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State Government Omnibus proposal

Governor Walz recommended targeted resources for state government services, including $112 million in additional investments over base funding. His proposal provides $28 million in additional money for MN.IT Services to secure Minnesotans’ electronic data, consolidate data centers, and defend state agency IT systems. This proposal also includes $4 million to expand MN.IT’s IT project portfolio for state agencies to ensure more of the state’s services are accessible to citizens online.

The proposal provides $11 million more to the Department of Revenue to help taxpayers receive their tax returns more quickly and $14 million for Minnesota Management and Budget to help attract and retain high-quality state employees. Funding for the upcoming 2020 Census is provided along with additional resources for the Attorney General to provide legal services to rural county attorneys.

The Senate Republican state government budget seeks to cut $16 million and threatens the delivery of the services Minnesotans expect from their government. The proposal cuts the budgets of Revenue, Admin, and MMB by 7%, takes $7 million in carryforward funding from the House of Representatives and discontinues $12 million in state aid payments to the Public Employee Retirement Association (PERA) due to the merger of the former Minneapolis Employee Retirement Fund (MERF).

The Senate Republican proposal includes controversial policy provisions as well, including penalizing agencies for unfilled positions, limiting the authority of MN.IT Services, impeding the implementation of collective bargaining contracts in the interim, and complicating rulemaking relative to the Residential Building Code.

Republicans refuse federal Election Security Funding

$6.5 million in federal Help America Vote Act (HAVA) funds continue to be held up in conference committee. Last month, the DFL-controlled House called a conference committee, but Senate Republicans on the committee refused to attend. The Help America Vote Act (HAVA) was passed in 2002 and allocated federal funds to states for the use of updating voting equipment and election procedures. In 2018, Minnesota was appropriated more than $6.5 million in federal funds for that purpose; however, without legislative approval, the funds cannot be used. HAVA has bipartisan support this session, yet Republican Senators have chosen to delay authorization for the full amount of funding in the Senate.

Minnesota is vulnerable because it is the only state in the country that has failed to allocate the federal funding to their chief election official. The state experienced this vulnerability in the 2016 election cycle when its system was targeted by individuals affiliated with a foreign government. HAVA will secure the statewide voter registration system, provide training to local election officials, and implement security improvements for election systems. Voting is one of the primary ways in which Minnesotans can make their voices heard, and the Senate Republicans’ inaction is putting Minnesotans’ voices at risk. Full funding of HAVA is simply common-sense, and the Senate DFL will continue to advocate for it.  (SF 241)

Pension omnibus bill stalled

The Omnibus Pension bill was considered by the Legislative Commission on Pensions and Retirement this week and includes provisions to improve the administration of public pensions in Minnesota.

The bill extends a program at the Public Employees Retirement Association (PERA) that is currently available for members that are over 62 years of age. The Post-Retirement Option (PRO) program allows members to continue working half-time or less with their employer but still receive their retirement annuity. The program is helpful for municipalities because it allows them to train in new employees with assistance from retirees without reducing their retirement benefit because they continue to work. The omnibus bill would make this program permanent.

The omnibus bill also provides additional state financial support to PERA for the merger of former Minneapolis Employee Retirement Fund (MERF) beneficiaries, continues $13 million in annual state aid to local governments until PERA is fully funded, and requires employees and Minnesota State Colleges and Universities to contribute more to the Individual Account Retirement Plan (IRAP). These funding provisions were not included in the Senate Republican targets, and no agreement has been reached between the Senate and House to move the omnibus pension bill out of the Legislative Commission on Pensions and Retirement. (S.F. 2583)

Punishing state agencies for a tight labor market

A bill was heard this session to require the commissioner of Minnesota Management and Budget (MMB) to determine the number of full-time-equivalent positions by all state agencies and prevent any state agency from adding employees based on that number in FY2020 and FY2021. It would reduce any agency’s operating budget in the next biennium by the amount of salary and benefits left unspent if the agency is unable to fill a job vacancy after 180 days. This would apply to job postings and long-term vacancies during 2019-2021.

The state unemployment rate is 2.8%, making for a very competitive labor market. State agencies have difficulty hiring because they cannot offer salaries that are competitive with the private sector. This bill would create a perverse incentive for state agencies to fill positions within 180 days even if a qualified candidate cannot be found, wasting taxpayer dollars and promoting inefficient government. (SF 2073)

Senate hears proposals to micromanage MN.IT

Two bills were heard to limit the authority of MN.IT, which provides information technology and telecommunication services to state agencies. Having centralized IT services allows the state to use bulk purchasing to save taxpayers money on technology purchases and keep Minnesotans’ digital data secure. One of the bills heard in the State Government Finance Committee would remove the requirement for state agencies to use a new IT division under the Department of Administration. This would result in higher costs to taxpayers because agencies would not benefit from volume pricing through MN.IT.

Another bill heard earlier this session would restrict MN.IT from developing IT projects without direct authorization of the legislature and require state agencies to privately contract for most IT projects. The purpose of MN.IT is to help reduce costs, and the agency already utilizes private contracts if they determine it is in the best interests of the agency involved and consumers. The passage of these bills would result in unnecessary impediments to the operation of information technology in Minnesota and would result in higher costs to taxpayers. (S.F. 910) (S.F. 1245)