March 2019 – MACVB Lobbyist, Todd Hill/Hill Capitol Strategies

March brings us closer to the mid-point of the 2019 Legislative Session and the start of Legislative Deadlines. The First Policy Deadline arrived Friday, March 15th.  At that point, policy bills must have cleared all policy committees in either the House or Senate.  Unlike previous sessions where the Second Policy Deadline followed the week after the first, this year Leadership has provided two weeks between the First and Second Deadlines.  On March 29th, policy committees will complete their work for the 2019 Session and all policy bills need to have cleared policy committees in both bodies.  At that point, finance committees will have until midnight, April 12th to complete their work.  The Legislature will begin their Easter/Passover Break on April 13th – and will return on April 23rd.  To limit the crush of floor activity after the break, the House and Senate are hoping to process a handful of smaller appropriation bill before the recess.

Legislative Leaders and the Governor announced an additional set of Legislative Deadlines, these new deadlines are unique to the 2019 Session.  Leaders and the Governor hope these additional dates will bring greater transparency to the session ending negotiations. 

                May 1st.               All budget bills passed from floors and conference committees appointed

                May 6th               Budget Targets set for Conference Committees, agreed upon by the Governor and Legislative Leadership

                May 13th             Budget Conference Committee Reports returned to floors of House and Senate for final action

This week, the Senate Tax Committee heard the handful of local lodging tax bills heard in the House a few weeks ago.  Those bills were laid over for possible inclusion in the Senate Tax Bill.  It is likely we will know whether the House and Senate Tax Bills will contain any of these local proposals before they leave on recess. 

The Governor’s budget proposal became more challenging with the release of the February Budget and Economic Forecast.  The latest forecast projects the $1.5 billion surplus announced in November, has shrunk by $492 million.  A slowdown in economic growth and lower than expected revenue collections leaves $1.052 billion in surplus funds for the next biennium.  While corporate tax collections are expected to exceed projections by $130 million in the current biennium and $262 million in the 20-21 biennium, income taxes look to have a sharp decline of $403 million in the current biennium and $571 million in the next.  More concerning is the projected $11 million deficit in the 2022-2023 biennium.  Minnesota law prohibits the inclusion of inflation in spending but not revenue in budget forecasts, if inflation was included, Minnesota spending would increase by $1.097 billion in 2021-2022 and $2.694 billion in 2022-2023 leaving a large hole in the out-year biennium.

Governor Walz’s budget did not include the Minnesota Tourism Growth Council proposal to increase Explore Minnesota’s base budget, his initial budget did provide for the increase in the grant program funding.  However, the Governor’s Supplemental Budget released last week lined out the $2 million for the grant program.  We will continue to advocate for increased tourism funding in both the House and Senate budget proposals.

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