- Associated Press - Friday, June 26, 2015

Star Tribune, June 23

In Minnesota, a state budget that’s bigger than it seems

The dust and dollars are settling after the Minnesota Legislature’s five-plus months of budget-setting - the “plus” being a June 12-13 special session. The next biennial budget’s contours are now visible, thanks to preliminary totals from state finance officials, and they include features that may surprise Minnesotans. For instance:

- Total authorized general fund spending for 2016-17 reached $41.8 billion, $706 million more than forecast under previous law. That represents the third-lowest rate of growth, biennium over biennium, since 1960 - a bragging point for the Legislature’s fiscal conservatives. But it’s not the whole story.

- That spending total was suppressed by moving $731 million in allocations out of the 2016-17 general fund, in several ways. The largest portion, $429 million, was accelerated to occur this month and thereby count as spending in fiscal 2015. The remainder involved delayed payments, borrowing from special purpose funds, and assigning some health care spending to the fund previously reserved for MinnesotaCare.

Those are the sorts of shifts and gimmicks that kept the state budget technically in the black during the shortfalls of the Great Recession. It’s odd - and troubling - to see them employed when the state’s 2016-17 forecast showed $1.867 billion in revenues to spare. We doubt that auditors at the ratings services that set state bond ratings will be amused.

- Add those shifts, and spending authorized by the 2015 Legislature totals $42.6 billion, for biennium-over-biennium growth of 8.3 percent, the sixth-lowest since 1960. That’s about $200 million less than DFL Gov. Mark Dayton recommended in March. The Legislature’s fiscal hawks were able to whittle down Dayton’s spending plans by less than 0.5 percent. So much for claims that Dayton was not a winner this session.

- The House GOP majority was not successful in repealing Minnesota Care, the state’s 23-year-old subsidized health insurance program for the working poor. But the $77 million shift in health care spending obligations from the general fund to the fund that supports MinnesotaCare adds to the trouble that’s ahead in state health care funding.

The 2 percent tax on health care services that supports MinnesotaCare (the “provider tax”) is scheduled for repeal in 2019. This session’s additional drawdown of a fund that’s due to run dry in four years makes all the more urgent the work of a new state commission on health care policy, set to commence this summer.

- Left unspent was $865 million for the 2016 Legislature to squabble over - and the prospect of more to come if the state economy stays strong. Already since February, state tax collections have netted $413 million more than forecast.

That much remaining on the state’s bottom line is bound to combine with election-year politics to whet legislative appetites for a tax cut. In coming months, legislators are likely to tell Minnesotans that they’ve got a tax cut coming, and that state and local governments claim too much of their incomes.

No one wants to pay more taxes. But Minnesotans should know this: The “price of government,” the share of total Minnesota personal incomes claimed by state and local taxes, has been falling for years, from 17.4 percent in 1996 and 16.2 percent in 2006 to a projected 15.2 percent in 2016. It’s forecast to drop through the remainder of this decade - not because tax cuts are in the offing, but because incomes are growing again.

Keeping state and local governments robust enough to do all that residents expect of them already looks challenging, before a tax cut is factored into their budgets. At the very least, Minnesotans need to fully understand what they would be giving up in return for lower taxes.

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St. Cloud Times, June 22

Don’t let route debate delay Sandpiper oil pipeline

The vitally important Sandpiper oil pipeline proposal is making some progress toward becoming reality.

However, there remains a huge question to resolve: the route the 612-mile pipeline would take from North Dakota to a terminal in Superior, Wisconsin.

First, an update on the progress of the Sandpiper proposal. Recently, the Minnesota Public Utilities Commission approved a certificate of need for the proposed $2.6 billion pipeline. That is good news because the pipeline needs to be built to reduce the glut of oil trains that now carry oil from the Bakken Fields of North Dakota to market.

The pipeline is expected to carry as much oil per day as 1,700 railroad tank cars. The pipeline will reduce the danger of accidents from the large number of oil trains running through the St. Cloud area each month. Reducing the number of oil trains will help reduce the backlog experienced in shipping grain, coal, paper and other commodities on the railroad lines.

Nothing will be built until the route is determined.

Enbridge Energy has proposed a northern route that environmental groups claim will put sensitive lakes, streams, wetlands and wild rice areas at risk. Because the pipeline runs through remote areas, the risk of a spill going undetected for a longer time is possible, opponents say.

An alternative route has been proposed that would take the pipeline in a southern direction. The alternative route would take the pipeline through parts of Todd, Morrison, Benton and Mille Lacs counties in Central Minnesota. Certainly those areas also include lakes, streams, wetlands and agricultural areas. However, the alternate route does pass closer to more populated areas than Enbridge’s preferred route.

The PUC has directed the Office of Administrative Hearings to restart the route permit proceedings. The PUC also said a modified route should be considered.

The agency should begin the process quickly and do all it can to streamline it. The process needs to include public hearings in areas included in the two routes. But keep the debate to the routes.

The pipeline project is also putting close to 1,500 jobs in limbo until the final permit is given.

Delays need to be avoided. Each day the high number of oil trains pass along Minnesota tracks, the odds of an accident and environmental mess increase. The safest way to transport the more than 300,000 barrels of oil a day from North Dakota to Wisconsin is a pipeline. Concern for the environment is a priority. But delays are harmful.

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The Free Press of Mankato, June 21

The scorecard for outstate Minnesota provided by the Minnesota Legislature and Gov. Mark Dayton can be summarized as significantly under a .500 win-loss record.

That came on the hope that outstate Minnesota would for once have a winning record. The results are disappointing at best and confounding at worst. That’s because outstate Republicans who helped the party win the majority in the House touted their goals to shore up the needs of a long neglected outstate.

Wins stacked up like this: More money for nursing homes ($138 million), relief for farmers facing bird flu losses, and maybe a smattering of other things so insignificant that don’t register on anyone’s radar.

Losses that impact greater Minnesota most included: Broadband grant funding that was cut $10 million from last year’s $20 million, no tax bill that would have provided farmers property tax relief, no transportation bill that would have shored up crumbling roads in outstate Minnesota, no increase in local government aid to small towns, no funding for workforce housing tax credits.

Among the losses, the lack of transportation funding will do the most damage to outstate Minnesota. Every year, miles and miles of Minnesota roads in outstate fall into a state of disrepair where fixing them will cost twice as much. Yet, leadership in both parties delayed again.

Both the GOP and the DFL governor and Senate agreed mostly on the scope of the need. That they could not compromise to get it done is disappointing. The DFL House and Senate transportation experts came up with a compromise, ceding to some big GOP issues like big reductions in the gas tax and offsetting tax cuts elsewhere. But by that time the regular session was over, and the GOP House and governor were trying to negotiate a quick special session.

When a bipartisan Legislature during the last session approved $20 million in broadband grant funding, observers figured some kind of increase would be a no-brainer given the $20 million only served half of the $40 million in requested funding from needed broadband projects all over Minnesota. The “compromise” plan was a $10 million cut and would have been zero had not outstate newspapers chided their GOP lawmakers to rectify the extreme policy of one suburban Republican lawmaker.

An outstate workforce housing program did get $4 million in funding, but that pales in comparison to the need and the available funds of a $2 billion state budget surplus.

Locally, the record appears much the same. The Children’s Museum of Southern Minnesota got $400,000, about $100,000 in a bonding bill to provide flood relief and $300,000 in Legacy grant funding. At the same time, a needed $7.1 million upgrade to the St. James sewer system went unfunded.

Even former GOP legislators were making the case that outstate Minnesota did not have a winning record. Brad Finstad, former Republican lawmaker from New Ulm, and now in charge of the Center for Rural Policy and Development, described the lack of a transportation bill as one of the session’s greatest failures, according to a report by Minnesota Public Radio.

Former GOP Rep. Dan Dorman, of Albert Lea, and now leader of the Greater Minnesota Partnership lobbying group, said the promise of the session being aimed at putting greater Minnesota needs first clearly fell far short.

“Everybody had these high hopes it would be the greater Minnesota session. And clearly, it can’t be called that,” he told Minnesota Public Radio.

While it should never be the intention of legislators to simply fill their home districts with unnecessary pork projects, they should be able to fill real needs for fixing crumbling roads and upgrading sewage treatment plants.

The win-loss record shows outstate has been relegated to the bottom of the standings. Again.

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