Married couples filing jointly will pay less in taxes, research in biosciences will get a boost and critical state programs including sex offender lock-ups will receive needed funding as part of the supplemental budget and tax relief bills signed by Governor Tim Pawlenty today.
The supplemental budget bill encompasses most of the spending provisions passed during the 2006 legislative session. It provides approximately $203 million for critical needs and key initiatives. A related omnibus tax bill provides approximately $202 million in tax relief. The $405 million in surplus general fund resources is available due to better than expected revenue collections since the current budget was enacted last July.
“With the state budget back in the black, we made some key investments and at the same time cut taxes for hundreds of thousands of Minnesotans,” Governor Pawlenty said.
The Governor also line-item vetoed three provisions in the budget bill totaling approximately $1.05 million.
The budget bill funds priorities for public safety, education, economic development, and the environment. The tax bill reduces the Alternative Minimum Tax (AMT) burden and eliminates the marriage penalty for 419,000 Minnesota married couples.
Supplemental Budget highlights
Among the $203 million in spending, $98.8 million funds emergency items identified by Governor Pawlenty in his supplemental budget recommendations:
• $33.7 million to fund sex offender commitment growth.
• $31 million to manage mentally ill and dangerous population growth.
• $14.6 million in projected salary shortfall in Human Services State Operated Services.
• $13.3 million to Minnesota prisons and probation officers to cover salary shortfalls.
• $6.2 million to state veterans homes for operating budget shortfalls and to improve quality and care standards.
Tax Relief highlights
Tax reductions total $93 million in FY 2007 and an estimated $202 million over three years:
• $28.7 million to eliminate the “marriage penalty” for married couples filing jointly and conform Minnesota to federal law. The change will affect about 419,300 married couples and provide an average tax decrease per filer of about $74.
• $23.8 million to reduce alternative minimum tax liability for 44,300 Minnesotans with an average $540 tax reduction.
• $8.1 million for income tax credits for those who have performed active military service after September 11, 2001.
• $7 million reduction in state tax collections, conforming to 2005 federal tax changes.
• Paid back $22.6 million of the June Sales Tax Acceleration, reducing the percentage retailers prepay from 85 percent to 78 percent.
Additional highlights of the supplemental budget bill
Economic Development
• $15 million for collaborative research projects in biotechnology and genomics by the University of Minnesota and the Mayo Clinic at their joint Rochester facility
• $11.5 million for infrastructure needed for a new steel mill planned in Itasca County
• $3 million for jobs and training programs for at-risk youth
Higher Education
• $16.3 million for new higher education programs at the University of Minnesota Rochester in biomedical, engineering and computer technologies, as well as health care administration and allied health
K-12 and Early Childhood
• $3.5 million in one-time energy assistance to school districts
• $15 million to improve and reform early childhood programs
• $1 million to enhance the Advanced Placement program
• $1.3 million for adult literacy grants for intensive English education for immigrants and an additional $1 million for Adult Basic Education
Public Safety
• $1 million to create a child pornography investigative unit at the Bureau of Criminal Apprehension to assist law enforcement throughout the state
• $800,000 to expand operations of the gang strike force and narcotics task forces
• $1.5 million to place additional peace officers in downtown Minneapolis
Environment and Agriculture
• $15 million for Clean Water Legacy, an initiative to clean up and improve waters in Minnesota to ensure a vibrant economy and to protect the environment
• $1.8 million to control invasive species and animal diseases
• $400,000 to operate campgrounds scheduled for closure by the U.S. Army Corps of Engineers
Health and Human Services
• $1.3 million to strengthen mental health programs by developing crisis response services, a web-based system to track availability of mental health services, and to identify most successful treatment services.
• $5 million for updating and strengthening the state’s public health response to a potential Bird Flu outbreak
Other Programs
• $4 million to expand support for military personnel and veterans through the State Soldiers Assistance program, coordination with county veterans’ service officers, and programming that helps veterans pursue educational goals
• $1.9 million to improve state information technology security
Governor Pawlenty also vetoed three provisions within the supplemental budget bill:
• A $1,000,000 grant for the NorthStar Quality Improvement and Rating system. “The appropriation for the NorthStar Quality Improvement and Rating System has been line-item vetoed. This system considers input driven indicators, rather than measuring meaningful outcomes. For the past ten years, the state has been moving to an accountability system that measures results and outcomes in K-12 public schools. If the objective for quality child care is to ensure that young children are ready for kindergarten, then a child care rating system should be aligned with the K-12 accountability system. An input-driven rating system is not the best way to provide parents with meaningful results regarding the quality of the child care facility.
“Therefore, I am directing the Departments of Education and Human Services to collectively review the concept of a Quality Rating System, and to make recommendations on what would be the necessary components to better align kindergarten readiness of a child to the rating of a child care facility,” Governor Pawlenty said.
• A $37,000 appropriation to the Legislative Coordinating Commission for improving legislative effectiveness and financing a legislator’s international forum. “These are worthy activities, but they should be funded from the Legislature’s existing appropriations or its unexpended balance of $4.8 million. In the end, real reform will be achieved when the Legislature adopts my performance pay for politicians’ proposal, not from additional self-funding,” Governor Pawlenty said.
• A $5,000 increase in FY 2006 and 2007 for the Board of Chiropractic Examiners. “This appropriation duplicates funding included in separate legislation (Chapter 267) which I have already signed into law,” Governor Pawlenty said.
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