Here is what is happening at the State Capitol as of April 12.

MLBA Capitol Update as of Friday, April 12, 2013

 Liquor Issues Update

Sunday Sales: The House Commerce Committee held an informational hearing last week on two bills relating to allowing Sunday sales of liquor. The first bill, HF 521 (Kahn), would allow liquor stores to be open all days expect for on Christmas Day. The second, HF 912 (Garofalo) would allow liquor stores to be open on the Sunday of the 2014 Super Bowl – February 2, 2014. Testifying in opposition to the bill were MMBA and MLBA lobbyist Joe Bagnoli and MMBA Board Member and Lakeville Liquor store manager, Brenda Visnovec. The Teamsters and Minnesota Beer Wholesalers Association also testified in opposition. Testifying in support of the bill was a liquor store owner from the city of Wanamingo. A vote was not taken on the bill, but it is likely that when the omnibus liquor bill is considered on the House Floor an amendment will be offered and put up for a vote.

Minimum Wage: The House and Senate committees have both passed bills through the committee process to the Floor of each body. We continue to work with legislators and Hospitality Minnesota to gain support for a tiered wage or tip credit proposal.

Liquor Taxes: On Friday, the Senate Taxes Committee held a hearing on the bill to increase liquor taxes and to dedicate the receipts of the taxes to programs addressing chemical dependency.  Testifying in opposition to the bill were:  MLBA Board member and owner of the Loon Café in Minneapolis, Tim Mahoney; MLBA and MMBA lobbyist, Joe Bagnoli; Teamsters representative; Dalheimer Distributors; Capitol Beverage Sales; Minnesota Restaurant Association; Minnesota Grape Growers Association; and the brewers.  The majority of the testimony in support of the bill was from social agency and county agencies addressing issues related to chemical dependency.  No vote on the bill was taken.


General Legislative Update

The House and Senate budget committees and divisions held long hearings, many into the night, as they worked to assemble budget bills. The third committee deadline, when all budget bills must be through the committee process looms, at the end of next week on Friday, April 19th.

Taxes: On Thursday, the Senate Tax Reform division rolled out a major tax proposal, which includes many of the provisions originally proposed by Governor Dayton, but later withdrawn by the Governor. Included in the Senate proposal is a move to reduce the state’s general sales tax rate to 5.677%, down from the current 6.5% rate. The bill also reduces the Constitutional Amendment sales tax rate from .375% to .323%. Making the overall sales tax rate 6.0%, down from 6.875%. The Senate tax plan would tax clothing over $100, and expand the sales tax to tattoos, over-the-counter drugs, dance lessons and other things. Although much of the Senate’s proposal was originally included in the Governor’s budget bill, the Governor’s office stated that he is not interested in supporting the Senate’s sales tax proposal. On the same day the Senate released this tax plan, the Minnesota Management and Budget department announced that the state collected 6.0% – or $145 million more than projected in the February Forecast. Receipts from each of the three major taxes exceeded projections. This announcement had Republicans in the House and Senate questioning the need for tax increases in the omnibus budget bills. The House Taxes committee is expected to release its omnibus tax bill next week.

Stadium Financing: Just when it seemed like the debate over a Vikings stadium was done – it has resurfaced at the Capital with the focus on the funding source. The 2012 legislature passed the bill to build a new stadium for the Minnesota Vikings and provided that the revenue source for the stadium would be implementation of electronic pull-tabs, to be operated by bars and charitable gaming organizations. However, the actual revenues that have been generated are falling far below the projections. The first payments due by the state are scheduled for August 2013. Many legislators are expressing concerns that if electronic pull-tab revenues do not pick-up, the state’s general fund will end up paying for the stadium. As a result, a proposal has surfaced this week to implement a sales tax on professional sports memorabilia, jerseys, etc. and a sales tax on luxury box suites. These new taxes would be used to cover the gap in the stadium funding. The proposals would be included in an omnibus tax bill at some point this session. The major league sports teams expressed opposition to this proposal saying that their fans should not be charged for a new Vikings stadium.

Transportation funding: The House and Senate Transportation Finance committee chair’s (Representative Frank Hornstein and Senator Scott Dibble) were preparing to release their plans for increased transportation funding this week when Governor Dayton threw them for a loop. During a press conference, Governor Dayton was asked a question about his support for a gas tax increase. He replied that he does not support a gas tax increase and that he believes the public also does not support an increase. This created a set-back for the House and Senate Transportation committee chairmen as they were both planning to roll-out transportation funding bills to include an increase in the gas tax for highway projects and an increase in the sales tax for transit funding. As a result, both the House and Senate have proposed omnibus transportation bills with a “status quo” level of funding. At the committee hearings on these bills, a long line of both highway funding and transit funding advocates lined up to testify and express their disappointment in the lack of new and increased funding for transportation.

Next Week: The House and Senate are expected to begin passing the omnibus budget bills on the Floor’s of each body next week. Committee debate and work will continue on other budget bills and the House is expected to unveil its tax proposal. A Saturday Floor session is being rumored for the next of next week.

If you have questions or comments, please call us at 651 772 0910