With 2014 being an election year for the Minnesota House of Representatives pressure is on to end the legislative session early so the campaign can begin.  While that push will be on in the House, the Minnesota Senate lacks that sense of urgency.  This can be seen in the comments by the House and Senate majority leaders.  House Speaker Paul Thissen has been quick to comment on legislative proposals, while Senate Majority Leader Tom Bakk has adopted more of a "wait and see" position. Outside of election year politics, here are a few of the moving parts that will influence the dynamics of this year's session.

Timing

The second year of Minnesota's legislative cycle is typically the shorter of the two years. The 2014 session kicks off in two weeks, February 25.  Its projected end date is May 19, with pressure to wrap up sooner. Aggressive legislative deadlines for policy committee activity were released last week adding to an intense time dynamic.  The compressed timeline has already pushed legislative leaders to announce that there is not enough time to take up the proposed deposit-refund beverage container recycling program that has concerned retailers. While recycling rate goals are not off the agenda this year, what is commonly called the "bottle bill" is.

Bills that were introduced last year remain in play, and bills that made it to a conference committee of the House and Senate need not be publicly debated again.  This is the case with Minnesota's minimum wage bill.  When session ended in 2013, a conference committee was working on ironing out the differences between the House's $9.50 an hour plus automatic future increases with the Senate's $7.75 proposal. The shortness of the session may mean the minimum wage stays in conference committee, avoiding possible lengthy public testimony, however Senate Majority Leader Bakk recently indicated an inclination toward holding public hearings.

Budget Forecast

In December Minnesota Management and Budget projected that the State will have a $1.1 billion budget surplus. That might be good news when it comes to repealing three business-to-business (B2B) taxes, including the storage and warehouse tax scheduled to kick in April 1.  Following the surplus announcement, Governor Dayton indicated an interest in using the surplus to eliminate the B2B taxes.  After schools are repaid the $246 million they are owned by the State, $825 million may be available either to cut taxes or increase spending. Lawmakers are anxiously waiting for an updated surplus number in February. Assuming a surplus remains, there will be plenty of ideas as to what to do with the funds, creating a dynamic of its own at the Capitol.

Deals and Compromise

This year is a traditional bonding year for Minnesota.  As such politicians will debate building, road, and bridge projects that have a significant statewide impact.  The State will issue bonds worth at least $850 million based on an agreement among legislative leaders last year.  Governor Dayton has indicated he would prefer a bonding bill closer to $1 billion.  The difference between the two numbers will be the subject of deals and compromises this year, potentially wrapping B2B taxes, minimum wage, and several other issues together. Senate leadership seems to be in a strong position to negotiate many of these items, which means we likely won't see many high profile issues wrapped up until the end of session.

Governor's Unsession

At the end of last year, Governor Dayton declared the 2014 Minnesota legislative session as the "unsession", encouraging legislators, state government employees, and the public to bring forward reform ideas streamlining or improving state service delivery. Despite the attractive idea of focusing on dumping outdated regulations, some legislators lately have cranked up the transportation funding conversation.  Governor Dayton has telegraphed a lack of interest in increasing transportation taxes this year, but the idea is starting to form as an election year hot issue, with DFL legislators calling the current state of funding a near crisis. With the multitude of issues being tossed around and House members prefilling nearly 300 new bills before session even starts, we are unlikely to see a simple "unsession".

Minnesota's 2014 legislative session begins this Tuesday, February 25.

Meet Daniel Lightfoot, MnRA's government affairs assistant/intern for the 2014 legislative session.

My name is Daniel Lightfoot and I am a recent graduate of the University of Minnesota with a degree in Political Science and History.  I grew up in Plymouth, Minnesota where my passion for public service motivated me to secure internships with both the Office of Senator Al Franken as the economic policy intern and the White House working with the Office of Management and Administration. 

It is my pleasure to be working with the Minnesota Retailers Association during this upcoming legislative session.  I am eager to apply my skills and knowledge of congressional politics for the benefit of MnRA’s members with the hope of actively communicating with members to provide updates on all public policy issues that are of interest to retailers across the state of Minnesota.

Although this session is rather short, it is sure to be a fast-paced session packed with a number of controversial issues many of which will directly impact retailers both big and small.  Therefore it is my goal to be a resource to each and every one of our members as the session progresses to effectively manage and communicate our policy positions. 

I have always prided myself as being a quick learner and one who works best under pressure and what better way to showcase those skills than hitting the ground running this session?   I look forward to meeting as many of our members as possible and I am proud to be a part of MnRA’s mission in making Minnesota a strong place for retailers to do business and continuing to support such a vital industry. 

This holiday season, small business owners in Minnesota and across the country are sending a single wish list to members of Congress: close the online sales tax loophole, giving all retailers the chance to compete on a level playing field. Local employers are at a severe disadvantage to out of state online-only retailers, especially at this time of year--the busiest and most important season for small retailers.

Today, all local businesses are required to collect and remit sales taxes from customers, while many online retailers without some type of physical presence in Minnesota like Overstock and eBay are not required to do so.  While the Minnesota Legislature passed e-fairness earlier this year, out of state retailers without a presence in the state have a substantial pricing advantage against local small businesses, who cannot compete when the government essentially gives their competitors at least a 6.875 percent pricing advantage.

In September, retailers were encouraged when U.S. Representative Bob Goodlatte, chairman of the House Judiciary Committee, released 'Basic Principles on Remote Sales Tax,' which will serve as a framework for a conservative solution to finally close the online sales tax loophole. The release of these principles shows Chairman Goodlatte's strong commitment to ending the preferential tax treatment for online-only retailers at the expense of main street retailers.   While this is a positive step in the right direction, business owners are calling on Congress to take swift action by drafting legislation based on these principles and passing the bill in the U.S. House of Representatives.

"This needs to be the last holiday shopping season local retailers operate under this disadvantage in Minnesota and across the country," says Minnesota Retailers Association President Bruce Nustad. "At the state level, we have done our job to address this serious issue for retailers, now Congress needs to get e-fairness passed." 

The U.S. Senate, with leadership from Senators Amy Klobuchar and Al Franken, acted on e-fairness legislation earlier this year, when it passed the Marketplace Fairness Act by a wide, bipartisan vote, and a companion bill in the House already enjoys the support of over 60 bipartisan co-sponsors.  A recent study conducted by President Ronald Reagan's economist, Art Laffer, showed that e-fairness legislation coupled with state tax cuts would increase our nation's prosperity and employment-resulting in 1.5 million jobs in the next 10 years and creating an additional $563.2 billion in Gross Domestic Product (GDP). 

Governors, small business owners, and free market conservatives across the country have expressed their support for e-fairness legislation and agree that Congress needs to pass e-fairness legislation to give states the ability to collect these taxes online, as soon as possible.