplemental Budget General Fund Proposals (Net General Fund Changes)
Governor House Senate Conference Agreement
Jobs and Energy $129 million $12 million $189 million $75 million
State Government $51 million -$10 million $36 million $45 million*
E-12 Education $61 million $0 $59 million $25 million
Public Safety $65 million -$793,000 $43 million $25 million
Environment and Agriculture $11 million $2 million $27 million $7 million
Higher Education $76 million $0 $48 million $5 million
Health and Human Services $86 million $0 $51 million $0
Transportation $15 million $260,000 $1.8 million $0
Tax Cuts and Aids to Local Governments (House File 848) $140 million $999 million $283 million $257 million
Total $635 million $1 billion $738 million $440 million
*This total includes the tax cut provisions in the supplemental budget bill.

In the budget bill, policymakers put the most additional resources towards jobs and economic development, where they allocated $75 million in FY 2017. Providing access to broadband for Greater Minnesota was a priority expressed by the House, Senate and governor, and about half of the funding in this area ($35 million) is for that purpose. Only $5 million can go to underserved areas, defined as areas where households and businesses have internet speeds slower than the state’s 2026 goals. Policymakers also set aside up to $500,000 for areas with significant low-income populations. The final funding for broadband is much closer to the proposed House figure of $15 million than the governor’s and Senate’s proposals of $100 million and $85 million, respectively.

The final equity agreement includes important provisions that work to move the needle on the state’s economic disparities. Policymakers dedicated $35 million in FY 2017 and $35 in FY 2018-19 for equity initiatives such as:

  • $6.9 million in grants for the Latino, Somali, Southeast Asian, and American Indian communities to address educational, employment, and workforce disparities, and to support youth; and
  • $1.5 million to promote high-wage, high-demand nontraditional jobs for women.

Policymakers invested $25 million of the surplus in E-12 education. The House and Senate agreed to fund one of the governor’s highest priorities, voluntary pre-kindergarten, with $19 million in FY 2017. The education provisions also include funding to support development of teachers and proper placement of support staff to help improve students’ learning environments, as well as for early education and equity aid funding changes. Much of these funding increases are made possible through savings resulting from a loan refinancing option for some school districts.

Policymakers invested $5 million in higher education, with $2 million for the state grant program, which lowers the cost of college for low- and moderate-income students, and $500,000 for colleges and universities to narrow gaps in college education attainment between students of color and white students.

While the House and Senate found agreement in many areas of the budget, the transportation and bonding discussions proved to be less productive. For the second year in a row, policymakers failed to pass a substantial transportation bill due to disagreements on which transportation investments the state should make and how they should be funded. Last year, policymakers passed a transportation budget that maintained the status quo, but there was no funding allocated this year. Legislative sessions in even numbered calendar years like this one are also typically “bonding years,” where policymakers pass a capital budget bill that invests in our state’s infrastructure, such as roads and buildings. Policymakers this year were unable to pass a bonding bill during the legislative session.

There is discussion that policymakers will return to the Capitol this summer to pass bonding and transportation budgets.

We discuss more of the health and human services and tax details elsewhere on our blog. In health and human services, legislators agreed to some important investments in mental health and Medical Assistance. They also missed critical opportunities to improve MinnesotaCare, expand access to affordable child care, and support struggling families through the Minnesota Family Investment Program. The tax bill includes several provisions that make working families its priority, including nation-leading improvements to the Working Family Credit, and expansions of the Child and Dependent Care Credit.

The House and Senate passed the supplemental budget bill Sunday night.  It now is in the governor’s hands where he has the power to sign, veto, or line-item veto this supplemental budget.

-Clark Biegler

Posted in Budget Proposals | Tagged , , | Leave a comment

Net-zero HHS agreement invests in some vulnerable Minnesotans; misses opportunity to help many more

Sunday morning, the Supplemental Budget Conference Committee approved House File 2749, which spells out the near future of Minnesota’s Health and Human Services (HHS) budget.

The bill provides important resources that will protect vulnerable young Minnesotans and provide for the treatment of Minnesotans with mental illnesses. However, the agreement missed an important opportunity to invest our state surplus in supports for Minnesotans who are struggling to make ends meet. It doesn’t include provisions to increase economic stability for our most financially vulnerable neighbors or expand access to affordable child and health care. On the other hand, the bill also left out harmful proposals that would have made affordable health care more difficult to come by for Minnesotans with lower incomes.

The supplemental bill increases overall HHS spending by $79 million in FY 2016-17 and $154 million in FY 2018-19. The increased funding doesn’t come from the state’s general fund surplus. Instead, it is made possible by a $74 million transfer from the Health Care Access Fund, which updates an existing transfer for payments intended to cover services provided by health insurers and providers; the transfer amount was frozen in 2005.

The supplemental budget bill includes many of the limited areas of agreement between the House and Senate’s HHS budget bills, and also contains some of Governor Mark Dayton’s priorities. The bill includes:

  • $63 million in FY 2016-17 and $71 million in FY 2018-19 dedicated to the hospitals and other facilities that provide care, treatment and support for Minnesotans with mental illnesses and sex offenders;
  • $4.8 million in FY 2017 and $28 million in FY 2018-19 to allow a spouse to preserve their family’s assets when their partner needs home- or community-based services provided through Medical Assistance;
  • $2.8 million in FY 2017 and $3.8 million in FY 2018-19 to tribal governments to support their efforts to provide culturally-responsive human services;
  • $2.5 million in FY 2016 and $4.8 million in FY 2018-19 to prevent liens from being placed on older Minnesotans’ estates when they enroll in Medical Assistance;
  • $20 million in FY 2018-19 for a 15 percent increase in payment rates to foster parents;
  • $188,000 in FY 2017 and $8.4 million in FY 2018-19 to be invested in certified community behavioral health clinics, a proposal that may be matched with an additional $15 million in federal dollars; and
  • $8.8 million in FY 2018-19 to support vulnerable youth through the Homeless Youth Act, school-linked mental health services and Safe Harbor for Sexually Exploited Youth.

The bill did not include any of the proposals to seek approval from the federal government to change the way Minnesota manages our state’s options for affordable public health insurance. Negative proposals left out would have:

  • Re-instituted asset testing for MinnesotaCare, placing an unnecessary, inefficient bureaucratic wall between more than 100,000 Minnesotans and affordable health insurance.
  • Provided working Minnesotans eligible for MinnesotaCare with options for health plans that come with higher premiums and cost-sharing than MinnesotaCare.

Constructive waiver proposals would have:

  • Re-established eligibility for Minnesotans earning 200 to 275 percent of the federal poverty guidelines, or $24,000 to $33,000 for a single adult. Minnesotans in this income range are nearly three times more likely to lack health insurance as Minnesotans with higher earnings. The cost of providing MinnesotaCare to these Minnesotans would likely be covered considerably or entirely by federal funding.
  • Allowed access to MinnesotaCare for people earning more than 275 percent of federal poverty guidelines.
  • Simplified health insurance enrollment processes for families with children eligible for Medical Assistance.

It is disappointing that proposals that would have helped more Minnesota families reach economic security failed to make the final cut. The list of new investments skipped the Child Care Assistance Program (CCAP), leaving 7,300 families on the waiting list and failing to expand the shrinking set of child care provider options for families who use CCAP by updating rates paid to providers. It also does not contain Dayton’s plan to update cash assistance offered by the Minnesota Family Investment Program, a crucial but cruelly out-of-date support for Minnesota families who fall on hard times.

The bill received final approval on the floor of the House and Senate on Sunday; it now awaits the governor’s signature before becoming law.

-Ben Horowitz

Posted in Budget Proposals, Human Services | Tagged , | Leave a comment

2016 tax bill provisions focus on working Minnesotans

This legislative session, we’ve made the case that policymakers should take the opportunity to invest in broader prosperity, including by supporting the work efforts of those Minnesotans who struggle to make ends meet and get ahead.

The tax bill passed by the Minnesota Legislature this weekend includes provisions that make everyday Minnesotans the priority, especially by strengthening the Working Family Tax Credit and Child and Dependent Care Credit. And importantly, it does not include large and poorly targeted proposed tax cuts that would have reversed the state’s recent progress toward a more equitable tax system and threaten the state’s ability to fund schools, health care and other critical services.

The bill, House File 848 authored by Senator Rod Skoe and Representative Greg Davids, includes a strong expansion of the Working Family Credit. Based on Senate File 2586 authored by Senator Ann Rest, the provision would provide $49 million in tax reductions to about 386,000 Minnesota families and individuals across the state by:

  • Increasing the size of the tax credit for most currently eligible families and individuals;
  • Making some additional families and individuals eligible by increasing the incomes that they can earn and still qualify for the credit; and
  • Reaching younger workers without dependent children by lowering the age requirement to qualify for the credit from 25 years old to 21.

The Working Family Credit provisions for workers without dependent children are truly nation-leading, and would support younger workers and others to be successful as they start their working lives. Minnesota is among the first states (after Washington, D.C.) to move forward with improving such credits for these working people, building on bipartisan (but stalled) efforts to make similar improvements at the federal level.

In addition to supporting work, the benefits of the Working Family Credit are myriad: it helps kids succeed, can narrow racial income disparities, and is focused on those income groups who on average pay the largest share of their incomes in Minnesota taxes. That’s why the Minnesota Budget Project led the effort, with critical involvement from diverse partners, to expand the Working Family Credit this year.

The tax bill also supports Minnesota’s working parents through a targeted expansion of the state’s Child and Dependent Care Credit. Governor Mark Dayton has long championed updating this credit as part of the solution to making child care affordable for more Minnesota families, and a version of it was included in the House’s 2015 omnibus tax bill, based on a bill from Representative Jenifer Loon. A $9.8 million expansion is included in the 2016 tax bill, which would:

  • Increase the maximum amount of credit that families can receive to $1,050 for families with one child and $2,100 for families with two or more children.
  • Increase the income that families can earn and still qualify for the credit to $44,900 for families with one child and $51,800 for families with two or more children.

The bill also includes additional funding for free tax preparation and related financial capability services, which means more Minnesotans will get the tax credits for which they qualify and can use their tax refunds to build savings and a stronger economic future.

What’s also important about the bill is what is not in it. One of the primary concerns we had with the House’s 2015 tax bill was its overall size. It included $1 billion in tax cuts and diversions of existing revenues in the current budget cycle, which used up all of the surplus and more, leaving nothing left to invest to expand opportunity in Minnesota. And it contained tax cuts that grew substantially over time, threatening to put the state back into deficits.

In contrast, the 2016 omnibus tax bill is $257 million for the remainder of FY 2016-17 and $544 million in the next two-year budget cycle (FY 2018-19). Those figures include both tax cuts and additional appropriations, including increased funding to cities, counties and other local governments and for economic development initiatives.

The 2016 tax bill also leaves out the largest and most poorly targeted proposals that were on the table. It does not cut the estate tax, which would benefit only a small number of the largest estates. It leaves out expensive proposals to exempt all Social Security income, which would have had no benefit for the state’s most struggling seniors and had a high price tag that would put the services that seniors rely on at risk.

We also raised concerns about the House’s proposal to eliminate the statewide property tax paid by businesses and cabins, which would ultimately cost about $1 billion a year when fully in effect and provide the largest tax cuts to the state’s highest valued properties. And we heard directly from small-business owners who said these kinds of tax cuts were not their priority.

The 2016 tax bill includes a significantly scaled back and more targeted proposal, which exempts all commercial-industrial properties from paying the tax on the first $100,000 of the property’s value. This proposal is $31 million for a partial year tax cut in FY 2017 and about $58 million per year starting in FY 2018.

This tax bill certainly isn’t perfect. But its expansions of the Working Family Credit and Child and Dependent Care Credit focus on Minnesota families and workers striving to get ahead, and represent an important commitment to expanding economic opportunity.

-Nan Madden

Posted in Taxes | Tagged , , , | Leave a comment

Updating child care assistance reimbursement rates important for parents

Minnesota’s Child Care Assistance Program (CCAP) reimburses child care providers so that parents with low wages can leave for work knowing that their children will be cared for in a stable, nurturing environment. But CCAP reimbursement rates are set far below market value, creating another barrier for hard-working parents.

Through CCAP, which includes Basic Sliding Fee, Minnesota’s counties pay child care providers who serve children while their parents are at work or looking for a job. A family of four is eligible for Basic Sliding Fee if they earn $43,000 or less; unfortunately, the resource currently has a waiting list that is 7,300 families long.

Even when parents are able to benefit from Basic Sliding Fee, they are confronted by another problem. The state sets the maximum rate counties can pay child care providers who serve families through CCAP. For years, those rates have been set well below what a typical provider charges for their services. Currently, the reimbursement rates cover less than a third of the options available to parents. Parents may not be able to find a provider willing to accept their child for such low rates.

The Senate and Governor Mark Dayton have taken steps towards addressing the provider rate problem by proposing increases to CCAP payments. In addition to shrinking the Basic Sliding Fee waiting list, policymakers should make sure that CCAP rates give this important work its due.

-Ben Horowitz

Posted in Child Care | Tagged , , , , | Leave a comment

House version of Real ID costly, contains unnecessary language

This session, Minnesota policymakers are considering bills to bring our state’s driver’s licenses up to required federal Real ID standards. Real ID compliant licenses are already required to gain access to federal facilities and nuclear power plants. Soon they will be needed to board planes, which has policymakers anxious this session to make progress toward compliance. Bills are now under consideration in conference committee, but the House bill (House File 3959) includes both unnecessary provisions and unnecessary costs.

Under the House bill, the state would need to offer Real ID compliant driver’s licenses by this fall, a very tight implementation timeline that dramatically increases the cost. The Department of Public Safety has testified to major problems with this approach:

  • The high cost could be easily avoided. The department is already scheduled to overhaul their computer system next year. If the state implements Real ID in conjunction with the system changeover, the Department of Public Safety would be able to absorb the costs. But implementing Real ID on a short deadline using the state’s current system will mean an additional $7.5 million in programming, training, and card costs in FY 2017 and will likely delay the system overhaul, since resources will instead be devoted to Real ID.
  • Such an early implementation of Real ID would have required the Department of Public Safety to start working with their vendor for the computer system by May 15, a deadline that has already passed.

The House bill also includes unnecessary language that requires applicants to demonstrate lawful status to obtain a non-Real ID compliant license (the license most Minnesotans use today). Unauthorized immigrants are already unable to receive driver’s licenses in Minnesota. And while policymakers should take a good look at expanding access to driver’s licenses regardless of immigration status because it would strengthen the economy and expand opportunity for about 78,000 Minnesotans, they should leave immigration policies out of the Real ID debate.

Policymakers in the House would be wise to look to the Senate version (Senate File 3589), which implements Real ID in line with federal requirements and in sync with the new computer system, requiring no additional cost, and leaves out duplicative restrictions against unauthorized immigrants receiving driver’s licenses.

-Clark Biegler

Posted in Immigration | Tagged , | Leave a comment

Local interference restricts local governments’ ability to meet needs of their residents

Recently, “local interference” laws, which prevent local governments from setting higher standards than state law, have popped up in a number of states. These have ranged from a law in Alabama that bars a higher minimum wage than the state’s, to a very harmful law in North Carolina that bans local governments from implementing protections for discrimination because of “race, religion, color, national origin, or biological sex” that differ from state law.

Essentially, local interference policies undermine the ability of local governments, like cities or counties, to meet the needs of their constituents, and they take away this authority from the very leaders who are most familiar with their communities.

While the state plays an important role in setting baseline standards, cities have historically had the power to enact higher standards in the best interest of their residents. Just as states can go beyond federal minimum standards, cities and counties at times do the same for their communities.

Take the minimum wage for example. The federal minimum wage is $7.25 an hour, but in 2014, Minnesota policymakers agreed that the wage floor in our state should be higher and that workers at large employers should earn at least $9.00 an hour (set to increase to $9.50 later this summer). Similarly, some local governments have set higher minimum wages to account for the higher cost of living in their areas. This has been done in cities, including Chicago, Louisville, Ky., and Seattle, which have raised wages so that workers in their cities can better make ends meet.

Local governments also choose to improve the health and general welfare of their residents. This has included expanding access to earned sick leave as Pittsburgh, San Francisco, and Spokane, Wash., have done and Minneapolis is considering doing. These cities have taken important steps to ensure that their residents are better able to come into work healthy and not lose wages when they need to take time off of work to care for themselves. This not only helps workers, but also benefits local businesses which experience lower turnover and training costs.

Last session, the threat of local interference came to Minnesota in a House provision that would have prohibited local governments from passing higher minimum wages, leave policies, scheduling policies, or any required employer benefit higher than the state’s minimum standards. Local interference was rightly not included in the final economic development budget legislation that passed last year, and it should not be included in negotiations this year.

-Clark Biegler

Posted in Economy | Tagged | 1 Comment

Duluth business owners call for strengthening workforce with education investments

This is another story in a series that shares why small business owners believe it’s important to reinvest our budget surplus back into our state to build a broader, more durable prosperity for all Minnesotans.

In 1997, Patty McNulty joined Duke Skorich as a partner in his company, Zenith Research Group, Inc. Today, the Duluth market research firm serves businesses in a variety of industries and cities across the country. They have employed close to 100 people over the past 19 years.Photo of business owners Patty and Duke

Patty and Duke believe that continued investment in communities and neighborhoods throughout the state is essential to the strength of the Minnesota business climate. Minnesota’s economy cannot be sustained if economic opportunity is available only in the Twin Cities metro area.

“Small business is critical to the foundation of Minnesota’s economy,” Duke said. “Very often it is small businesses that allow cities, towns and villages to survive and prosper, while ensuring jobs for the people who live in those communities.”

For Patty and Duke, one of the greatest advantages of owning a small business in Minnesota has been the quality of education. “From our local school districts to our colleges and university system, Minnesota values education,” Patty said. “Job applicants, even those without higher education, have solid reading skills, good communication ability and a broad background in a variety of subjects.”

And Duke points out that Minnesota’s high-quality workforce is recognized by people and businesses in other states. “Educational investment is essential to building a strong economic future in the state,” he said. “The backbone of a strong business community are the workers, and Minnesota has always produced an educated workforce willing to be trained and equipped to produce.”

Like many small business owners across the state, they are worried that some of the current proposals to use the state’s budget surplus for large, poorly targeted tax cuts would primarily benefit large businesses and would do little for small businesses. In addition, large tax cuts crowd out the continued and strategic investments that benefit small businesses and allow towns and cities throughout Minnesota to thrive.

As Patty puts it, “Without the hundreds of small business owners and employees, Minnesota could easily lose what makes it the very distinctive place we love to call home.”

Join with Patty and Duke and other like-minded small business owners to ensure the Legislature enacts budget policies that build a broader, durable prosperity in Minnesota. Sign the petition today.

Then join in a discussion on why state investments matter to you via Facebook or Twitter using the hashtag, #MNProsperity.

Posted in Budget Proposals, Taxes | Tagged , | Leave a comment

Provisions in Senate tax bill make everyday Minnesotans the priority

The Minnesota Senate’s 2016 supplemental tax bill released this week includes provisions that would make strong strides toward more Minnesotans being able to reach economic security. Today’s blog looks at two of our priorities for the session that are included in this bill: expanding the Working Family Credit and the Tax Time Savings bill.

The Senate 2016 tax bill includes the provisions from Senate File 2586, authored by Senator Ann Rest, to expand the Working Family Tax Credit. Tax policy is often perceived as being primarily for the benefit of special interests, but this proposal, in contrast, makes everyday Minnesotans the priority. It provides targeted tax reductions to families and individuals working their way toward financial stability by:

  • Increasing the size of the credit for most currently eligible households;
  • Making some additional families and individuals eligible by increasing the incomes that they can earn and still qualify for the credit; and
  • Reaching younger workers without dependent children by lowering the age requirement to qualify for the credit from 25 years old to 21.

In all, about 386,000 Minnesota households would benefit from the Working Family Credit expansion, receiving a total of $49 million in tax reductions in FY 2017.

The families and individuals who currently receive the Working Family Credit are split almost equally between Greater Minnesota and the 7-county metro area. In some counties, primarily in Greater Minnesota, 16 percent or more of all households who file income taxes receive the credit. The credit is only available to households with earnings from work, and it offsets a portion of the significant state and local taxes that modest-income Minnesotans pay.

Map of Minnesota: Percent of Households Receiving the Working Family CreditGovernor Mark Dayton has also made the Working Family Credit a priority in his budget. The Working Family Credit is Minnesota’s version of the federal Earned Income Tax Credit (EITC). A strong and growing body of research on the EITC and similar tax credits finds they are successful in supporting parents’ work efforts, and that children in families receiving these credits are healthier, do better in school, and are more likely to attend college and earn more as adults.

Expanding the Working Family Credit can also help the state make progress on addressing racial disparities in economic well-being. About 30 percent of households eligible for the credit are people of color, and Voices for Racial Justice has included Working Family Credit expansion in their 2016 Racial Equity Agenda as one of their recommended policies to make Minnesota work for everyone.

The Senate tax bill also includes provisions so that Minnesotans receive the tax credits for which they qualify, and can use their tax refunds to build savings and build a stronger economic future. These provisions come from Senate File 2578 authored by Senator Lyle Koenen, and they provide additional funding for nonprofit organizations offering free tax preparation services (known by the acronym VITA) to serve more Minnesotans and to provide financial capability services at tax time, such as opening a savings account.

There is not a lot of time for the tax conference committee to do its work before the session ends on May 23. But these are two provisions that clearly deserve a place in the final tax bill.

-Nan Madden

Posted in Taxes | Tagged , | Leave a comment

Asset tests for health care: a solution in search of a problem

The Minnesota House Health and Human Services budget includes a proposal that would add a counterproductive, complex layer of bureaucracy between Minnesotans with low incomes and health care. If enacted, this provision would impose asset limits for some Minnesotans who get health care coverage through Medical Assistance (MA) and MinnesotaCare.

This practice was abolished for most non-elderly Minnesotans and people without disabilities in 2014, and is one that deserves to be filed under “may sound simple, but is harmful and complicated in practice” for the following reasons:

  • It is unnecessary. People with low earnings but enough income from assets to maintain a higher-income lifestyle are already ineligible for MinnesotaCare and MA. When a person applies for health care coverage through MA or MinnesotaCare, their eligibility is determined based on a comprehensive measure of income called modified adjusted gross income (MAGI). MAGI doesn’t just include earnings like wages, tips and self-employment income; it also folds in a family’s other resources derived from assets, like capital gains, investment income and withdrawals from retirement accounts.
  • It is inefficient. Only a tiny portion of MinnesotaCare and MA enrollees have assets above the proposed limit, but the policy would complicate administration of these health insurance programs for everybody. In 2013, the state estimated that eliminating asset limits for most categories of Minnesotans eligible for MA would increase enrollment by just 1 percent. MA and MinnesotaCare serve more than a million people; re-instituting asset limits would make things more complicated for all of them. Other states’ experiences show that asset limits do not significantly change the number of people who access public supports, and they may even cost states money due to the burden of administering these inefficient rules.
  • It penalizes families who’ve saved for their future. The asset limits proposed by the House are $10,000 for a single individual and $20,000 for bigger households. Imagine the difficult decision that forces on someone who has saved for years to put a down payment on a house, or on soon-to-be-parents building up a financial cushion before they welcome their new family member. Families should not have to choose between a necessity like health insurance and saving for their futures.
  • It is especially harmful for farmers and small-business owners. Small businesses and farms require a lot of assets that may not always generate a lot of income. MinnesotaCare is an affordable health insurance option allowing entrepreneurs and independent farmers to weather recessions and depressed crop prices without sacrificing their health insurance or abandoning years of hard work and careful investments in their future.

When a Minnesotan falls on tough times, they should have access to affordable, quality health insurance. A basic necessity like health care shouldn’t be held hostage just because a family has managed to build a modest nest egg. Policymakers should drop this harmful idea.

-Ben Horowitz

Posted in Budget Proposals, Health Care | Tagged , , , , | Leave a comment

House and Senate have very different priorities in their supplemental budgets

With their conference committee about to begin, the House and Senate have put together their omnibus supplemental budget bills, which have different priorities for the current projected $900 million surplus. This doesn’t come as a surprise; when the two bodies released their budget targets earlier this session, the House allocated only $2 million of the surplus to areas outside of tax and transportation, and the Senate proposed $463 million in net general fund spending for non-tax and transportation budget areas. We’ve previously blogged about the various health and human services proposals. Today’s blog looks at proposals in E-12 education, higher education and economic development.

The Senate supplemental budget proposes several investments in education. It includes $18 million in FY 2017 for school districts to establish voluntary pre-kindergarten programs, with priority given to areas with higher poverty rates and a lack of high quality pre-school options. The Senate also proposes $3 million in increased funding for the Minnesota Reading Corps. In addition, the Senate proposal sets aside funding to support development of teachers and proper placement of support staff to help improve students’ learning environments.

In higher education, the Senate proposes $14 million for colleges and universities to narrow gaps in college education attainment between students of color and white students. The Senate also includes funding for the University of Minnesota to keep the price of tuition down and support for student programs at Minnesota State Colleges and Universities.

In economic development, the Senate allocates $2.5 million to make housing more affordable, $85 million for broadband for Greater Minnesota; and $34 million for the Department of Employment and Economic Development for several community development initiatives and workforce training and development.

The Senate also makes it clear that addressing equity issues is a key goal during this legislative session with a proposal that includes $91 million for FY 2017, two-thirds of which focuses on economic development and jobs.

Working with such a small target, the House’s supplemental budget proposal primarily reallocates existing funding, with new investments in only a few areas.

The House’s primary new investment is in economic development. It allocates $15 million in this biennium to increase broadband access for people in Greater Minnesota, and includes several workforce development grants which amount to $3.9 million.

In education, the House’s limited new investments are made possible through savings resulting from a loan refinancing option for some school districts (which is also included in the Senate proposal). The House includes $5 million to improve school-based mental health services and $6 million in grants for some school districts to better serve students who have challenging behaviors or may be suffering from trauma. The House also proposes $1.5 million in increased funding for the Minnesota Reading Corps. The House education bill also changes the way equity funding can be allocated. In the past, this was only available to metro area schools, but the House proposes an additional $7.7 million in FY 2017 and stipulates this equity aid be available to non-metro schools as well.

The supplemental budget conference committee will meet to negotiate on a supplemental budget bill that covers these major areas of the budget, as well as health and human services, public safety, environment, agriculture and state government.

-Clark Biegler

Posted in Budget Process, Budget Proposals, Education, Higher Education | Tagged | Leave a comment