The 2014 Legislative Session convenes on February 25 with the state in a much stronger financial position than a year ago. In spite of inheriting a $627 million deficit and an additional $801 million debt to schools, the legislature structurally balanced the budget last session with a combination of spending reductions and new revenue.
As a result of this structurally balanced budget and the state’s steady economic growth, early projections from the latest economic forecast indicate a budget surplus that will completely erase the remaining $246 million owed to schools and leave a remaining balance of $825 million. This positive balance is another encouraging indicator of Minnesota’s fiscal health, and if the projected surplus holds up through the next economic forecast on February 28, the 2014 legislature will need to consider how best to use those funds.
Although it is difficult to predict specific priorities for a potential surplus, the State Economist and other non-partisan financial experts have already called attention to the fact that Minnesota lacks an adequate budget reserve, or “rainy day fund,” to withstand future economic volatility. To that end, bolstering the budget reserve to reinforce Minnesota’s fiscal stability would be a likely priority for a portion of potential surplus funds.
While it is too early to commit projected dollars toward actual expenditures, the Senate will evaluate all options based on the more up-to-date February forecast to ensure Minnesota’s budget remains “in the black” heading into the next fiscal year.
Bonding: We must pass a responsible bonding bill to take care of our infrastructure and state-owned buildings. In District 57, which I represent, I am hopeful the Minnesota Zoo will be a part of the final funding package. Many of the Minnesota Zoo’s buildings and infrastructure systems are 35 years old. This session, the zoo is asking for $54 million for infrastructure repairs and upgrades to main building exhibits and guest facilities. The Minnesota Zoo is an important state asset that is a gateway for STEM (science, technology, engineering, and mathematics) education. It’s also important to note that the Minnesota Zoo provides as much as $146 million per year in economic impact to the state, bringing in an estimated 1.4 million annual visitors.
Anti-Bullying Bill: The anti-bullying bill is a result of recommendations from the 2012 Governor’s Task Force on the Prevention of Bullying. The 54-page report concluded that Minnesota’s 37 word anti-bullying law was too weak to effectively safeguard students in Minnesota schools. The 2014 Safe and Supportive Minnesota Schools Act would require schools to draw up detailed anti-bullying policies and set up protections for students who face harassment, including those bullied because of their race, religion or sexual orientation. Last spring the bill cleared the House but stalled in the Senate as other issues took priority. This time around, I am hopeful the bill will pass and be signed into law.
Increasing Minimum Wage: The last time the minimum wage was raised by the State of Minnesota was 2005. As a result, the state’s minimum wage rate for large employers is $6.15 and $5.25 for small employers. The state’s minimum wage is so low that it is superseded by federal law because the federal government has established a higher rate ($7.25). Minnesota is one of only four states that have a minimum wage below the federal minimum wage.
Lease-levy Legislation: Beginning with the 2014-15 school year, Minnesota school districts will offer all-day kindergarten to students. The 2013 legislature made this offering possible with $138 million in funding. Adding all-day kindergarten and early childhood initiatives have put pressure on districts to provide appropriate school and classroom space. During the 2014 session, I will introduce a bill that will provide additional per-student building lease-levy funding so school districts can find space to bring these educational opportunities to their students.
Higher Education: As Vice Chair of the Senate’s Higher Education Committee, I had the opportunity to visit 22 college campuses around Minnesota last summer and fall. Through those visits, I learned about many of the innovative programs and offerings at Minnesota’s colleges and universities. I also had the chance to talk with groups of students to hear their concerns and experiences. A significant topic raised by many students was the issue of credit transfers. Students expressed frustration at credits not transferring from one state college to another, as this could delay their graduation timeline and end up costing more in tuition. I have spoken with Chancellor Rosenstone from the Minnesota State Colleges and Universities (MnSCU) system about these students’ concerns and have his assurance that MnSCU is evaluating how to more effectively handle credit transfers.
Another key issue the students talked about at length in our conversations was student loans. I believe that the cost of getting a post-secondary degree or certification is becoming increasingly burdensome for Minnesota’s young people. The average debt for college and university graduates is more than $31,000. Our students are leaving college with a huge burden that prevents them for taking the next steps in their lives: buying their first new car, getting married, or buying their first home.
At the same time, we’ve recently heard more about the importance of a college degree. For instance:
• Those with a college degree make $17,500 more per year than those without a college degree. This wage gap has doubled in recent decades.
• Those without a college degree are four times more likely to be unemployed.
In response to the high cost of a post-secondary degree, I introduced a bill last session where qualifying students and businesses could claim up to $4,000 tax credit on qualifying student loan payments. This bill has already passed the Higher Education Committee, and will hopefully continue its way through the legislature.
Additionally, I authored legislation requesting the Office of Higher Education to look into the feasibility of helping refinance student loans. This would hopefully allow Minnesotans to alter the terms of their loans and pay a lower interest rate over the life of their loans, saving thousands of dollars for our students.
I just want to remind you that by visiting the Senate’s website (www.senate.leg.mn.us), you can have access to the committee schedules throughout the legislative session. If there is an issue that you feel passionately about, I encourage you to contact the Committee Administrator (you can find their contact information in the “Senate Committee” links) and offer to join the conversation. Your input is welcome and appreciated. If you want information on the status of these bills and others, please e-mail me at firstname.lastname@example.org. Follow us on Facebook at https://www.facebook.com/senatorclausen and Twitter at @SenGregClausen. As always, please contact me with questions or suggestions on any issue. You can reach me at 651-296-4120 or write to 320 State Capitol, St. Paul, MN 55155.