February 28, 2008

New Budget Forecast Released: $935 Million Shortfall

Commissioner Tom Hanson recently released the February budget forecast report. The forecast projects a $935 million shortfall for the current budget period. This shortfall is up significantly from the $373 million projected in November. Looking at the next two-year budget, the forecast predicts a $1.086 billion deficit.

For more information and to view the forecast, click here.

House Discusses Two Sales Tax Expansion Proposals

Earlier this week, the House Taxes Committee discussed proposals that would expand the sales tax to clothing. One of the proposals discussed, HF 2551 was laid over for possible inclusion in a tentative fourth omnibus tax bill. The second proposal, HF 2163, would not only expand the sales tax to clothing, but to some legal, repair, financial, funeral, and salon services, as well as tattoo and body piercing. HF 2163 will likely be discussed at upcoming Committee hearings.

State estimates suggest expanding the sales tax to clothing would bring in about $400 million in additional revenue , but both proposals would use the revenue to reduce the overall sales tax rate and create a clothing sales tax credit for low-income filers. During the hearing, Chairwoman Ann Lenczewski (DFL-Bloomington) suggested discussion continue after the budget forecast was released.

House Committee Approves Venture Capital Proposal

The House Biosciences and Emerging Technology Committee recently approved a bill that asks the State Board of Investment to provide more startup capital to newer, smaller companies — particularly in high-tech fields like bioscience. Specifically, HF 3142 asks the board to “attempt to ensure” that at least 1 percent of its private equity investments are in venture capital businesses with a majority of their employees in Minnesota. The bill next hearing is with the House Governmental Operations, Reform, Technology and Elections Committee.

To view the House Research summary of this proposal, click here.

Senate Removes Carol Molnau as Transportation Commissioner

The Minnesota Senate voted (44-22) to remove Commissioner Carol Molnau from her position within the Minnesota Department of Transportation. She will continue in her position as Lt. Governor. Governor Tim Pawlenty announced that he appointed Bob McFarlin (previously assistant to the Commissioner for MnDOT) as acting Commissioner of the Department.

Other News from the State Legislature
(provided by MN Legislature)

Energy
A House division laid over a bill that would tighten energy efficiency guidelines for state buildings. To view more, click here.

Local Government
A bill establishing a taxable district within St. Louis County is on its way to the House Taxes Committee. To view more, click here.

Two bills that would allow counties to make positions appointed rather than elected are on their way to the House floor. To view more, click here.

Public Safety
A bill to change the regulation of dangerous dogs continues to inch its way toward the House floor. To view more, click here.

Education
A bill to add state academic growth-based measures to the Minnesota school report card received committee approval. To view more, click here.

Elections
A bill to amend the state constitution and reform the judicial selection process passed its first legislative hurdle. To view more, click here.

Environment
Members of a House division questioned a state agency’s proposal to clean up a contaminated landfill site. To view more, click here.

The Board of Water and Soil Resources received another failing grade from the legislative auditor. To view more, click here.

For answers to questions or to provide comments,
call (612) 370-9100 or visit the website at www.minneapolischamber.org
info@minneapolischamber.org