Policy Architects

The Minnesota Policy Blueprints exerts wide and deep influence in the deliberations of the 2015 legislature.

Last summer and fall, American Experiment developed The Minnesota Policy Blueprint: Prescription for Prosperity, a set of wide-ranging policy recommendations for state lawmakers that it published as a book in the early days of the 2015 legislative session.

“This is a long-term project,” said Peter Nelson, the Center’s director of public policy, who edited the book. “It will take more than a few legislative sessions before the Center’s recommendations are fully debated, let alone passed into law. That said, we’re pleased that lawmakers gave serious consideration to a large number of policies that conformed with our recommendations.”

Here are the highlights from the legislative session:

Taxes: 

Since the House and the Senate could not come to agreement on a tax bill, the session ended without reducing taxes, despite a $2 billion surplus. However, lawmakers left over $1 billionunspent which will be available for tax relief next year. Two important Blueprint recommendations were adopted in the House omnibus tax bill. It raised the estate tax exemption to the federal amount and phased out the statewide property tax on business and recreational property. Importantly, these issues also received favorable treatment from some DFLers in the Senate.

Transportation and Metropolitan Council: 

Light rail did not receive any state funds and the metro area tax for transit failed to pass. This comes on the heels of the news that Southwest light rail is going to cost $2 billion, a development that caused an uproar near the end of session. As the Center’s recent poll reported, Minnesotan’s want roads and bridges funded with existing tax revenues, not new taxes. This is exactly what the Blueprint recommends and the position the House continues to hold. There were not any substantial changes to the Met Council, but the House formed a new subcommittee on the Met Council which began hearings that will continue over the summer. A number of House bills already passed in committee follow Blueprint recommendations to give local elected officials and the legislature more control over the Met Council.

Education:

The House tax bill would have also increased the current education tax credit and allowed it to be applied to tuition for private schools, an important element of the Blueprint’s school choice recommendations. Again, no agreement was reached on a tax bill and so the education tax credit remains as is. A number of other important bills to promote school choice were discussed or heard in committee but were not included in a final agreement. While the governor has already vetoed the education bill, which raised spending $400 million, the House and the Senate did agree to improve teacher licensure to give a level of reciprocity to teachers who have earned licenses in different states. They also agreed to increase funding for preschool scholarships by $30 million—a recent example of how private school choice can work—and provided for an additional $30 million for school readiness, compared to Governor Dayton’s demand to push all four-year olds into public schools.

Healthcare: 

The House health and human services bill largely followed the Blueprint’s recommendation to convert MinnesotaCare (the state’s public health care program for working adults and families) into a premium subsidy program that empowers enrollees to afford individual health insurance. Though this conversion did not find agreement in the Senate, provisions to increase cost sharing in MinnesotaCare making enrollees more responsible for their care were signed into law. There was also an agreement to allow people to purchase health insurance outside MNsure with tax credits through a federal waiver, which is an important first step to bring more options and flexibility to the health insurance market. Additionally, a bill to allow employers to fund individually-owned and portable health plans, a lead Blueprint recommendation, was introduced with bipartisan support in both the House and the Senate.

Energy: 

A number of Blueprint recommendations were passed by the House, including provisions to dramatically improve the state’s energy efficiency program and renewable energy standard. These provisions were removed in conference committee and, in the end, the governor vetoed the entire bill.

Pensions: 

Some progress, however small, was made to improve the current defined benefit pension plans by, as the Blueprint recommends, using more realistic assumptions for pension math. With the exception of the Teachers Retirement Association, pension funds adopted a new, more realistic assumed rate of return of 8.0 percent. While this assumption, also used to calculate unfunded liabilities, is still indefensible, it is a move in the right direction. But it is just a Band-Aid. Pensions will continue posing a financial threat to the state until they fully fund their promises and move to a defined contribution model.

State Spending: 

The budget grows by about $500 million over the base spending level, which is about $1 billion more than the House proposed and $1 billion less than the Senate and governor proposed. Any increase in spending is too much, considering the state’s already high tax burden. However, one bright spot is that spending on health and human services is reduced by $300 million. The Blueprint’s recommendation to adopt a Legislative Budget Office to estimate spending and revenue impacts of proposed legislation received a strong endorsement from both Senate Majority Leader Tom Bakk and Speaker of the House Kurt Daudt. Though their bills never became law, there may still be opportunities to implement the policy on a smaller scale without it.

“The Blueprint became a great resource for lawmakers this session,” said Kim Crockett, the Center’s executive vice president. “Whenever we visited the Capitol, we would see individual chapters, the Summary, and copies of the book in offices and conference rooms. More importantly, our ideas appeared in dozens of bills proposed during the session. We were thanked over and over for providing research and ideas—and asked for lots of copies for members during the session.”