May 24, 2012The Citizens League identified several priorities for reform at the 2012 Minnesota Legislature, most of which were drowned out by the stadium debate this year. Here is a recap of which reforms we supported and their outcomes from this year's legislative session. Asset Development Two measures related to asset development were included in the Omnibus Health and Human Services bill (HF2294). The Ladder Out of Poverty Task Force, which was set to expire June 1, 2012, was re-constituted as the Asset Development and Financial Literacy Task Force and will continue until June 1, 2014. The Citizens League will continue to work with this task force on asset development. The Department of Human Services will work with counties to seek uniform asset limit requirements across several programs and produce draft legislation for 2013. This effort could reduce the amount of resources trapped "navigating the lines" of poverty, a main finding from the Pathways to Prosperity Project. Family Assets for Independence in Minnesota (FAIM) A bipartisan effort revived FAIM during the 2012 Legislature and appropriated $250,000 in the Omnibus Health and Human Services bill (HF2294). This was after its $250,000 annual appropriation was cut in July 2011 as part of the solution to the budget deficit. Continuing the matched-savings project to help low-wage earners is one piece of the asset development framework that the Citizens League supports as part of the Pathways to Prosperity project. Since a state appropriation is required for federal matching dollars, participating non-profits have been cobbling together other funding streams to keep the federal match alive and this year's appropriation does not solve that problem. Since the 2012 appropriation is one-time and is a redirection of federal TANF (Temporary Aid for Needy Families) dollars, it still does not trigger the federal match. It does begin the momentum for funding in the 2013-2014 biennium which the Citizens League supports. Chief authors were Rep. King Banaian and Sen. Michelle Benson (HF2062/SF1720). The Citizens League supports funding for FAIM at $500,000 per year in state funding in order to take full advantage of the federal match. FAIM is part of the approach that the Citizens League seeks to expand upon as we seek partners to form Family Independence Demonstrations in 2013. Prize-Linked Savings Progress was made in identifying interested legislators and vetting a proposal with state agencies to create a savings promotion raffle that helps families build assets. The legislation would enable financial institutions to offer a new savings product that offers drawings for monthly prizes and an annual prize for those who make regular deposits. More organizations were also made aware of the potential of this savings tool. The Citizens League will continue to pursue with partners in 2013. This is another part of the asset development framework in Pathways to Prosperity. Impartial Justice Act Despite the plethora of constitutional amendments before the Legislature in 2012, a proposed constitutional amendment providing for judicial retention elections was not heard in either body despite a broad bipartisan coalition of support. Chief authors were Rep. Michael Beard and Sen. Doug Magnus (HF1666/SF1465). The Citizens League will continue to support efforts to get this amendment on the ballot in a future election. MnPASS expansion Although MnDOT already has authority to expand MnPASS, the agency sought legislative approval to expand this popular congestion-pricing option to commuters in the east metro as part of an $80 million expansion project north of downtown St. Paul on I-35E. The legislation passed the House as part of the Omnibus Transportation Policy bill (HF1284), but some Senators opposed it, considering it a tax increase and it was not heard on the Senate floor. The Citizens League supported the expansion of MnPASS and does not consider its expansion a tax increase since it is a market-based traffic management tool and only those who choose to buy the benefit of free flow on a congested highway will pay. Better management of this highway capacity will also benefit those who don't pay, and there is no charge when the highway is not congested. This does not fit the definition of a tax or toll. Chief authors were Rep. Michael Beard and Sen. Ann Rest (HF1588/SF1297). Tax Expenditures The Citizens League supports ongoing legislative review of tax expenditures along the lines of this February 2011 report from the Department of Revenue. Tax expenditures amount to roughly $24 billion in tax exemptions, deductions and subsidies granted by the state each biennium that do not require legislative approval to continue. Eliminating or reducing a tax expenditure, however, should not automatically mean an overall tax increase. The Citizens League supports the general approach that elimination or reduction of a tax expenditure should automatically reduce the rate of the tax for everyone unless the Legislature decides otherwise. With state government still facing a structural budget deficit, tax expenditures should be on the table for discussion. There was no legislative progress towards this goal in 2012.
Posted by lschumacher at May 24, 2012 9:06 AM