Legislature approves pension reform Legislative update

Monday morning
The Legislature approved the pension reform bill (Senate File 2620) with just minutes to spare before adjournment Sunday night. It was the last bill passed in both bodies, 131-0 in the House, and 67-0 to concur in the Senate.

The bill heads to Gov. Mark Dayton for his signature.

House schedules pension reform vote for Sunday

Early Sunday morning
The pension reform bill won't come up for a vote in the state House before 1 p.m. today and it is unlikely to get a vote before 7 p.m.

Legislative leaders spent most of Saturday in caucus and negotiating with the governor, attempting to reach a deal on the supplemental finance bill, a tax bill and a potential bonding bill. After hitting an impasse, the House and Senate majorities passed the supplemental omnibus bill early Sunday morning, sending the conference committee report to the governor for a certain veto.

It's likely legislative leaders will meet throughout the day today to find compromise language on a handful of initiatives and send them to the governor before the midnight adjournment deadline.

Friday evening
The supplemental finance conference committee has begun removing controversial provisions from their omnibus bill. Among the items removed is the language moving MNIT under the MN Department of Administration and significant outsourcing of our state’s information technology has been removed. The language outsourcing enterprise software projects unless a separate law appropriating money directs the state to design and build the project in-house has been deleted. There is no longer legislation requiring IT projects be outsourced any differently than projects are today.

Friday morning
Just before 11 a.m. today (Friday), the House placed the pension reform bill on the calendar to be brought up Sunday. This in no way requires them to vote on the bill, but does show their intent to bring it up for a vote Sunday.

May 17

Update at 4 p.m.

House passes constitutional amendment bill

The state House passed a bill today (Thursday) that constitutionally dedicates general fund revenue to new road and bridge construction. The vote (76-54) was largely along party lines.

The cost to general fund of the total proposal after full implementation is $168 million per biennium. This could impact public sector workers and the critical services they provide.

Update from earlier Thursday is below ...
Late Wednesday evening, the legislative conference committee assembling the 2018 finance omnibus bill took up the provisions of the state government finance committees. While the conference committee has removed all of the anti-labor provisions from the bill, one major concern remains. The conference committee added in all of the MNIT language via an amendment prior to adopting all the additional language into the bill. The amendment includes moving MNIT under the MN Department of Administration and significant outsourcing of our state’s information technology. Enterprise software projects would be required to be outsourced unless a separate law appropriating money directs the state to design and build the project in-house. This will result in subcontracting for hundreds of projects each biennium that are currently done by hard-working MNIT staff. This legislation effectively requires that all IT projects be outsourced.

This legislation will also roll back the current IT consolidation in a manner that will create duplicative services and higher costs on things like help desk services, laptop/desktop services and require unnecessary management of duplicative contracts. The bill’s investment in IT security comes with no additional funding. This type of mandate will result in IT reductions, problematic challenges for employees and potential job cuts.

The pension reform bill has not been placed on the calendar for a House floor vote. The calendar has been determined through Saturday. The Legislature is required to adjourn by midnight on Sunday. We continue to meet with all our partners that have been supportive in this process to make this happen. This is the most critical piece of pension reform ever proposed in Minnesota. At this point, this bill will likely never be placed on the calendar and be brought up in the final hours if it will be considered.

Today, the constitutional amendment dedicating state general fund dollars to be used on roads and bridges will be voted on in the House. We expect the vote to pass. This will constitutionally dedicate $168 million from the general fund to roads and bridges leaving a $168 million budget gap in the state agencies each biennium into the future. This money is in addition to the $241 million already statutorily dedicated to roads and bridges. This could impact all state agencies funding for the foreseeable future. Right now, there has not been a definite signal from the Senate on what they plan to do once this passes the House later today.

May 16
Updates on several items in the final days before the Legislature adjourns.

The conference committee on Senate File 3656, the omnibus supplemental finance bill, began reconciling differences between the House and Senate positions.

As of late Tuesday evening, the committee adopted compromise language for the agriculture, higher education, environment, transportation, jobs and economic development, housing, e-12 policy and finance, and health and human services articles. Articles yet to be considered are energy, public safety and state government finance. While there are no cuts to state agencies, the bill currently includes a modified version of the tip penalty language opposed by Gov. Mark Dayton, the DFL caucuses, and labor organizations across the state. The bill also funds very little of the governor's supplemental budget priorities.

The Ways and Means Committee met Monday morning to change the House budget resolution, restoring the $7 million originally cut from the State Government Finance Committee target. As the compromise language for state government omnibus supplemental bill has not been made public, we do not know if that means the money cut from agencies is restored, whether the MNIT outsourcing and reorganization provisions, or the anti-labor language from the Senate version of the article will be presented as agreed-upon language for the supplemental.

The House passed House File 4404, the $825 million capital investment bill on Monday. Projects include:

• $40 million for MN State system Higher Education Asset Preservation and Replacement.
• $30 million for DNR asset preservation.
• $18 million for DHS asset preservation and roof/HVAC repairs at St. Peter and Anoka treatment facilities.
• $10 million for veterans asset preservation and $41 million for three new veterans’ homes.
• $20 million for corrections asset preservation, with an additional $2.7 million for St. Cloud interior perimeter fence.

The Senate is expected to take up the bonding bill Wednesday.

The pension reform bill, Senate File 2620, passed the State Government Finance Committee Friday morning, and the Ways and Means Committee Monday. It now awaits action on the House floor. If passed, it has to go back to the Senate for a concurrence vote to agree to the changes made in state government finance.

A proposal to constitutionally dedicate more auto-related sales taxes revenue exclusively for new road and bridge projects is scheduled for the House floor Thursday. The bill will permanently divert $168 million from the general fund, potentially resulting in cuts to state agencies and the essential services they provide.

The Legislature must adjourn sine die by midnight Monday. However, all legislation must pass by midnight Sunday.