Legislative Policy Priorities
The League Board of Directors adopts legislative policy priorities each year. The Board has adopted the 2009 priorities. The top three are:
- State and local fiscal relations,
- Economic development/public finance, and
- Sustainable development.
Check back soon for more 2009 legislative issues for cities to watch.
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2008 Legislative Policy Priorities
The priorities for the 2008 legislative session were:
- State/local fiscal relations
- Economic development/public finance
- Adequate funding for state and local transportation
- Pension Post Fund deficit
- Other post-employment benefits
- Expiration of Public Safety Officers Benefit Panel
- Water infrastructure funding
- Drinking and wastewater standards
- Land use
- Cable franchising authority
- Elections
- Housing
To see all of the League’s legislative policies, view the 2008 City Policies (pdf).
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State/local fiscal relations
In 2003 and 2004, the state Legislature imposed deep cuts in local government aid (LGA) and the market value homestead credit (MVHC). Since that time, the Legislature has failed to fully restore the LGA cuts in order to balance the state’s budget deficit, leaving the appropriation for LGA more than $100 million lower than the pre-2003 level.
For 2007, the Legislature allowed the cuts in the MVHC system to be fully restored, but the structure of that program is slowly phasing out, placing additional pressure on the property tax. Property taxes and state aids are the major sources of local revenue. Therefore, without a restoration of the 2003-2004 cuts or annual growth in these property tax relief programs, the property tax has become the default source of revenue to fund essential local services.
The League supports reinvigorating the state/local fiscal partnership, including the restoration of the remaining 2003-2004 LGA cuts, protecting cities from new cuts in the MVHC, and using the circuit breaker and targeting programs to provide tax relief directly to taxpayers when tax burdens increase due to the phase-out of limited market value. The League will also continue to support local control of local budgets, and oppose efforts to impose state restrictions on local property taxes.
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Economic development/public finance
Cities have statutory authority to manage economic development activities within their jurisdictions. The League will continue to defend tax increment finance (TIF) laws, and work to restore funding for various statewide economic development and redevelopment programs at the Department of Employment and Economic Development (DEED). These programs assist cities by bridging funding gaps for important economic development components such as construction of infrastructure and clean-up of contaminated soils.
The League will also urge the 2008 Legislature to re-pass portions of the vetoed 2007 omnibus tax bill, which contained a number of favorable policy changes to programs such as TIF and DEED’s Job Opportunity Building Zones (JOBZ) initiative.
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Adequate funding for state and local transportation
The League has long supported increased investments in Minnesota’s transportation infrastructure. The League’s transportation priorities in 2008 include:
- an increase in the state’s gasoline tax;
- new local funding options that would allow local units of government to raise the dollars necessary to adequately fund roads, bridges, and transit;
- a mechanism to assist local units of government with participation costs related to trunk highway and county state aid projects; and
- funding to build roads to standards that can accommodate the year-round transport of heavy loads.
The League’s message on transportation emphasizes the relationship between the underfunding of the state’s transportation infrastructure and growing property tax burdens.
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Pension Post Fund deficit
The Minnesota Post-Retirement Investment Fund (Post Fund), which is the pool of assets transferred from the three statewide retirement systems when employees retire, is currently estimated to have a deficiency of more than $2.4 billion. Under current law, there is no mechanism to fund this deficit other than unpredictable investment returns.
In response to the deficit, the state’s three major public pension plans established the Post Fund Committee of the Joint Retirement Systems to develop recommendations to address the Post Fund deficit. The committee’s proposal would begin to address the deficit by reducing the annual benefit adjustments for retirees through the elimination of the investment return adjustment, thereby only adjusting benefits by inflation up to 2.5 percent per year. The proposal also contains an “inflation equalizer” adjustment for individuals who retired in 2001 or later that would be triggered in years when current inflation is less than the 2.5 percent adjustment limit.
In the event that that these adjustments are not sufficient to address the deficit in a reasonable amount of time, the proposal includes a failsafe merger proposal that would dissolve the Post Fund and divide the assets among the three active funds.
The League supports the provisions in the proposal to reduce the benefit increases for retirees. However, the League has reservations about the failsafe component of the proposal due to the fact that the Post Fund deficit would fall back on active employees and employers.
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Other post-employment benefits (OPEB)
The omnibus tax bill that was vetoed in 2007 contained changes to Minnesota statutes that would allow cities to establish trust funds for other post-employment benefits (OPEB).
The legislation would have allowed the funds in post-employment benefit trusts to be invested in long-term investments similar to allowable pension investments. A second provision would have allowed local units of government to issue bonds to amortize long-term OPEB liabilities. The governor was not opposed to the OPEB provision contained in the vetoed bill.
The League will advocate for re-passage of the OPEB provisions supported by the League and other local government associations.
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Expiration of Public Safety Officers Benefit Panel
The 2005 Legislature created a stakeholder panel to evaluate individual claims for the continued health insurance benefit employers must provide for public safety employees injured in the line of duty. The panel, which is set to expire on July 1, 2008, did not succeed in narrowing eligibility for the continued health insurance benefit, in part because the few claims denied by the panel were overturned by the courts.
In 2007, the League and other stakeholders were successful in reaching agreement on a tighter definition of “line-of-duty disability” for purposes of eligibility for pension benefits. “Duty disability” is now defined as an injury sustained while performing activities that present “inherent dangers specific to these professions.” This means public safety employees injured while performing duties that do not present inherent dangers would be ineligible for line-of-duty disability benefits.
Due to the correlation that has been established between the Public Employees Retirement Association Police and Fire plan line-of-duty disability benefits and the continued health insurance benefit, this change is expected to result in a decline in eligibility for continued health insurance. The League will oppose any efforts to extend the existence of the panel.
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Water infrastructure funding
In 2006, the Legislature passed the Clean Water Legacy Act, which the League supported. This legislation provides a framework for Minnesota to meet federal water quality requirements, and funding to help local governments meet the capital costs of those currently unfunded federal mandates. The broad coalition supporting this legislation includes groups representing local government, agriculture, environmental interests, business and industry, and water management organizations.
More than $25 million in start-up funding for these programs was provided, but a long-term funding source for $80 million to $100 million per year is still needed. Funding for public infrastructure components of the Clean Water Legacy Act will be discussed as part of the state bonding bill during the 2008 session.
The League will advocate for funding to assist local governments when complying with state and federal infrastructure requirements, particularly with regard to wastewater, stormwater, and drinking water.
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Drinking and wastewater standards
Minnesota municipalities have invested and continue to invest billions of dollars in wastewater and stormwater management systems, as well as best management practices to protect, preserve, and restore the quality of Minnesota’s surface waters. Still, the quality of some of Minnesota’s surface waters does not meet federal requirements.
The federal Clean Water Act requires that the state make further efforts to reduce human impacts on surface waters that are determined to be impaired due to high pollutant loads of nutrients, bacteria, sediment, mercury, and other contaminants. Scientific studies of these waters must be conducted to determine how much pollution they can handle. The pollutant load reduction requirements will affect municipal, industrial, and agricultural practices and operations along any river, stream, or lake determined to be impaired.
The League will advocate for state funding to assist local governments when complying with state and federal infrastructure requirements, particularly with regard to wastewater, stormwater, and drinking water. The League is actively working with the administration, legislators, and other stakeholders in the design and implementation of Minnesota’s impaired waters program.
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Land use
Minnesota cities spend significant time and resources planning for growth, development, and redevelopment that will best serve the future needs of residents. Numerous factors are considered as part of that process, but an area of increasing interest involves concepts often categorized as “sustainable development.”
The League supports efforts to promote sustainable development where the effectiveness of the proposed practice is supported by sound science, and as long as those efforts do not supersede the authority of local governments to determine their own policies regarding land use and related issues. The League opposes mandates that limit the authority of cities to determine what practices will best meet the needs of their communities.
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Cable franchising authority
In recent years, increasing numbers of telecommunications service providers have begun offering competitive video services. Providers claim that local franchising can be a barrier to competitive entry by wireline video service providers; however, there is no evidence that local franchising is a barrier.
Under the framework of existing non-exclusive local franchising, communities have realized significant benefits of the deployment and upgrades to cable systems. Local franchising authorities have promoted the benefits of competition and development of innovative services as a primary source for deployment of broadband technology. In pursuing the goal of providing increased consumer choice, city officials look for opportunities to encourage competitive entry while assuring that community needs and interests are met.
The League supports keeping franchise authority at the local level to assure that competitive franchise agreements reflect new technology and are reasonably tailored to the technical and operational differences among providers and communities.
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Elections
Cities play an important role in administering state and federal election law and conducting voting activities. The League will pursue legislation to strengthen the role and effectiveness of local election administration.
Specifically, the League will seek re-passage of provisions in the vetoed 2007 election bill that would have:
- Allowed cities and other local government units to appoint election judges not affiliated with major parties.
- Expanded options for military voting to assure that votes cast by those serving in the military would be counted.
- Updated voter addresses based on returned mail with permanent forwarding orders.
- Allowed polling places to be sited up to one mile outside precinct boundaries.
- Required polling place challengers to prove residence and to take an oath.
- Modified restrictions for lingering or campaigning near polling places.
- Repealed a requirement for election judges to tally the number of persons who do not succeed in registering to vote on election day.
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Housing
Cites need additional resources to be successful in providing a range of housing choices for working and low-income households.
The League supports the Housing Solutions Act, which is aimed at increasing state funds for the Minnesota Housing Finance Agency. The Act would provide alternative sources of revenue, such as the Housing Account for Leveraged Opportunities (HALO), to finance additional resources at the state level, which cities can match to develop housing that meets critical local needs.
Your LMC Resource
Contact intergovernmental relations (IGR) staff if you have questions or suggestions about the League's legislative policies or priorities.