Capitol Notepad, May 16, 2009

1:10 a.m. update: Well, the Capitol wireless Internet has excellent performance right now. Tonight’s meeting didn’t reach agreement on major items, and a new offer from the governor said: "House DFL K-12 shift level ($1.775 billion) / LGA, related items, $14 million in tax compliance and other agreed upon items / Mutually agreed upon higher education reductions / Additional spending reductions in signed budget bills. Several of these proposals were reflected in your 9:30 p.m. Saturday offer that is still being discussed in the Legislative Commission on Planning and Fiscal Policy at this time." We heard that the agriculture and veterans bill has some line-item vetoes. In testimony, MAPE talked about saving money through trimming the state management levels, as well as out-of-state travel. Rep. Mark Buesgens (R-Jordan) strolled into the LCPFP wearing really awesome aviator sunglasses, and it’s our deepest regret we did not manage to get a picture, but apparently he’s been sporting them all week, so there is still hope. The other major engine of late-night activity was the Legacy omnibus conference committee, a complex affair involving, yes, a tax that Minnesotans evidently really wanted. Now attached to this post are all the veto letters and items we’ve collected in the wee hours. For the overview, check the file "Governors Log 2009 (26)". Good night! (DF)

12:25 a.m. update: On a lighter note, after midnight the Speaker offered birthday wishes to Patrick Kelliher and noted that he’d played a key role in previous negotiations over text messaging (to which MMB commissioner Tom Hanson joked that now these could be twittered.) It’s also now AP reporter Martiga Lohn’s birthday (here’s her solid roundup of tonight’s action). Rep. Ann Lenczewski (DFL-Bloomington) talked about how high-income tax states are not chasing away job providers, and the discussion has been a bit generalized. Gov. Tim Pawlenty did some line-item vetoes on the bonding bill, including higher education buildings like the Bell Museum. [With Pawlenty’s massive proposed cut to higher education, it’s been the toughest day for the universities we’ve seen in a long time. $85 million was vetoed, MPR has the list. Mankato and St. Cloud civic centers also get the nix, as does the Bell Museum. We’ve also heard that E12 got through without any line-item vetoes, and agriculture and veterans is still getting waited upon, but should be OK. (DF)

11:45 p.m. update: The Legislative Commission on Planning and Fiscal Policy is focusing a bit on the fate of management-level positions and the inter-agency agreements from which GOP Gov. Tim Pawlenty draws much of his staffing brainpower (and in the view of the DFL, understates the fiscal impact of his operations). Speaker Margaret Kelliher is stressing that economists have explained how cuts would damage state-level economies, while MMB Commissioner Tom Hanson is saying that economists can be found on both sides of issues like this. Now the discussion has turned to the fundamentals of whether or not cuts hurt more than taxes. (DF)

11 p.m. update: "The big dogs are showing up now," jokes one legislator waiting around in the Legislative Commission on Planning and Fiscal Policy as a top House finance chair arrives. The Commission has a website with the various offers and counter-offers flying around. (DF)

10:05 p.m. update: The House is back in session, and SF707, a bill linking mental health services to 911 passed. Now SF1302/HF995 is up for technical modifications on foreclosures — it cleans up bits of foreclosure bills from last session. Rep. Karen Clark (DFL-Minneapolis) is saying that the Legislature has not really addressed the issue of foreclosures, and ought to get worked on more in the interim; she adds renters are getting hosed, in particular. The Legislative Commission on Planning and Fiscal Policy will be getting together again pretty soon, to present the next round of negotiations publicly. MPR’s Tom Scheck adds via Twitter that the latest DFL offer is: $1.75 billion shift, cut LGA $120 millon, cut state government $169 million, permanent revenue of $986 million, additional cuts in signed bills $52 million, and restoring GAMC. DFLers are apparently with the governor now. SF1302 continues to final passage with a green board. (DF)

9 p.m. update: The Senate has adjourned for tonight. The House is caucusing, and Tom Scheck said over Twitter that he heard from a lobbyist that House Democrats are caucusing about possibly offering medical marijuana on the House floor tomorrow or Monday — which, contrary to the view of law enforcement, would really be an effective way to treat a variety of maladies in an era that will seemingly feature far less public support for health care (my opinion). Gary Carlson from the League of Minnesota Cities explained that unallotments will make it very difficult, if not "impossible," to perform long-term fiscal planning at the city level. Rep. Tom Emmer (R-Delano) wants to see a plan, and the Legislative Commission on Planning and Fiscal Policy will adjourn for a half-hour or so, as the DFLers put together a counter-offer. Speaker Margaret Kelliher is talking about how evaluating the offers in public, via the committee today, which has helped everyone learn a lot about the impacts of the offers. (DF)

8:10 p.m. update: Rumors that the Senate was going to go into session at 8 p.m. appear to be greatly exaggerated. Legislative staffers describe the situation as fluid. House DFLers are caucusing before they make a move back to the floor. (CS)

7:30 p.m. update: The tax conference committee in G-15 of the Capitol is preparing to go into recess. The conferees are planning to travel upstairs to Room 112 as the Legislative Commission on Planning and Fiscal Policy shifts from health and human services to taxes. House Taxes Chairwoman Ann Lenczewski in the last half hour of conference debate has pressed the main property tax proposal that she and Rep. Paul Marquart unveiled in March. The proposal, which wasn’t included in the tax bill that was vetoed last weekend by Gov. Tim Pawlenty, would cut state aid to local governments and allow counties to impose a local option sales tax of one-half of 1 percent to fill in any resulting shortfall. Lenczewski is arguing the House position as an alternative to the 9.3 percent statewide property tax increase that she said will result from Pawlenty’s budget cuts. Senate Taxes Chairman Tom Bakk remained cool to the House property tax proposal because of the increased tax burden. (CS)

6:45 p.m. update: The Legislative Commission on Planning and Fiscal Policy has moved on to health and human services. The commission members are askingstate Department of Human Services Commissioner Cal Ludeman abouthowbudget cuts will affect poor anddisabled people on public health care programs. The commissionis also takingpublic testimony starting withrepresentatives from Minnesota Catholic Conference and ParkNicollet Health Services. Minnesota Hospital Association lobbyist Mary Krinkietestified that health care cuts could result in reduction of community mental health services and reduced dialysis services. She noted that widows that are younger than 65 who had received health insurance from their husbands often rely on general assistance medical care (GAMC). "It’s a group of people on GAMC that we don’t often talk about," Krinkie said. (CS)

6:15 p.m. update: A bit of good news: apparently the governor has signed the public safety omnibus finance bill, and the state government omnibus bill without any line item vetoes. Tom Hansen from MMB lauds the work of Rep. Phyllis Kahn (DFL-Minneapolis) and Sen. Don Betzold (DFL-Fridley) in getting things done. Now MnSCU chancellor James McCormick is explaining how MnSCU tuition hikes would come from these cuts, and explaining how MnSCU’s goal of providing access across the state might be threatened by cuts. The entire MnSCU budget reserve is about $50 million, across every account. (DF)

5:25 p.m. update: University of Minnesota President Robert Bruininks is explaining that the governor’s proposed cuts to higher education ($190 million) would have huge repercussions, with possible tuition hikes of 15% to 18%. Rep. Paul Kohls (R-Victoria) wonders if they have budget reserves, and Bruininks explains that all the units in the University are going to tap their budget reserves. DFL House Speaker Margaret Kelliher lauds his balanced approach of raising some revenue through tuition hikes, budget cuts and use of the one-time reserves. Earlier, the commissioners of Health and Human Services, Revenue and MMB explained the outlines of the governor’s offer. Download the governor’s offer here(PDF) . (DF)

4:50 p.m. update: The Legislative Commission on Planning and Fiscal Policy is meeting shortly in Capitol room 112. Many players have already arrived and the governor’s new proposal has arrived. This would "Close remaining $2.7B gap (after line item vetoes) by accepting House DFL level of education payment shift and additional spending reductions". The lines: "Accept House DFL K-12 Shift level $1.75b / Reduce LGA and related items $450m / Other items - Renters credit to apply no more than taxes paid (i.e. eliminate windfall) @ 50; political contribution refund @ 10; sustainable forest @ 5; PILT payment adjustment @ 8; taconite state aid @ 13; additional compliance @ 14 $100m / Additional HHS items to be negotiated with legislature including possible use of HCAF surplus for appropriate purposes $250M / Higher education reduction $190 m." Meeting now underway. (DF)

3 p.m. update: Urban, suburban and rural mayors told reporters at a Capitol newsconference that their budgets are still smarting fromGovernor Pawlenty’s 2008 unallotment.They’re telling lawmakers that further cuts would force another hit to their reserves and damage their cash flow and bond ratings. Speaking at the press conference were Apple Valley Mayor Mary Hamann-Roland, Alexandria Mayor Dan Ness, Floodwood Mayor Jeff Kletscher, Hutchinson Mayor Steve Cook and St. Paul Mayor Chris Coleman. Kletscher,who governs a small city on the St. Louis River between Duluth and Grand Rapids, said his four full-time employees waited until Monday to plow snow off the streets this winter to avoid paying overtime. "My tool box is empty. …We can’t afford to see tax rates go up," Kletscher said. The press conference was organized by the League of Minnesota Cities. (CS)

1:10 p.m. update: The House is in recess until 1:45 p.m. The Senate DFL is caucusing ahead of its 2 p.m. scheduled floor session. (CS)

12:55 p.m. update: House and Senate GOP leaders just wrapped their pressbriefing in front of the governor’s office. House Minority Leader Marty Seifert said the 47 members of his caucus will sustain Governor Pawlenty’s vetos if DFLers attempt an override. In particular, he said the caucus would stand firm on the vetoed tax bill and the line-item veto of general assistance medicalcare (GAMC) in the human services budget bill. "We’re solid on the veto override. We’ve talked about it ad nauseum. …If they’re interested in the GAMC line-item, bring it up," Seifert said. Seifert also said he will wait to see the details of Pawlenty’s proposed $1.2 billion in cuts due this afternoon before he passes judgment. (CS)

12:30 p.m. update: DFL legislative leaders tolda throng of reporters gathered outside the governor’s officethat Governor Pawlenty will soon be proposing more budget cuts. Majority Leader Pogemiller said he’s not certain that the state Constitution allows Pawlenty to unallot the state budgetin the mannerhe proposed to do on Thursday. "I think (Pawlenty) has overstated his authority and we will see," Pogemiller said. (CS)

12:15 p.m. update: House Speaker Margaret Anderson Kelliher and Senate Majority Leader Larry Pogemiller just emerged from an hour-and-10-minute-long meeting with Gov. Tim Pawlenty. The leaders are now taking questions from media outside the governor’s office. (CS)

Floor session:

The House goes into session at noon. The Rules and Legislative Administration Committee will meet shortly before session in Room 118 of the Capitol. The panel will discuss today’s calender and parameters for floor debate. (CS)

The Senate goes into session at 2 p.m. (CS)

Conference committees:

A couple of conference committees are scheduled to get underway at 11 a.m. The Department of Human Services child welfare bill (HF 1709/SF 1503) meets in Room 125 of the Capitol. The breach of insurance policy damages and attorney fees (HF 417/SF 528) conference committee meets in Room 229 of the Capitol. The health care and human services omnibus policy bill (HF 1760/SF 1526) meets in Room 112 of the Capitol. Also, the LCCMR conferees will meet sometime today to discuss House and Senate differences on SF 1012. The tax conferees are also scheduled to meet on today’s agenda (HF 2323). (CS)

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said late last night that the Legislative Commission on Planning and Fiscal Policy will likely meet sometime today. (CS)

Today’s coverage by Charley Shaw (CS) and Dan Feidt (DF).