Lawmakers prepare for 2018



The start of the 2018 Minnesota legislative session is still 48 days away, but lobbying groups and lawmakers are already preparing. Local representatives Gene Pelowski (DFL-Winona) and Steve Drazkowski (R-Mazeppa) said they both expect a new state tax bill to be passed this session, and the state is also expected to pass a bonding bill this spring, borrowing perhaps over $1 billion. Meanwhile, the Republican-led legislature is in another constitutional showdown with DFL Governor Mark Dayton.

“I don’t see how you can hold both,” Pelowski said, echoing the DFL’s position and the legal opinion of the state attorney general that Senator Michelle Fischbach (R-Paynesville) cannot be both president of the state senate and lieutenant governor. This is Minnesota’s latest constitutional feud, and it started when Dayton appointed Lieutenant Governor Tina Smith to replace U.S. Senator Al Franken, who resigned yesterday. Dayton could have picked any one of millions of Minnesotans to replace Franken, Drazkowski said. “He knew when he chose that lieutenant governor it would set up a constitutional question. He knew that, and he did it anyway,” Drazkowski stated. Under the state constitution, the president of the senate is next in line to fill the vacant lieutenant governor seat. If Fischbach leaves the senate, it gives the DFL a chance to deny the Republicans control of the senate, which they held by a one-vote margin last spring. Republican leaders have argued Fischback can legally hold both seats, or, alternatively, urged Dayton to call a special legislative session so a DFL president of the senate can be elected to take the lieutenant governor post. In her opinion that Fischbach could not hold both offices, Minnesota Attorney General Lori Swanson cited article IV of the state constitution that states that no legislator “shall hold any other office under the authority of the United States or the state of Minnesota, except that of postmaster or of notary public.” Minnesota Senator Mike Goggin (R-Red Wing) called Swanson’s opinion “unfortunate,” adding, “We don’t need another lawsuit.”

The last lawsuit between legislative leaders and Dayton was over Dayton’s decision last year to veto funding for the legislature itself. Dayton did that in a bid to force the legislature to renegotiate cuts to cigar taxes, estate taxes, and business property taxes. He signed a tax bill last spring that included those tax cuts, but he said they were snuck in the bill and he wanted them to be reversed. After the Minnesota Supreme Court upheld his veto in November, Dayton called the cuts “excessive special interest tax reductions, which will jeopardize Minnesota’s future financial stability.” However, the legislature has come up with other funding sources that legislative staff say should last until May at least. The veto has not yet forced lawmakers to renegotiate; how exactly the disagreement will be resolved is yet to be determined.

“I would guess that first day of session we’ll pass legislation that funds the legislature and [Dayton] may veto,” Goggin said. Goggin added of the tax cuts Dayton wants to renegotiate: “Those bills were already signed by Governor Dayton, and they’re all part of law now; I don’t see anybody wanting to reopen those … We’ll let the chips fall where they may. I don’t know what the governor will do.”

Drazkowski also discussed the need to pass new legislative funding and, potentially, to overcome a second veto. Drazkowski praised the Supreme Court ruling for clarifying that the judicial branch should not appropriate money, said the feud over legislative funding was overblown by the media, and stated that the legislature would not meet Dayton’s demands for reversing last year’s tax cuts.

Pelowski said that Dayton might sign a legislative funding bill after all. The Winona representative added that the disagreements over last year’s tax cuts may be addressed through a new tax bill this spring. “It’s now clear there will have to be a tax bill because of the massive changes that will hit Minnesota as a result of the federal changes,” Pelowski said, referring to the federal tax overhaul recently passed by Congress and signed by President Donald Trump. Pelowski said Minnesota would have to change its own tax laws to adjust, and Dayton may use a new tax bill as an opportunity to renegotiate last year’s cigar, estate, and business tax cuts.

Drazkowski, too, expects a tax bill this session. “We’re going to be going over what the federal tax cut bill means around the needs for conformity for Minnesota,” he stated. His own priority for state tax reform is building on last year’s agriculture-to-school legislation, which gave farmers a break on taxes used to repay school construction bonds. Drazkowski said last year’s legislation used state funds to supplant what farmers would otherwise pay toward school bonds. He called that a partial solution, and said that he would push for a system in which farmers are only taxed on the value of their house, their garage, and one acre of land —not their entire acreage. That would shift part of the tax burden for school bonds off the state and onto local businesses and residences. “The right thing to do would be collect it equally and fairly to begin with,” Drazkowski stated.

Even-numbered years are also when the legislature traditionally passes its own bonding bills to borrow money and fund construction and repair projects across the state. Dayton has not released a bonding proposal yet. Drazkowski said the government does not need to borrow any more money. “I am not going to be voting for a bonding bill, and I am going to be very much encouraging the house to not pass another borrowing bill,” he stated. Citing a past bonding bill that failed, Pelowski said that the state is still behind on capital investments. Goggin said he was hopeful that the legislature could fund more road and bridge repairs through a bonding bill this session, and that Wabasha’s request for funding for upgrades at the National Eagle Center would be high on his priority list. Even though some people scoff at it, the proposed ski jump facility outside Red Wing is a good idea that would attract people to Minnesota, he added. “I’m all about making sure we have economic development,” Goggin stated.

When Goggin, Pelowski, and Drazkowski meet with the Winona County Board later this month, the board’s top request will be for the state to start paying its fair share for human services programs the state requires the county to provide. County leaders say the legislature used these unfunded mandates to balance its own budget on the backs of county property taxpayers. None of the three lawmakers were very optimistic that any additional funding for the 2018-2019 budget would be passed this spring.

Pelowski has, for years, pushed for the legislature to avoid last-minute, high-stakes dealmaking at the end of session. “You’re looking at a 14-week session,” he noted, explaining that that does not leave a lot of time for lawmakers to craft complex tax legislation and a bonding bill, not to mention resolving disagreements with Dayton. “It’s as unpredictable as it has ever been,” Pelowski said.


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