Rep. Tina Liebling: Legislative Update (3/4/08)

03/04/2008

March 04, 2008

Dear Friends,

Greetings from St. Paul, where the legislative session continues at a frantic pace.

Last week's big news was the dramatic override of the governor's transportation veto. The final vote in favor of an override (91, including 6 Republicans) demonstrates the compromise represented by this bill. Much credit is due to the Minnesota Chamber of Commerce--usually a staunch supporter of the governor--who worked on the final bill and encouraged Republican members to support it. Why did they vote against the governor? Because the Chamber's members are business people who need a decent transportation infrastructure to survive and thrive. Our roads and bridges can finally be properly maintained so that we won't have to fear for our safety whenever we cross a bridge.

Budget forecast

An updated budget forecast was released by the Department of Finance last week and the news was not good. The nation's economic problems are hitting Minnesota. A weakening economy, reduced revenues, a slowdown in the housing sector and the recent credit crunch are all factors in the deficit. Officials said that they expect a recession for the first half of 2008 followed by slight improvements resulting from the federal stimulus package. The long-term outlook is still uncertain.

The forecast revealed a dramatic drop in the state's single largest source of revenue: individual income tax receipts. There is an estimated $313 million shortfall in individual income tax which accounts for 33% of the state's $935 million deficit.

Minnesota's constitution requires us to balance our budget every year. This gives us several options: cut spending, raise taxes, use the state's reserves, or a combination of these. In 2003 the state had a large deficit, which was handled through budget cuts and payment shifts. The impact of that strategy is still being felt. Tax changes made since 2001 give tax breaks to wealthier Minnesotans while increasing the burden on people at middle and lower income levels. Clearly, the strategy of "trickle down" economics has not worked. Minnesota's successful formula of investment in our people and our infrastructure made us an economic success but the "get it for nothing" strategy of recent years has hurt us. As we try to make up the $935 million deficit we will work for a balanced solution that is fair to everyone.

Bonding Bill

This week's big news is the unveiling of the House Bonding Bill.

The State Legislature works on a two-year cycle: in the first year the main goal is to pass a two-year budget and in the second year it is to pass a bonding bill. The bonding bill "borrows" money for investment in capital projects, which is separate from the ongoing budget. We are currently in a bonding year and are focused on passing a reasonable and responsible bonding bill to meet the states greatest project needs and get Minnesotans back to work.

The entire Rochester legislative delegation has worked hard to promote local projects that we believe are good for our region and the state. Included in the House bill is:

• $200,000 to begin the process of moving the Workforce Development Center to RCTC's Heintz Center
  
• $3.5 million to design the renovation and expansion of the Mayo Civic Center
  
• $4 million to upgrade the National Volleyball Center
  
• $3.655 million to build and equip the Olmsted County Regional Public Safety Training Center
  
• $500,000 to plan a rail corridor between Rochester and St. Paul
  
• $175,000 to dredge and restore Lake Zumbro
  
• $970,000 to construct the Chester Woods Trail
  
• $1.2 million to construct the Great River Ridge Trail
  

RCTC will also receive funding for general maintenance and renovation.

If the House passes this bill, a conference committee will be appointed to negotiate with the Senate and come up with a single bill. If both houses pass that subsequent bill, it will then go to the governor for his signature (or veto).

Don't be confused by those who say we should not invest in capital projects when the budget is in a downturn. While we do, of course, pay interest on the bonds, capital projects have little impact on our short-term budget.

Together the transportation bill and bonding bill will create over 40,000 new, good-paying jobs in the state. These jobs will help boost our economy and improve our economic picture.

Free Tax Preparation Information

I would also like to take this opportunity to remind you that there are many resources available to help with free tax preparation and e-file services. The Department of Revenue coordinates volunteers across the state to help prepare federal and state tax returns for senior citizens, disabled citizens, and individuals with an income of $30,000 or less ($40,000 or less for families). If you meet these criteria and need help filing your tax returns, or know somebody who does, I strongly encourage you to take advantage of this opportunity. To schedule an appointment for these free tax preparation services, please call (952) 933-9639 ext.211 or visit http://www.taxes.state.mn.us/vita/free_tax_prep.shtml.


It is a privilege to serve you in the Minnesota House of Representatives. As always, feel free to contact me with thoughts, concerns and suggestions. You can email me directly at or call me at (800) 339-9038 or (651) 296-0573. I look forward to hearing from you.

Warm regards,
Tina