Are you starting to think about the upcoming legislative session and what that will mean for libraries and schools? No? Well, that is probably OK since the next session does not begin until February 25, 2014! This year will be a bonding year rather than a funding year, which usually provides relief from some of the extreme highs and lows that libraries and schools experience around budget issues. For your convenience, here is a recap of the last session written by Elaine Keefe, our MLA/MEMO lobbyist representing our library and school media issues at the State Capitol.

Elaine writes…..below is a summary of the 2013 legislative session.  Most of this information has appeared in previous reports.

State Budget Overview:  The Legislature and Governor Dayton agreed on a budget for the 2014-15 biennium that erases a projected $627 million deficit and provides additional funding for education and local governments.  In order to raise the revenue to accomplish this, income taxes were increased on the top 2% of income tax filers, cigarette taxes were increased by $1.60 per pack and the sales tax was broadened to include some business services.  With DFL majorities in both the House and Senate and a DFL governor, the budget negotiations were far less contentious than they were two years ago when most of state government was shut down for 20 days because Governor Dayton and the Republican-controlled Legislature were unable to agree on a budget.

Here is a summary of legislative action affecting libraries:

Education Payment Shift:  Repayment of the shift has proceeded much more rapidly than many had expected.  Under current law, whenever a state economic forecast projects a budget surplus, the surplus must first be used to replenish the state budget reserve (if necessary) and any remaining surplus must be used to repay the shift until a 90% /10% payment schedule is achieved. Although the November 2012 and February 2013 forecasts both projected a deficit for the 2014-15 biennium, those forecasts also projected surpluses at the close of the current biennium, which ends on June 30.  Hence, the shift was reduced by $1.3 billion after the November forecast and by another $290 million after the February forecast, resulting in a current payment schedule of 86.4% / 13.6%.  Under the budget deal reached by the Governor and Legislature, if there is a surplus after the close of the current biennium, that amount will be used to repay the shift without waiting for the November forecast.  The current estimate is that this will be another $300 million.  This should be sufficient to reach a 90/10 payment schedule.

Library Appropriations in the K-12 Budget:  Current funding was maintained for Regional Library Basic System Support, Regional Library Telecommunications Aid, Multi-types, ELM and Telecommunications Equity Aid. We also succeeded in getting an amendment included in the omnibus education bill changing the terminology for RLBSS and multi-type funding from “grant” to “aid” to better reflect how these programs are administered.

Homework Help:  Our bill to fund an online Homework Help service statewide was introduced in both bodies but did not receive a hearing.  There was heavy emphasis this year on providing additional funding for large existing programs, leaving little room in the budget for new initiatives. Our bill was introduced in the Senate by Senator John Hoffman (DFL – Champlin) and in the House by Rep. Kathy Brynaert (DFL – Mankato).

General Education Formula: The general education formula (which is the main source of funding for school media centers) will increase by 1.5% in each year of the biennium.  It will rise from the current $5,224 per pupil to $5,302 in FY 2014 and to $5,806 in FY 2015.

Total Operating Capital:  MDE included language in its omnibus policy bill that would have prohibited schools from using total operating capital to pay for annual licensing fees for software.  I raised a concern about that language on behalf of MEMO.  After much negotiation, MDE agreed to amend the language to specifically allow the use of total operating capital for software and annual licensing fees.  This passed in the omnibus education bill.

Minitex and MnLINK:  Funding for Minitex and MnLINK was increased by $300,000 per year.  It is the first increase for Minitex and MnLINK since the 2007 session.  Our authors were Senator Kent Eken (DFL – Twin Valley) and Rep. Ryan Winkler (DFL – Golden Valley).

Higher Ed Systems:  MnSCU funding was increased by $102 million and the University of Minnesota by $79 million.  Most of these funds are earmarked for freezing undergraduate tuition.

Legacy Funding for Regional Public Libraries:  Regional Public Library Systems received $3 million per year to provide arts and historical programs. This is the same level of funding provided during the current biennium.  The funds will be distributed via a revised formula that replaces the equalization factor with a “qualifying system entities” factor.  We had to fight hard to retain this level of funding after the Senate bill proposed to reduce it to $1 million per year in an effort to maximize the funding for the State Arts Board.  Many thanks to everyone who contacted their senators and the members of the Legacy conference committee to urge them to maintain the current funding level for regional public libraries.  You were definitely heard!

Legacy Funding for the Minnesota Digital Library:  The Minnesota Digital Library received $300,000 per year.  This is an increase over the current $250,000 per year appropriation.  As in the past, this funding is appropriated to the Minnesota Historical Society with a directive to cooperate with Minitex and jointly share the appropriation.

Legacy Percentage to the State Arts Board:  The Senate Legacy bill added a provision in statute requiring that 50% of all future appropriations from the Arts and Cultural Heritage Fund would be allocated to the State Arts Board.  Senator Cohen insisted that this was the intent when the Legacy Amendment was passed.  The final bill requires that 47% go to the State Arts board in the future.

Data Privacy:  Our bill to extend current data privacy protection for public library patron records to electronic data stored by a vendor was introduced by Senator Kari Dziedzic (DFL – Minneapolis) and Rep. Steve Simon (DFL – St. Louis Park).  It was heard in both bodies and passed out of the House Data Practices Subcommittee before we learned that other provisions in current law already afforded this protection to such data.  Our bill became the vehicle for the omnibus data practices bill, but our provision was deleted after we learned it was unnecessary.

Library Accessibility and Improvement Grants:  Although it was not a traditional bonding year, the Governor and the House were eager to see a large bonding bill pass. We were encouraged to get a bill introduced to fund Library Accessibility and Improvement Grants, and so a bill to provide $3 million was introduced by Rep. Mary Murphy (DFL – Hermantown) and Senator Alice Johnson (DFL – Spring Lake Park).  The House included $1.5 million in the final version of its bonding bill, but the bill failed to get the required supermajority on the House floor.  It needed 81 votes and only got 76 votes.  The Senate never did produce a major bonding bill.  In the end, a very small $176 million bill passed, with most of the funds allocated for renovation of the Capitol.  A major bonding bill will be on the agenda for 2014.

Aid to Cities and Counties:  Aid to cities was increased by $80 million and aid to counties was increased by $40 million.  The trade-off is that levy limits will be in place for 2014.  The limits are relatively generous — the city or county’s aid plus levy for either 2012 or 2013, whichever is greater, plus 3%.

Sales Tax on City and County Purchases:  Cities and counties will no longer have to pay sales tax on their purchases beginning January 1.  The sales tax was imposed on local units of government (except for school districts) in 1992 as a way to solve a budget deficit.  There have been repeated attempts to repeal the tax since then, and despite broad agreement that the tax was bad policy, it was difficult to repeal it because of the loss of revenue to the state. This is a great win for cities and counties.  Public libraries were partially taxed and partially exempted in 1992 when the tax was first passed.  We won a full exemption a few years later, so this will not have a direct effect on public libraries.

Elaine Keefe
Capitol Hill Associates
525 Park Street, Suite 310
St. Paul, MN 55103
office 651-293-0229
fax 651-293-1709
cell 612-590-1244
elaine@capitolhillassoc.com