Legislative Update: MN House Passes Budget That Creates Economic Growth

Last week, the Minnesota House of Representatives finalized a comprehensive budget that puts us on the path to economic growth and long-lasting shared prosperity. 

When our economy can’t address the growing inequality in our state, government must do what it can to make sure our economy can work for everyone.

With that in mind, we're taking serious steps for the first time in a decade to balance our budget with a balanced approach of cuts, reforms, and raising long-neglected revenue to pay for the things we need to build a stronger economy.
 
The recession hit most Minnesotans hard. As we look to the future, it's important to make sure we encourage a recovery that rebuilds our economy and addresses the challenges we face. We are focused on growing jobs, investing in education at all levels to create a smart, resilient workforce, and making our tax system more fair with property tax cuts and local government aid. This means we ask those who have done well to do a bit more to help with that recovery and help pay for investments that create a brighter future for all Minnesotans.

Most importantly, this budget keeps our promise to Minnesotans to pay back the remaining $854 million school shift. It also solves our budget shortfall and puts an end to the cuts-only, cloak and mirrors approach that left our state with perpetual budget deficits.

You can learn more about the House budget by watching my latest legislative video update. Click here or on the video player to watch.

Here are some details on the House budget’s major components.

Education:

Rep. Paul Marquart, Education Finance Committee Chair, has brought a bill with historic investments in education to create the ‘world’s best workforce’ and give Minnesota a competitive economic edge for decades to come.

To meet ambitious goals such as closing the achievement gap, reaching a 100 percent high school graduation rate, 100 percent literacy by third grade, and 100 percent career and college readiness by graduation, our budget fully funds all-day Kindergarten, invests in early learning childhood scholarships for low-income families, and increases the basic funding formula for K-12 schools by over $315 million.

This plan makes a positive difference for every Minnesota student. Here’s a quick look at the funding increases for public schools in our region:

• $119 per pupil in FY14 (1.2%) and $411 per pupil in FY15 (4.0%) for Northfield Public Schools.

• $117 per pupil in FY14 (1.4%) and $408 per pupil in FY15 (4.7%) for New Prague Area Public Schools.

• $52 per pupil in FY14 (0.6%) and $439 per pupil in FY15 (5.4%) for Tri-City United Public Schools, which includes Montgomery, Lonsdale and Le Center.

Our budget also freezes tuition levels at Minnesota’s public colleges and universities. With tuition more than doubling since 2000, I’m pleased we’re moving forward in a new direction to give students some sorely-needed relief.

Jobs:

The House budget invests in proven strategies to create good jobs, such as the Minnesota Investment Fund, which provides incentives such as low-interest loans to out-of-state businesses thinking of setting up shop in Minnesota as well as in-state businesses thinking of expanding. According to the Department of Employment and Economic Development, MIF leverages up to $33 in private investment for every $1 awarded.

Taxes:

Over the past decade, property taxes increased by 86 percent due to cuts to Local Government Aid. The burden fell on middle class families, which exacerbated the problem of wealth inequality in our state. Middle class Minnesotans have less to save for retirement, send their kids to college, or buy groceries and other goods from local businesses.

The House budget addresses that problem by providing direct property tax relief through restoring the Homestead Credit Refund and a retooled renters’ credit. 380,000 homeowners and renters will see their refunds increase and 200,000 additional homeowners will receive a refund thanks to this plan. Rice County homeowners will see their refunds increase by an average of $203.

In addition, the House budget provides significant Local Government Aid and County Program Aid reform to ensure our cities and towns can continue providing high-quality services like police officers and firefighters that Minnesotans depend on every day. Rice County will receive nearly $450,000 more in CPA in 2014 and the city of Northfield will receive over $660,000 more in LGA. Not only do these investments help our state provide a high quality of life, they also help keep property taxes down.

The House budget invests in priorities like property tax cuts, education, and job creation to create a brighter future for middle class Minnesotans. After 10 years of a cuts-only approach that slashed billions in support for seniors, disabled Minnesotans and students, the House budget uses a more balanced approach by combining targeted cuts with new revenue.

Our plan achieves $150 million in savings from the Health and Human Services budget without harming the most vulnerable Minnesotans, closes corporate tax loopholes, asks high-income earners to chip in a little more, and establishes small increases on tobacco and alcohol to help lessen the financial burden these items put on our health and human services budget. 

Next steps:

Now that the House’s comprehensive budget has passed, a conference committee will work out differences between the House and Senate versions before a final bill heads to Governor Dayton’s desk.

If you have any questions or comments about the House budget or any other issue, please feel free to contact me by phone at (651) 296-0171, by email at rep.david.bly@house.mn, or by postal mail at 559 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.