Leadership in Minnesota House and Senate Propose Creating a Legislative Budget Office

If you had asked us which of the many proposals in the Minnesota Policy Blueprint would be taken up by bipartisan leadership in both the House and the Senate, we probably would not have picked our proposal for a legislative budget office (LBO).  Yet, on Monday the leadership offered HF 1281 (Daudt, co-authored by Peppin) and SF 1304 (Bakk), which, very much in line with our LBO proposal, creates the office for the purposes of offering fiscal notes.

A fiscal note determines the effect of a bill on the expenditures and revenues of state government from any legislative change.  Current law says this is to be done by department and agency heads in the executive branch (who are appointed by the governor.)  Such notes are to look both at short- and long-run costs.

One of us (Banaian) offered a similar LBO bill in 2012.  Both bills envision an LBO as also providing notes on the impact of state legislation on local government.  An LBO could uncover the hidden, unfunded mandates in bills our legislators offer.  The 2012 proposal went a little further and required the LBO to also review revenue estimates and prepare budget forecasts.  We would also like an LBO to evaluate the performance of public programs, but those functions are secondary to creating fiscal notes.

As we argued last year, moving the fiscal note process back into the Legislature improves the efficiency of our government by not allowing agencies who dislike a piece of legislation to derail it by assigning high, unreasonable costs to it.  Just last week at the last moment before passage, a fiscal note was presented to the teacher licensure bill in the House (HF 2) which delayed its passage.  The note’s argument?  Having to develop different teacher licensing processes meant Department of Education would need more staff. 

This “death by fiscal note” has been a recurring problem in the Legislature, and it is unwise for the body to cede control of the fiscal analysis of bills to the Executive branch.  We hope that the bipartisanship shown by the Speaker and Senate Majority Leader in HF 1281/SF 1304 is furthered in the bill’s passage.