State Budget & Bonding Bill 2013-14 Session

[Nick]

http://www.startribune.com/politics/sta ... 12341.html

Dayton retools budget as poll indicates public approval lagging

When Dayton unveils his new budget proposal this week, the plan will lean heavily on a tax hike for the wealthiest 2 percent of Minnesotans and he is strongly considering a significant bump in the tobacco tax, sources say.

Gov. Mark Dayton is intent on raising income taxes on high earners in Minnesota even as he jettisons parts of an ambitious tax overhaul package that has stirred division at the State Capitol for weeks.

When Dayton unveils his new budget proposal this week, the plan will lean heavily on a tax hike for the wealthiest 2 percent of Minnesotans and he is strongly considering a significant bump in the tobacco tax, sources say.

The DFL governor is likely to use the extra money to wipe out the deficit and pay for new education initiatives, boost aid to local governments and increase money for public safety.

[...]

Anyone have any thoughts about this? I'll reiterate what I've said before and suggest that the whole "ugh, but the economy" thing has started to be a bit of a canard. I see multiple cranes in all directions from my apartment, at least.

[stp1980]

Have not heard anything yet on this. Wondering if any transit items will get into it. Other than talk of the transit tax increase proposed by Dayton nothing specific has surfaced, although this usually seems to be an endgame item after the budget gets completed. Anyone else hear anything?

[mulad]

If I understand correctly, this is a "budget year" and next year is a "bonding year". There's usually a resistance to issuing bonds during budget years, though usually a tiny amount does go through. Similarly, there's usually a bit of budget tweaking in bonding years, though the focus tends to be figuring out what needs bonding. Bonds tend to cover much smaller values, though -- A biennial budget is on the order of $40 billion, if memory serves, while I think bonding is more on the order of $500 million to $1 billion at a time.

I'd like to be more specific, but I'm not feeling like looking this up at the moment. In the past, I've spent hours trying to find correct info and was never sure if I really got it or not.

[Viktor Vaughn]

A supermajority is neccesary to pass bonding bills which will require Republican votes in both the House and the Senate. Republicans have historically been hostile to bonding bills in budget years. But I could see a scenario where enough Republicans would go along with a small bonding bill in order to get their projects included or gain leverage in budget negotiations.

Dayton has supported off-year bonding to take advantage of low interest rates, put people to work, and catch-up on deferred projects.

My guess would be we have either a small bonding bill this year or none at all. I'd anticipate a large bonding bill next year.

[Le Sueur]

News broke last week that Dayton was interested in splitting 1.5 billion in bonding between this session and next.

Upgrades for regional civic centers, construction at the Minneapolis Veterans Home and another phase of the Capitol renovation will all be part of a borrow-to-build package Gov. Mark Dayton intends to release next week.

The Minnesota governor previewed elements of his roughly $750 million bonding proposal in comments Tuesday to reporters.

Senate Majority Leader Tom Bakk, DFL, has stated he would prefer to wait until next year, but also believes they would have the 81 votes needed including 8 Republican Senators.

The major pressing issue is they need to allocate more money to the Capitol renovation to keep it going.

[Le Sueur]

Dayton released his 2013 Bonding Proposal this afternoon. Don't shoot the messenger, I don't wanted any part in the Strib comment section.

Strib Article: http://www.startribune.com/politics/sta ... 69621.html
Map: http://www.mn.gov/governor/budget/bonding/
Categorized Spreadsheet: http://www.mn.gov/governor/images/GMD-2 ... onding.pdf

[twincitizen]

Ok, now Governor Dayton is starting to live up to the "unpredictable" behavior that so many have criticized him for:

http://www.startribune.com/politics/sta ... 34551.html

The Senate seems committed to sales tax reform, including some base-broadening and lowering the rate from 6.875 to 6.0%

I think that broadening the base and lowering the rate is critical, and should not be controversial as it actually brings us in line with the policies of EVERY STATE SURROUNDING US. We are the only ones not taxing clothing and some services, and have one of the highest base rates in the country. Especially if we are looking at adding another .5% for transit in the 7-county metro, bringing down the base rate is HUGE. This doesn't even have to be about revenue...it can (and maybe should) be revenue-neutral. Downtown Minneapolis has the highest restaurant taxes in the country but I don't think we put that in our tourism literature next to #1 Bike City, Theater seats per capita, etc

Tip of the hat to the Senate for staying on this, and wag of the finger to Governor Dayton for abandoning one of his own proposals now that he's decided he doesn't like it anymore. Even if we don't get the transit taxes this session, as Senate leadership indicated this week, broadening the base will still bring more money to the following local option taxes: .25% 5-county CTIB, .15% Hennepin County Ballpark, .5% Minneapolis stadia & convention center, .5% St. Paul STAR

[twincitizen]

The House passed the "truce" legislation for Target Ctr & Xcel Ctr. They also called for both facilities to explore joining the MSFA (currently just the Dome/new Stadium, as far as I know). While I think that is a great idea to get these facilities under one governing board, how would they do that with Target Center and Xcel currently owned by their respective municipalities?

Perhaps we can figure out the ongoing funding later. The easy answer is a small sales tax statewide. If .15% in Hennepin County brings in ~$350MM+interest over 30 years for Target Field, what would it take statewide to pay off all of them? It can't be more than .15%. Hell, just increase the Legacy Act from .375% to .5% and call it done!

http://blogs.mprnews.org/stadium-watch/ ... l-centers/

[twincitizen]

$1 Billion budget surplus (remainder of 2013-2014 cycle) announced today:

http://blogs.mprnews.org/capitol-view/2 ... s/?from=hp
http://www.startribune.com/politics/sta ... 81681.html

After schools and airports are repaid IOUs (see stories for details), over $800MM surplus will remain.

Question for those smarter than I: wouldn't it be a sound idea to pay off the public stadium debt in one fell swoop? Wouldn't that save taxpayers hundreds of millions of dollars in interest over the life of the bonds? (30 years?) It might be a tough sell, but I think you could convince enough folks that it is the right thing to do, given the mess we're in. The stadium deal isn't going to be undone, and the e-pulltab money isn't going to surface. The tobacco inventory tax last summer was a short-term fix to plug a hole this year. Ongoing tobacco taxes are not going towards the stadium, despite popular belief. If e-pulltabs don't pick up sales (which they clearly are not doing) a large deficit will remain, to be filled by the general fund. Why not just pay it off now? Or put a huge down payment, so taxpayers are paying less interest?

[FISHMANPET]

Borrowing rates are pretty low right now, it's almost cheaper to borrow than to pay full price, because of inflation.

I'd rather see this dumped into transit capital expenses to leverage some federal dollars, but that's just me. But we probably wouldn't save much real money paying off debt we've incurred right now. Older debt maybe, but not new debt.

[MNdible]

It's rare that I agree with the current crop of Republicans, but I'll agree that the B2B taxes that were snuck in at the bitter end of negotiations are generally dogs, and I'd support repealing them before they go into effect.

[Viktor Vaughn]

Apparently Dayton agrees with the current crop of Republicans too, as I just heard him on the radio proposing to scrap these taxes.

[RailBaronYarr]

How much would be left in the surplus without these taxes? I, too, rarely agree with the dogma presented by the MNGOP, but this seems like a wise move. I think given the fact that a dedicated transit funding source wasn't secured in the last session, whatever remains could be great to put down for some transit capital improvements (in my mind, do ALL aBRT lines ASAP, put the rest toward a potential rail project). Unfortunately, I don't think you'd get enough support from legislators/constituents.

[talindsay]

I talked with my legislator about it yesterday and he thinks the surplus will basically be used (after all paybacks are completed) to repeal the B2B taxes and fund HHS. I was hoping for education and transportation goodness but his conjecture is that if it gets divided up there isn't enough there, the B2B taxes aren't working out, and HHS really, really needs the money.

[David Greene]

From what I am hearing, people are pretty pessimistic about getting any transit funding this year. It goes to show that just because the "right" people are in office doesn't mean they'll do the right thing. Power is more than winning elections.

[twincitizen]

Hey even I'm not convinced that increasing taxes a second year in a row is the best move. Even if Democrats could pass some combination of higher/indexed-to-inflation gas taxes and a transit-dedicated sales tax increase in 2014, is it worth it to lose the House majority and possibly the governorship?? That's a tough pill to swallow.

The alternative is not raising any taxes in 2014, actually rescinding some of the unpopular B2B taxes, having a huge budget surplus going into the election and looking like ****ing superheroes. Democratic majorities are retained and transportation funding is a slam dunk in 2015. That just seems like a better outcome all around.

[mulad]

Funding is running out for planning/preliminary engineering for Northern Lights Express, expanded rail service to Chicago, and the Zip Rail service for Rochester. NLX is the furthest along the path among those (already in preliminary engineering). They've been making do with a fairly small allocation from a few years back. MnDOT is planning to ask for some bonding dollars this year, but shoving some surplus around would be good.

It's hard to say if NLX will really qualify for the 80% matching funds from the feds that they've been hoping for all these years (and whether the feds have any money to spend is another question), but if it does, the total local match would probably be on the order of $150 million.

If we can ever get Wisconsin on board with HSR to Chicago, the cost expected for the Minnesota side of the river was expected to be around $1 billion -- that's probably more likely to hit whatever targets would be needed for 80% match, so maybe $200 million from the state & local governments. And of course the freights may contribute some dollars, though it's hard to say how much. Canadian Pacific's route along the river is reportedly at capacity, so they might take on some of it, though it's fairly widely believed that the current CEO, E. Hunter Harrison, is going to try to extract every last ounce of capacity out of existing infrastructure first.

NLX is getting pretty close to shovel-ready, but is still a few years out, so maybe only kick them a fraction of that $150 million. Chicago-bound HSR is farther out, but it'd be really nice to get some money for a 2nd daily train right away -- too bad that's likely to be pretty expensive due to CP being at capacity.

[phop]

http://www.startribune.com/politics/sta ... 94921.html

Dayton said that if the state’s financial numbers hold up by the time legislators convene in February, he would consider borrowing an additional $200 million to continue improving the state’s roads, bridges and buildings. Legislators want to borrow about $850 million for construction projects in the upcoming session.

I would hope transit would get some of this as well.

[David Greene]

Hey even I'm not convinced that increasing taxes a second year in a row is the best move. Even if Democrats could pass some combination of higher/indexed-to-inflation gas taxes and a transit-dedicated sales tax increase in 2014, is it worth it to lose the House majority and possibly the governorship?? That's a tough pill to swallow.

Frankly, I'm really sick of this argument. Republicans got booted out because nothing got done. When you have power, USE IT. Otherwise, why are you there? Apathy from voters is typically what has hurt Democrats in recent elections, not anything they've actually done. On the contrary, Obama won the ACA referendum.

[MNdible]

The bonding session is not the right time to undertake major policy initiatives. Fix the B2B taxes, pay back the last of the gimmicks, refill the rainy day fund, and maybe bond a bit extra. That's enough.