Capitol Update 8 2015

February Forecast:
Among the top stories this week is the release of the February Forecast. For those of you who arent
familiar with this, the February Forecast is an economic update on the States budget. The release of this
information dictates the scope of budget initiatives for the biennium. As many of you may have read, this
Forecast revealed that Minnesotas current surplus balance is approximately $1.9 billion. This is nearly $832
million more than the Office of Management and Budget had previously forecast. The difference is
attributed to economic growth, low oil prices and the rising value of the dollar, as well as higher than
predicted individual income and sales tax revenue and lower spending in key budget areas.
The news reflects a robust economic recovery and a strong financial picture. Minnesota seems to have
weathered the recession and is back on solid ground. While this does allow for some strategic investments,
I believe it is more important than ever to be cautious and conservative with this surplus.
It is appropriate to make strategic investments in critical areas of the budget, such as Education and
Transportation. In addition, as I shared with you last week, I believe that we can begin to make reforms to
our tax code. One thing that is important to keep in mind is that last biennium, the Legislature passed a law
which requires us to put away 1/3 of our balance into a reserve account to be used if Minnesota finds
ourselves back in an economic downturn. This newly enacted statute required this to be done each
November, so while it isnt required at this time it may be the prudent thing to do.
You can find the complete details of the February Forecast here.

Deficiency Bill:
This week, the Legislature took up the final version of the Deficiency bill. As you remember, this
legislation was caught up in controversy as it came on the heels of the Governor announcing pay raises
for his Agency Commissioners. What many dont realize is that the meat of this bill was paying back
hospitals who incurred costs as a result of responding to the Ebola crisis and to St. Peters Hospital,
which has been experiencing significant difficulties in managing their patient population. The pay raise
controversy did spark an important conversation, but ultimately overshadowed the critical aspects of
the bill.
The compromise that was struck involved the Legislature taking back the authority to set salary
changes for agency officials (which we approved last biennium), but gives the Governor one day to act
on pay increases in July. The conversation on the specifics of the raises is not over and Senator Bakk has
promised that the Legislature will be holding informational hearings throughout Session so that all
parties can weigh in.

Career Counseling:
Recent reports have shown that Minnesota High Schools are in the bottom of the nation in
ratios of counselors to students. On top of this, our counselors are having to take on ever
increasing challenges that students are facing at home. This leaves them little capacity to
engage in career advice and pathway discussions with students. On the other hand,
Minnesota is fortunate to have nearly 50 Workforce Centers around the State that have staff
with readily available access to job data and connections to local businesses.
Last biennium, I authored a pilot project for four areas of the State to have our Workforce
Center career counselors come into the local High Schools and provide career advice, job
information and support. The reports from the pilots are in and the initiative was a huge
success. Career counselors are working hand-in-hand with the guidance counselors in the
High Schools. Together, this dual-approach to counseling offers our students well-rounded
supported for personal and professional advice. The pilot was such a success that areas of
the State not included in the pilot asked to join.
This Session, I have introduced a bill to bring the pilot to scale. It was heard (and passed) in
two committees this week and I am hopeful that it will make it to the final budget
discussions and negotiations.

With all of the conversation

relating to future workforce
needs and developing STEM
education, it is important to
remember the role that the Arts
play in our lives. Some have
proposed including arts in STEM
and changing it to STEAM. Here,
Senator Bonoff shows her
support during Arts Advocacy
Day on the Hill.