Sen. Hoffman Update: January 27, 2017

Greetings,

Governor Dayton kicked things off with his State of the State address on Monday and touched on broad themes including Minnesota’s strong economy and job creation. He also touched on those Minnesotans who are still struggling to make ends meet. We received news that he is undergoing prostate cancer treatment. Our thoughts and prayers are with him.

Governor Dayton released his two-year budget on Tuesday where he emphasized property tax relief for farmers to tripling the tax credit for child care. Middle class citizens were the focus on his relief efforts.

Finally, on Thursday, the Senate passed health insurance premium relief for 125,000 Minnesotans affected by the increase in premiums in the individual insurance market. The DFL and Governor Dayton held strong to their convictions that relief delayed is relief denied. The compromise agreement passed this week gets relief checks to Minnesotans by the end of April.

What is happening at the Legislature?

Minnesota Governor Mark Dayton gives his annual State of the State Address in the House Chambers of the State Capitol in St. Paul, Monday, January 23, 2017. (Pioneer Press: Scott Takushi)

Governor’s State of the State

On Monday, January 23 Gov. Dayton gave his State of the State Address to the joint convention of the House and Senate. His address began with a reminder to Minnesotans of the promises he’d made six years ago during his inaugural speech which emphasized a balanced budget and job growth as his top priorities.

Today, Gov. Dayton, with the help of the DFL Senate, has kept their promise to clean up the state’s financial mess by turning a $6 billion deficit in 2011 into a projected surplus of $1.4 billion. Minnesota also has a $2 billion rainy day fund to protect the state against future economic downturns.

The governor also noted when he took office six years ago, 202,000 Minnesotans were unemployed and the unemployment rate was 6.9%. Since then, the state has added 255,000 jobs and unemployment is now below 4%.

The state of the state is strong and the governor vowed he will work to continue “our state’s economic prudence.” However, as good as the news is, not everyone is sharing in the economic successes. There are many Minnesotans who continue to struggle and that economic disparity provides an uncertain future for many. With this in mind, the Governor outlined some of his priorities for the next two years:

  • Education: The governor wants to continue his strong commitment to education with increases in per pupil spending, support in funding for child care, pre-kindergarten, and higher education.
  • Transportation: After he thanked the Senate DFL for trying to pass sustainable transportation funding, Gov. Dayton labeled Minnesota’s transportation deficiencies as “urgent.” Gov. Dayton said we need to invest in state highway projects and road and bridge improvements. He emphasized he is willing to work with legislators to find a real solution most of us can accept. He also reiterated that doing these projects will be costly, but it would be far costlier to ignore them.
  • Health Care: The Governor wants to preserve important parts of the Affordable Care Act, such as letting parents cover adult children up to age 26 and requiring insurers to accept people with pre-existing conditions. He also praised the improvements in MNsure and said more work needs to be done to ensure those who faced drastic increases in premiums will not be faced with rising costs in the future.
    • Dayton also provided a vision for a public health-insurance option. In a prepared statement, the governor’s public option plan indicated that health insurance coverage would be available to Minnesotans who earn between 201% and 400% of the federal poverty level. For a family of four, qualifying household income would be between $49,200 and $97,200 annually.
  • Clean Water: Clean water will continue to be a priority for this administration. He called out a proposed tax provision to help local governments and farmers with the new buffer law and hinted at including water-treatment projects in rural Minnesota as a priority.

About 40 minutes into the governor’s speech, his State of the State address was cut short due to a brief fainting spell. He was able to stand on his own after several minutes and was able to walk from the House Chamber. The Governor was checked out and is okay. He was able to release his budget recommendations on Tuesday, Jan. 24.

Governor Dayton Unveils his Budget

MinnesotaCare has long been a nation-leading example of quality, affordable healthcare unique to Minnesota. It is a partially subsidized plan available to Minnesotans who earn between 133% and 200% of the Federal Poverty Guidelines (FPG), or $32,398 to $48,600 for a family of four.

Due to rising insurance premiums and the limited number of participating health plans on the individual market across the state, Minnesotans with incomes too high to qualify for MNCare need more affordable and accessible health insurance options. Part of the Governor’s budget proposal would allow Minnesotans to purchase MNCare plans statewide regardless of their income. Plans would be available through the MNsure website. Minnesotans with incomes between 200% and 400% of FPG would still be eligible for discounted rates with federal tax credits. For Minnesotans with incomes over 400% of FPG, the average statewide premium would be approximately $469 per month—more than 12% less than the average statewide premium currently available on the individual market.

Ultimately, the proposal would increase choices, encourage competition in the marketplace, and ensure that all Minnesotans have access to affordable insurance with a comprehensive network of health care providers. The one-time startup cost of $12.9 million is funded entirely by premiums paid by Minnesotans who choose to buy MNCare coverage. If the Legislature approved this plan by April 1, Minnesotans could begin to purchase MNCare plans during the 2018 open enrollment period.

Senate Passes Premium Relief Bill

 

This week the Senate voted on the Premium Relief Conference Committee Report. The bill as passed will provide immediate relief to Minnesotans who are struggling with increased health insurance premiums. The bill, now signed by the Governor, will reduce 2017 health insurance premiums by 25% for Minnesotans, regardless of their income, who purchase their insurance on the individual market and do not receive federal tax credits.

Minnesotans eligible for the subsidy would see immediate premium relief on their insurance bill from the health plans and the health plans would be reimbursed by the Department of Management and Budget. This plan would reduce the average premium increase facing Minnesotans in the individual market from 55% to 16%, and some families could save as much as $594 per month on their premiums.

Under the bill, the health plans are required to implement the subsidy program no later than April 30, 2017, and the 25% subsidy is retroactive to January 2017. The 2017 subsidy program will take the health plans approximately six to eight weeks to implement, so Minnesotans eligible for the subsidy would begin to see the discounted rate on their April or May premium bills.

The bill appropriates $312 million from the budget reserve account to the general fund for the premium assistance payments and $157,000 is appropriated to the Office of the Legislative Auditor for the purposes of auditing the premium assistance program.

Additionally, the bill includes several health insurance market reforms. One reform measure that is the most troubling to many DFL senators is a provision to allow for-profit HMOs to operate in Minnesota. This drastic change could have significant impacts for rural and smaller hospitals and medical providers. For-profit HMOs exist to make a profit for their shareholders, while looking out for the best interests of their members comes second.

Senate DFLers Oppose Education Voucher Bill

Legislation to divert more than $70 million in public money to private and religious schools was heard in the Education Policy Committee on January 24.  The bill was referred to the Education Finance Committee on a 5-4 vote, with all DFL senators voting against.

The bill will expand the current Minnesota education tax credit, which passed in 1997, to include private school tuition. It also sets up an “Equity and Opportunity in Education Tax Credit” to organizations and individuals that donate to non-profit groups who provide private school scholarships. The bill would allow individuals and companies to make donations to non-profit organizations who would then provide the funds to help families cover private school tuition.

This proposal is especially concerning because private schools do not have any requirement to admit all children. It is especially troubling when I hear that private schools turn away students with disabilities because they are not equipped to accommodate them. I asked for assurances under section 504 of the rehabilitation act and couldn’t get any answers. I have many concerns with this type of policy changes.

The bill also contains an inflation factor which would allow the amount of the credits to increase over time without legislative approval. The GOP in the past has strongly opposed putting inflation on automatic pilot.

The bill mimics legislation written by the conservative American Legislative Exchange Council. At the hearing on Tuesday, nine people, including teachers and parents, voiced opposition to the bill, citing lack of funding for Minnesota schools and increasing special education costs. A testifier from the Minnesota Rural Education Association expressed to legislators not to siphon public dollars away from public schools, saying that local schools are the center of many rural communities. I will continue to express my concerns to this bad policy.

No hearing has been set for the bill in Education Finance Committee. S.F.256

My Bills

SF 350 – Dustin Luke Shields Act

This week I introduced SF 350, known as the Dustin Luke Shields Act. This would strengthen lead testing and disclosure requirements for landlords and home sellers in buildings built before 1978. This bill would require landlords and sellers to disclose any lead testing conducted in the home. The bill also offers a tax credit for homeowners and landlords for lead abatement projects. Lead from paint, paint chips, and dust can pose a hazard in older homes. Children and pregnant women are at highest risk. This bill aims to protect public safety of Minnesotans by making our homes safer. 

SF 85 – Shutting down Sherco 1 & 2

I am a co-author (I was the chief author last biennium) for a bill that would build a new natural gas power plant in Becker, Minnesota that would result in the closing of two coal power plants.

I believe that we need to be positive stewards of the planet. That is why I support the efforts of Xcel Energy and our other utilities as they work to transition their generation fleet away from older energy sources and work to bring on more and more renewable energy. Xcel Energy’s decision to close two older coal plants in Becker and replace that energy with some natural-gas fired generation and more renewable energy is a key part of their plan to cut their carbon emissions by 60% by 2030.

A concern people have had is that Xcel energy is going around the process of the Public Utilities Commission. There have been many examples of the legislature making resource decisions for utilities and not going through the process of the Public Utilities Commission. Here is a complete list of these decisions.

  • 825MW of wind (1994)
  • 225MW of closed-loop biomass (1994)
  • Metropolitan Emissions Reduction Projects (2001): High Bridge and Riverside coal plants repowered with natural gas. Black Dog coal plant repowered with natural gas
  • 300 additional MW of wind, of which 100 MW are systems of 2MW or less, and distributed geographically throughout the state (2003)
  • 10-20 MW of biomass at an all-inclusive price not to exceed $55/MWh (2003)
  • Reduce biomass from 125MW to 110MW, and the PUC shall approve a 35MW contract with a facility that uses short-rotation, woody crops as its primary fuel (2003)
  • 2% must come from an ‘innovative energy project’ that uses gasified coal if it’s likely to be a least cost resource CBED tariffs – utilities must offer them (Community-based energy developments) (2005)    
  • 30% renewables by 2020, of which 24% must be wind, 1% solar and 5% biomass (2007)
  • 1.5% solar energy standard (2013)
  • 10% of the 1.5% solar standard must be projects smaller than 20 kilowatts
  • Unlimited amount of energy produced by community solar gardens (2013)
  • HF 4029 (2016)

There have been some concerns that the cost of the new plant, $800 million, would be pushed onto consumers. Consumer protections are of vital importance to me. Minnesota’s regulatory system of monopoly service territories is designed specifically with consumers in mind. It helps ensure costly infrastructure is not duplicated and provides thorough oversight of the costs charged by utilities to their consumers. All of the regulatory oversight entrusted to the Public Utility Commission by the Legislature remains intact in this bill. I would not support SF 85 if any of these consumer protections were to be eliminated or if this bill became a “blank check” for the utility.

Final Thoughts

I hope you find this weeks update useful. I would like to invite you to share your thoughts with me – I will be putting together a Senate District survey for next week.

If you have any questions or concerns feel free to call my office at 651-296-4154 or by e-mail at jhoffman@senate.mn