5.2. ERMUSR 01-13-2009 - Laserfiche WebLink

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Attachment B Likely Issues - 2009 Minnesota Legislative Session The 2009 Minnesota Legislature will convene Jan. 6. As a result of November elections, the DFL party increased its majority in the House of Representatives by two seats (87-47) and in the Senate by one seat (46-21). The state's budget deficit, and how to deal with it, is expected to dominate this session. The state faces a projected deficit of $4.8 billion for the FY2010-11 budget period beginning July 1, 2009. For the current fiscal year, a $426 million budget deficit exists. That amount will decrease to $271 million after Governor Pawlenty applies the $155 million saved in budget reserves. The Governor and legislative leaders have identified three funds with remaining FY2009 money that will be tapped to alleviate this year's shortfall. They are: K-12 education, higher education and local government assistance, or "LGA." The aid to cities and counties is part of the property tax aids and credits (along with aid to homeowners and renters) that make up a little more than 9 percent of the state budget. The state in late December is scheduled to distribute $242 million in city LGA and counties are scheduled to receive $102 million in county program aid. Gov. Pawlenty may use a process known as unallotment, where he is free to act without legislative approval, for the short-term budget fix if he and the legislative majority leaders cannot find agreement on cuts together. The Governor and minority leaders (Representative Seifert and Senator Senjem) have repeatedly called the budget problem an opportunity to shrink government that comes only once every fifty years or so. DFL leaders (Speaker Kelliher and Senator Pogemiller) say the shortfall should focus the state on creating jobs for Minnesotans using, particularly, federal stimulus dollars. The Governor has explained his philosophy toward using stimulus money to address the national economy, saying "don't use a credit card to pay off credit card. debt." Thus he has refused to lobby Congress for economic stimulus money for individual projects as some cities and counties have done. Some Republicans are calling for privatizing government functions and selling state assets instead. Key issues that MMUA may have to confront in the 2009 legislative session are summarized below. Cap and Trade. Many environmental groups and a number of legislators been supportive of the development of aMinnesota-specific Greenhouse Gas Cap and Trade program. In 2008, the legislature delayed work toward aMinnesota-specific cap and trade program and instead commissioned economic impact and governance studies to be based upon a report by the Midwest Governors Association (MGA) that will describe a regional cap and trade scheme design. The MGA report was expected this year but has been delayed until early to mid 2009.