Political Notebook

On second try, Senate passes tax bill

It took a do-over vote but Mayo Clinic’s quest for state dollars to help support its ambitious expansion efforts cleared a critical hurdle on Monday night.

But it’s passage was anything but easy. On the first try, the Senate tax bill that includes roughly half a billion for Mayo’s Destination Medical Center initiative failed to pass by a vote of 32 to 34, with seven Democrats in the DFL-controlled Senate casting “no” votes. After a short meeting where Democrats gathered in the retiring room to meet, a motion was made to reconsider the tax bill. It eventually passed 35 to 31 with Sen. John Hoffman, DFL-Champlin, and Sen. Greg Clausen, DFL-Apple Valley switch their votes. Sen. Ann Rest, DFL-New Hope also voted after failing to vote the first time around. That bill’s passage brought about accusations of arm twisting from Republicans — something Democrats denied.

Rochester Sen. Dave Senjem was the lone Republican to vote for the tax bill both times. He said he is strongly opposed to most of the tax increases in the bill, saying the DMC project “is a rose in a bed or rocks.” But at the end of the day, the Mayo Clinic retiree said he has to support this massive project that will create an estimated 25,000 to 30,000 jobs.

“As I drive home, I drive home with the idea that I must support Destination Medical Center. It’s just that great,” Senjem said.

But Senjem also supported not reconsidering a vote on the failed tax bill, saying it was clear the bill still needed work. Voting yes on the tax bill were Senjem and DFL Sens. Matt Schmit of Red Wing and Dan Sparks of Austin. Voting no were DFL Sen. Vicky Jensen of Owatonna and GOP Sens. Carla Nelson of Rochester and Jeremy Miller of Winona.

Last week, the House passed a tax bill that including Mayo’s DMC project. Differences between the two versions will be hashed out in a conference committee. Senjem’s “yes” vote means he will likely get a spot on that key committee.

Like the House bill, the Senate version caps state spending at $327 million over 20 years for general infrastructure. Those dollars would be used to pay public infrastructure that includes parking ramps, an atrium and site development. n.

Both versions call for sharing $116 million in transportation costs with Olmsted County. It’s estimated the county’s share would be $40 million. Before those dollars would flow, Mayo would have to invest $250 million.

These infrastructure upgrades are aimed at supporting Mayo’s quest to transform itself into a global destination for health care. Mayo has pledged to invest $3.5 billion to expand its Rochester campus and plans to leverage more than $2 billion in private investments.

After tax bill failed, Nelson cautioned Rochester residents about getting worried Mayo's DMC plan wouldn't pass. She said of all the bills this session a tax bill needs to pass to cover the state's $627 million deficit and additional spending proposed by the DFL-led Legislature.

"I don't want people in Rochester to freak out. The tax bill will pass," she said.

Senjem says his vote on gay marriage will be 'spontaneous'

At least one Rochester lawmaker is not sure how he'll vote on a bill to legalize same-sex marriage.

Republican Sen. Dave Senjem said he is just going to wait until the day of the debate and make a decision when he is faced with pushing the red or green button.

"I am just going to wait until that magic moment and make that decision in a pretty spontaneous way," he said.

If he had to vote at this moment, he said he would probably vote "no." But he said he is not sure what he will do when actually confronted with the decision. When he talks to young people, it is clear most of them support gay marriage. He added that attempts to block gay marriage amount to society "standing in front of a freight train."

 

 

Sen. Dave Senjem said he is not sure how he will vote on a bill to legalize same-sex marriage.

Norton pulls name from one civil union bill, adds it to another

Rochester Rep. Kim Norton removed her name from one bill that would allow same-sex civil unions in favor of another.

Norton was the lone Democrat to sign onto Red Wing GOP Rep. Tim Kelly's bill that would have allowed civil unions in addition to marriage. But critics blasted that proposal saying it would treat gay couples as second-class citizens, creating a separate but unequal system.

Today, Kelly introduced a new bill that strikes the word "marriage" from state law and replaces it with civil unions. Kelly said that would get the government out of defining marriage, leaving that to religious institutions. Norton is the only DFL co-sponsor on that bill.

In an interview Wednesday, Norton said she preferred this second approach, which treats gay and straight couples the same. She said a majority of her constituents are not in favor of legalizing gay marriage but do support the concept of civil unions.

"I know that is not acceptable to a lot of the (gay marriage) advocates," Norton said. "I've asked them to try and understand it is what a majority of my constituents (support)."

Mayo Clinic's DMC plan passes House

Mayo Clinic’s ambitious expansion plans for Rochester are one step closer to becoming a reality.

The Minnesota House voted 69 to 64 to approver funding for Mayo Clinic’s Destination Medical Center proposal on Wednesday as part of a sweeping tax bill. The 20-year plan requires Mayo Clinic to invest $200 million before state dollars would begin to flow for public infrastructure projects in Rochester. The local community would be required to contribute $128 million toward the project. The county would be on the hook for an additional $33 million for transportation upgrades.

House DMC bill sponsor Kim Norton, DFL-Rochester, said the project will create an estimated 25,000 to 30,000 direct jobs, up to 15,000 in indirect jobs and up 2,200 annual construction jobs.

"This is probably the largest economic development opportunity anywhere in the country," she said.

But not all the lawmakers in the Rochester-area delegation agreed the tax bill was worth supporting — even if the DMC project is in it. Rep. Duane Quam, R-Byron, said while there may be some good provisions in the bill, the damage caused by tax increases in the bill outweigh any potential benefits.

"This is a stone cold, job killing bill," he said.

The House tax bill raises $2.6 billion in revenue and includes raising taxes on wealthier Minnesotans, alcohol, cigarettes, sports memorabilia and silica-sand mining. It creates a fourth-tier 8.49 percent rate on couples with a taxable income of more than $400,000 and single filers with taxable income of $226,200. It also imposes a two-year, 4 percent income surcharge on taxable income over more than $500,000. Taxes would be boosted by $1.60 a pack for cigarettes and 7 cents a drink on alcoholic beverages. Those additional dollars would be used to close the state’s $627 million budget gap, pay back $854 million borrowed from K-12 schools and provides $250 million in property tax relief.

Nelson votes against tax bill that includes Mayo's DMC

Rochester GOP Sen. Carla Nelson voted against a tax bill on Wednesday that includes Mayo Clinic's Destination Medical Center proposal.

Nelson said that while she is a strong supporter of the plan, which allocates up to $455 million in state funding to help build public infrastructure, she couldn't vote for the tax increases included within the larger tax bill. The bill would raise $1.1 billion in new revenue over two years and boost income taxes on individuals making over $80,000 a year and couples making $141,000 or more.

"I was disappointed to see this great bipartisan initiative that is of such importance to our state wrapped in a highly-partisan tax bill," she said.

In fact, Nelson offered an amendment during a Senate Taxes Committee hearing to advance the DMC project and strip out all the other tax language. That failed on a voice vote.

While Nelson choose to vote no, fellow Rochester Republican Dave Senjem voted yes. The lead author of the DMC bill told me last week he planned to vote "yes" even though he does not support most of the provisions in the tax bill.

"This is so overwhelmingly important to my community and its future that I am obligated" to vote for it," Senjem said.

The tax bill passed the commitment by a vote of 9 to 4 with Senjem being the lone Republican to vote for the bill.

Other local Republicans in the House are about to be faced with the same dilemma Nelson and Senjem faced. The House is voting on its tax bill Wednesday that includes the Destination Medical Center but is also loaded with several tax hikes.

Revamped Senate plan allows Roch residents to serve on DMC board

Rochester residents would be allowed to serve on the authority board overseeing Mayo Clinic’s Destination Medical Center plan under a Senate plan unveiled on Monday.

That is in sharp contrast to the previous proposal, which would have prohibited any Rochester residents from serving on the authority. That group is charged with deciding how to spend millions of dollars on public infrastructure. The Senate plan also requires Mayo Clinic to spend $250 million on construction before state dollars could be tapped. That’s $50 million more than in the House version of the plan. The local share of the project is similar to that in the House plan, with the city responsible for $128 million and the county committed to up to $40 million for transportation costs.

Rochester City Council Interim President Randy Staver thanked members of the Senate Taxes Committee during a hearing on the bill for their hard work on the proposal. He said the city officials still need to review the latest proposal, noting that the local contribution is “considerably higher than the city had been anticipating.” Rochester had originally pledged $60 million for the project. Still, he said the city is pleased to see the Destination Medical Center proposal continue to advance.

“This is an opportunity that will ensure that Mayo’s flagship will remain in Minnesota and in Rochester for years to come,” he said.

The plan would require Mayo Clinic to spend $250 million before state dollars would start flowing for public infrastructure projects to support the clinic’s 20-year expansion plans. That is $50 million more than required under the House version of the plan. The Senate bill also requires a similar local match for the Mayo Clinic Destination Medical Center proposal. It requires $128 million match for general infrastructure upgrades along with an estimated $40 million from Olmsted County for transportation projects. The state’s contribution would be capped at $455 million.

Mayo wants the state’s help in paying for roads, bridges, transportation and other infrastructure upgrades needed to help transform Rochester into a global destination for health care. The clinic has pledged to spend $3.5 billion to expand its Rochester campus and leverage $2 billion in private investment.

The latest Senate and House plans give the city of Rochester and Olmsted County choices as to how they want to pay for the local match. The city could choose to impose an entertainment tax, extend its existing half-cent sales tax, increase the sales tax by a quarter cent or increase its lodging tax. The county would have the option of raising a quarter-cent transportation tax.

Local share for DMC jumps to at least $128 million in House plan

Note: This blog post has been updated to correct an error. Olmsted County would not be responsible for entire $119 million in transportation upgrades as originally reported. Rather, the county would only pay a portion of that amount based on a formula. Details about the specific dollar amount were not available Monday night.

The local match for Mayo Clinic Destination Medical Center would swell to at least $128 million under a legislative compromise unveiled Monday night as part of the House tax bill.

The legislation would require the city to contribute at least $128 million toward the 20-year project. In addition, the county would be responsible for a portion of $119 million in transportation upgrades needed for the project. That’s well above the $60 million in local funds initially pledged toward the project. The bill also drops the state’s share of the cost to $338 million instead of the $565 million Mayo Clinic had been seeking.

Rep. Kim Norton, DFL-Rochester, said Mayo and local officials will have to determine whether this proposal is workable. The plan would give the city and county the authority to raise a wide range of taxes to cover the local match. Ideally, the majority of those taxes would be targeted at visitors, but Norton said that won’t cover the whole cost. Inevitably, local taxpayers will have to pony up more for this to work.

“There will be an additional burden, and it could just be an extension of our sales tax, which everyone is used to paying, and I am sure that won’t sit well with some citizens,” she said. “And yet, we’ll all benefit from what’s going to happen financially as well as being a livable city.”

In order to remain more globally competitive, Mayo Clinic has pledged to invest $3.5 billion to expand its Rochester campus and leverage more than $2 billion in private investment. In exchange, the clinic wants the state to pay for the public infrastructure upgrades needed to support that massive growth. Those dollars would go towards things like parking ramps, transit, bridges and site clean-up costs.

Initially, Mayo proposed capturing a portion of the additional state taxes generated by the project and using those to pay for the infrastructure upgrades. But that idea failed to win support among key lawmakers, including House Taxes Committee Chairwoman Ann Lenczewski. Under the new plan, Mayo Clinic would have to spend $200 million on construction before any state money would be available. The state would provide up to $30 million per year in direct aid to the city for infrastructure.

Lenczewski said an analysis showed that Rochester residents pay far less for infrastructure than residents in other large cities. This plan requires the local governments to pay their fair share.

“We think it’s a very reasonable lift,” she said.

Local share of DMC plan over $100 milllion in House compromise

The city of Rochester and Olmsted County's share of Mayo Clinic's Destination Medical Center plan would swell to more than $100 million under a House plan, according to bill author Kim Norton.

The House tax bill language will not officially be released until 6 p.m., but Norton offered a brief overview of what is included in the bill. It would drop the state's funding for the plan from upwards of $500 million to more than $300 million. Those dollars would go toward building public infrastructure to support Mayo Clinic's plan to invest $3.5 billion to expand its Rochester campus and leverage $2 billion in private investment.

Gone is Mayo Clinic's initial proposal to capture some of the state sales tax generated by the development. Instead, Norton said the funding would be based on capital investments made as part of the project. It would also lower the cap on amount of money available for infrastructure upgrades  per year to less than half of the $75 million Mayo had wanted. In terms of the local match, officials would get to choose from up to eight different types of tax increases to raise the money.

The tax bill also revamps the DMC's governing structure. Mayo Clinic had initially proposed establishing an economic development corporation to oversee daily operations and then a separate advisory board to approve how public dollars are spent. The House plan scraps the advisory board and lays out criteria for membership on the nonprofit corporation's board. The nine-member board would include the mayor, a city council member and a county board member. It also gives the Rochester Area Chamber of Commerce the chance to suggest a number of members with the city council selecting two. Mayo Clinic would also recommend appointees with the city council choosing two. The last two seats would be appointed by the governor.

"I think we're all comfortable with where we're at knowing there's plenty of opportunity for change," Norton said.

Walz crowned 2013 hotdish winner

The third time proved to be the charm for 1st District Rep. Tim Walz who battled fellow members of Minnesota's congressional delegation to win Sen. Al Franken's hotdish competition.

Walz pulled off the victory with his "Hermann the German" hotdish, which features brats, tater tots and Schell's beer. The Mankato Democrats' culinary concocotion beat out seven other dishes in a blind taste test for the top spot.

“I want to thank Sen. Franken and his staff for putting this annual, bipartisan event on. It was great to share our recipes and great to finally win,” said Rep. Walz in a statement. “Today we share our hot dish recipes, tomorrow let’s share our ideas to create jobs, grow our economy, and forge a better future for our children and grandchildren.”

This is the third time Franken has hosted the hotdish competition. Joining Walz and Franken in the competition this year were  Sen. Amy Klobuchar and Reps. Collin Peterson, Betty McCollum, Michele Bachmann, Keith Ellison and Rick Nolan. Former congressmen Vin Weber and Gerry Sikorski served as the taste testers.

Klobuchar scored a respectable second place finish with her "Hormel 'I Can't Believe It's Not SPAM' Pepperoni Pizza Hotdish."

"Our Hormel hotdish may not have the shelf life of SPAM, but the recipe is timeless," said Klobuchar in a statement. "It's great to come together every year with the Minnesota delegation for some home-cooked competition and our dish would not have been complete without the delicious pepperoni from a great Austin company. I think if I had added a little more of it, we could have clinched the win."

The other participants made the following dishes: Franken made Willmar Stew Hotdish; Peterson made Easter Ham and Cheese Hotdish; McCollum made Beef, Beer, & Biscuits Hotdish; Bachmann made Southwest Metro Hotdish; Ellison made Juicy Lucy Hotdish; Nolan made ‘Real Deal’ Ranger Hotdish; and Paulsen made Kelly Paulsen’s Taco Hotdish.

For the recipes, go here. To watch video from the competition, go here.

Mayo Civic Center instead of Mayo's DMC plan?

This morning, House Democrats unveiled an $800 million bonding proposal that includes $35 million for the Mayo Civic Center expansion. House Capital investment Committee Chairwoman Alice Hausmen noted during the committee's hearing on the plan that in 2009 Rochester leaders wrote a letter stating the civic center was an "important component" of Mayo Clinic's Destination Medical Center initiative.

"I think this is kind of the first step that we can take toward meeting that vision," Hausman said.

But Rochester lawmakers and city officials have been making the case that the Mayo Civic Center and Mayo Clinic's request for $585 million in state support to fund public infrastructure upgrades in the city are separate projects and should not be lumped together.

The ranking Republican on the committee, Rep. Matt Dean, criticized Democrats for not recognizing the difference.

"Saying we are doing something in Rochester, so that equals Destination Medical Community — that ain't the same thing. It probably ain't the same thing for the Mayo Clinic and the city of Rochester," he said.

He also noted the neither the governor's bonding bill proposal nor the House Democrats' plan has funding for the DMC project.

The governor did say he was willing to put money into his bonding plan for the DMC project depending on how lawmakers decide to move ahead with the plan. At this point, Mayo Clinic is pushing for the state to authorize the state to sell $585 million in appropriation bonds, which would be separate from the bonding bill.

Hausman has said previously that the $60 million included in the House bonding bill for projects in Rochester and Olmsted County — including the civic center — should count towards the state's share of the DMC plan. She fears the current plan to authorize borrowing for the whole project upfront could end up hurting the state's ability to borrow money for other projects in the future.