 Lakeland Currents, your public affairs program for North Central Minnesota, produced by Lakeland PBS with host Bethany Wesley. Production funding for Lakeland Currents is made possible by Bemidji Regional Airport, serving the region with daily flights to Minneapolis-Saint Paul International Airport for information available at memidjiairport.org. Closed captioning for Lakeland Currents is sponsored by NISWA Tax Service, tax preparation for businesses and individuals, online at NISWATACS.com. The Minnesota Legislature will convene for its regular session on Tuesday. Legislators will come together in St. Paul as the state faces a projected deficit of $188 million based on a November economic forecast. An updated forecast is expected later this month. Tonight, I welcome to our table two area legislators to discuss some of the issues and topics expected to be debated and perhaps acted upon before the May 21st deadline. Representative Matt Bliss, a Republican from Pennington, represents District 5A. He is a small business owner serving his first term and will be up for re-election this fall. Bliss is the vice chair of the Veterans Affairs Committee and also serves on the Environment and Natural Resources Policy and Finance Committee, the Government Operations and Elections Policy Committee, and a subcommittee on mining, forestry, and tourism. Senator Justin Eichhorn, a Republican from Grand Rapids, represents District 5. He also is a small business owner who served in his first term but as senator will not be up for re-election until 2020. Eichhorn is the vice chair of the E-12 Policy Committee and also serves on the following committees, Capital Investment, E-12 Finance, Environment and Natural Resources Finance, and Environment and Natural Resources Policy and Legacy Finance. Welcome, thank you for coming. Thanks for having us, this is a great opportunity. Our intention today is to kind of look forward to the session that is coming, what people can expect to hear about and hear kind of debated, but then also as a part of that we'll probably touch on some of the things that were done last year. So, first things first, I'm sure in your eyes is you guys need a budget. Absolutely, if we don't, at least on the Senate side, if we don't get funded by the end of February, the Senate's gonna pretty much be out of money. We borrowed some money from the legislative coordinating committee in order to get to this point, but we do need Governor Dayton to approve the legislative budget in order to continue on, otherwise the session will probably end up having to stop, but I think there's a pretty favorable chance that we do get a budget signed. That'll be the first order of business though. Were you worried or were you surprised when he vetoed the budget last year? I was surprised, he had agreed to all the items that were in the budgets, and at the last minute he decided to veto our numbers, which really kind of put our staff, our full-time staff, both partisan and nonpartisan, kind of an awkward situation, didn't know how long their jobs were gonna be there, and as a result, we had quite a bit of turnover in the House, I don't know how the Senate did, but we had a large turnover of people. But you guys were able to keep going, right? Because you found other funds to kind of keep you afloat until you can pass hopefully the budget then. Yeah, that's correct, correct. It's kind of a skeleton cruise, so to speak, and that's why the Senate didn't do their bonding, capital investment tours throughout the summer. We are working on those now, serving on that committee, and I'm actually doing that next week. We're on our last little day of our tour, so we are able to see some of those projects that are important to the state, and we were able to come through, put midgy here a couple weeks ago, and we had a really great capital investment tour here. Cool, all right, so let's start moving to some of these topics. The first one we'll talk about is probably a big one, taxes. Last year, your tax bill, if I remember correctly, was almost 650 million, right, in different savings over the next two years. But this year, there's going to be some discussion in terms of how to manage the code in response to the federal. Correct, a tax conformity bill. Okay, so tell me, what are you hearing? What are you expecting to kind of be the main points down at the Capitol? Well, I would say that a lot of people were saying Minnesota was kind of a leader in some tax reform. It was a couple decades since we had done tax reform in the state of Minnesota, and we made a lot of big gains last year. I mean, we got, for social security income, for tax credits for students, money, and payment and move taxes, and Indian Child Welfare Act to help the counties. Small business owners. Small business owners. So we did a lot of really good things. So the state of Minnesota really led, and from what I've been hearing, they would like us to continue to be a leader. We need to, at the bare minimum, conform with the federal government. Otherwise, we're going to see some tax increases. Most likely, considering that Governor Dayton doesn't like tax bills, that was part of the reason our funding was vetoed is he didn't like the tax bill. I don't think we get any farther than that personally, but I think there is some desire from members of both sides of the aisle to try to maybe push it a little farther and put that money back in Minnesota's pockets so that way we can continue to grow our economy, because even though we see the economy growing a little bit nationally, it hasn't jump-started as much as it has in other states, and I think there's probably some things we can do to help that along. One of the numbers that we've heard is the Minnesota Department of Revenue says that tax collections will grow by nearly $850 million in two years if no change is made to the policy, correct? Yes. So your goal is to change it so that that decreases? We want to make sure that the people in Minnesota aren't negatively impacted by the federal cuts. One of the things that the federal government has done is make the tax credits or your withholdings, your personal exemptions. They've doubled them, but they've taken away a lot of the deductions to make up for it. And unfortunately, I heard yesterday from a farmer, if he trades in a combine, he gets a $100,000 trade-in, he has to now record that as income, which isn't a big deal because under the new federal policy, he can take 100% of that back off of his income, but on the state level, that doesn't come off of that. So that could negatively impact him. And that's what we have to look at, is to make sure that the good tax cuts that we're putting in place in Washington don't negatively impact us. And we don't need the extra $800 million right now, so we should make sure that it impacts Minnesota as least as possible. You say that, well, I mean, at this time, I know we're expecting a new forecast soon, but you do have a deficit. I mean, you are looking at a deficit. Do you worry about cutting them back to the point where that will increase? I don't. The last two months have come back over projections. I think we'll be just fine. I think that the tax cuts that we made last year and the President's tax cuts are starting to take effect and I think we'll be just fine. And I think you're gonna be surprised pleasantly at the next forecast. Similar feelings? I completely agree with that. I do think we're probably gonna be in a surplus, maybe not a lot, but I do think we're gonna have a much better forecast. I agree with the points that Representative Bliss made. We had some strong indications that it is gonna be better and I'm hopeful for that, but we'll see when the numbers come out. One of the things I wanna kind of pull out from last year is there was an increase to local government aid. You had an increase of about 15 million. You are hearing from some cities and some lobbyists that they would like to revisit that and have that go up again this year. What are your feelings on that and are you hearing from that? Is that something you're open to? I can tell you that that's something I worked on last year and that's something that went through our tax bill. That's a thing that a lot of people don't realize that tax bills aren't just about tax cuts. It's sold as, oh, it's tax cuts for rich people or whatever, but there's a lot of other pieces at least in the Minnesota tax bill that go into that. There's the local government aid went in there, the county program aid was in there, the Indian Child Welfare Act money was in there and on and on. There were several things that helped fund local governments. I think there is some desire to continue to help local governments, especially in greater Minnesota. There's some disparities between what greater Minnesota communities get and the Metro communities. So there is some desire in both chambers, I think, to continue to further that. It's just how much can we do, again, going into this tax bill that we're gonna try to put together this year. If we go much beyond that conformity, we run into the point where Governor Dayton's not willing to sign it just because he has a distaste for tax bill. So it's hard to say for sure, but I do think there is possibly an opportunity, it's just a little smaller this year than in years coming forward. Because I think what we've heard, or what some of you've been reading, coalitions asking to try to go back to those 2002 numbers and other, I think it's 30 and a half million, something like that. But you're saying you think it's probably a non-starter for this coming session. I don't know about a non-starter, the appetite for that kind of a bill is probably not there right now. And if you look at the history, 2002 was the absolute peak. Of course we wanna get back to the absolute peak, but it has been growing over the past few years. And I think we're gonna make steady progress on it. Whether or not it's the 2002 levels, we'll wait and see. The discussion, either way, the discussion will certainly be there. It's just how far we can actually take it, yeah. I wanna talk about bonding. It's an even numbered year, which usually is your big bonding year. Last year was an odd year in that you still had a bonding bill, but that was because it didn't get done the previous year. So you're back to a bonding year. So last year you had about nearly a billion dollars in roads and bridges and some local projects, wastewater drinking systems. What are you hearing this year? We just had the bonding group up here to look at BSU specifically. A couple weeks ago, we did the Veterans Home here as well. A lot of excitement around that project. And then we did the other side of the district about a week ago, and I mean, throughout Senate District Five, there's a lot of priorities, and we saw a lot of those. There's a lot of needs around Heaper, which is like asset preservation for the colleges. There's a large desire to help smaller communities in Greater Minnesota with wastewater treatment needs, as you mentioned. The city of Deer River has that. So we'd be looking forward to help them with that. But on the bonding, it's really interesting to actually be on the committee. I've kind of referred to it sometimes as the wants and needs tour. We've seen a lot of swimming pools and civic centers and gymnasiums, which don't not have merit, but there's a lot of projects like the Veterans Home that we should really be looking at that really serve a regional and a statewide significance that really matter to a larger portion of the state. And I think that's some of the intention of the bonding bills, because ultimately, our kids are gonna end up paying that debt that we're taking out to build some of these projects. So we need to be mindful of that. And the price take the governor came out with with one and a half billion, I think is a little bit high. In order to get some of the Republican members to go along with it, it's gonna need to be under that billion dollar figure again. But sitting on that committee again, I think there's a large desire to do some things in higher ed and to help smaller Minnesota communities out with the wastewater treatment type stuff. So Dayton's bill, from what I understand, had a lot of emphasis on college and investments in that way, and less so on local projects. So how do you feel about that? Well, you know, my main focus obviously is the Bemidji Walker area. And I know part of the projects that we have proposed up here is the Hague Sour Building and BSU. And I think, I believe that's number two on the men's states priority list. And I think that's really gonna go through. You know, last year we tried to make it geographically balanced and heavy on infrastructure. And I think that's kind of what we're gonna focus on again this year, and like Justin said, you know, try to keep it at a billion or under. You know, if you look closely at the governor's numbers, there's a lot of just numbers, 100 million for this. And it's just kind of a gray area that he just threw a number at. So I think we can whittle away at that quite a lot. And I don't think there's a lot of difference in the numbers really. I think he padded it anytime you go into a negotiation, you wanna pad a little bit to give away something. So I think I really have a good feeling that we'll come through with something this year. But you have a good feeling about getting some of those local projects in as well as the statewide. Both Matt and I are advocating heavily for those projects. So I think we have a very good chance to get those in our bonding bill, especially the veterans home. I wanna mention, because we've talked about Hague Sour, which is 22 and a half million for Hague Sour and then some other buildings. But then also you have Red Lake, right? Red Lake is looking for some money for a school improvement. And that would be Matt Grosl's district. So that would be a project he's been pushing. So I don't know a whole lot about that project. Okay, sounds good. All right, then let's move on toward transportation. So last year you had 300 million per road and bridge projects. Last year in your hearing, of course, people always want more. So what do you expect for transportation in terms of, do you think there'll be anything to even discuss or no, you said maybe just sticking to that conformity for tax issues? Well, on tax issues, it's gonna stick to conformity. I don't think we're gonna, we're not gonna raise any taxes. That's definitely a non-starter, at least in the Senate, I assume it is in the house as well. But we do need to make sure we continue to dedicate those funds. Like last year we dedicated some, the sales tax from like auto parts and stuff like that to make sure that went towards transportation. I think we need to make sure some of that is permanent. We need to make sure some of the additional like auto, tax you pay when you buy your vehicle, that kind of stuff is always dedicated towards roads and bridges. We see that in different agencies like in the DNR where you buy your fishing license, it goes to fishing, you buy your deer hunting license, it goes to deer management and stuff like that. I think the intention of a lot of the taxpayers in Minnesota is that we use that money to go towards our roads and bridges and we've unfortunately rated those funds for many other things. So I think we need to get back to that as a starter. I know a lot of people would like to talk about additional gas taxes and stuff like that. It's a non-starter for now. I think that disproportionately affects lower income individuals and you know, being that our economy hasn't fully recovered yet, I don't think that's a place we want to go at this point, not a place I'm interested in going. So yeah, we need to dedicate some more funds. There may be some funding in the bonding bill for transportation. I don't know what that number looks like because there's a lot of competing projects but there will definitely be something in the realm of transportation. Okay. And I think we really want to have the Department of Transportation focus more on congestion and not, you know, maybe put bike paths along an artery. You know, let's focus on the congestion. Those are the people that pay the taxes for the roads. Let's make sure that goes for roads and congestion relief. Do you believe it's hard to kind of get that balance between metro and rural projects when it comes to transportation? Do you feel like that's something that, you know, is always kind of an uphill battle? I mean, we always hear, you know, media Southwest, you know, light rail, light rail, light rail. And up here, probably not gonna affect us much. So how do you go about having those conversations? Well, I was looking at an interesting thing. I was actually looking at this earlier today at what light rail costs compared for a mile compared to like what a mile of four lane highway costs appear. Light rail is about a hundred million a mile. Up here, it's about 225 to 250,000 a mile if you're gonna build in Beltrami or Cass or Itasca County. So we could put in over a hundred miles of four lane road in Greater Minnesota for one mile of light rail. So I'm glad this last year we kind of peeled back on the light rail stuff. Greater Minnesota is not gonna be paying for that anymore. But to get back to your question more, there is definitely a fight between what the Metro gets and what Greater Minnesota gets. And Matt and I are definitely fighting to get some more money up here. With the way the leadership is now in the house in the Senate, you've got Senator Gizalka who's a Greater Minnesota Senator, who's the majority leader now. You have Kurt Daut, who's a Greater Minnesota representative. So they do have that greater focus on Greater Minnesota, which greatly benefits Bemidji, Grand Rapids, all of our communities up here. So it is getting better, but there's more work to be done. One of the other things that we've seen in recent weeks is the possible revisiting of toll roads and kind of looking into that a little bit further. Right last year there was an order that MnDOT kind of study those toll road systems. And now that first report's out and now he's kind of turned it over to you guys to decide if it should be investigated further. Is that something that you've heard a lot of discussion about yet or probably not? I haven't heard a whole lot of discussion about it. You know, I lived for a while when I was in the military in Virginia Beach and they had toll roads down there. You know, I can see some benefit to them, you know, especially on the main thoroughfares through the city where don't take up the main arteries, but if you're gonna build more lanes, have them toll roads and have them pay for them that way. So I'd be open to the discussion. I'd have to look at the finances and the numbers and just, you know, I'm open to the discussion. And that's something I haven't heard anything additional yet. Maybe when we get into session they'll talk about it, but it's not something that's really come up in our realm yet. Yeah. Let's move forward to education. Last year there was a lot of movement on education. So were you pretty proud of what was accomplished? I mean, do you think that's kind of what you wanted? I was very proud of what was accomplished. I was very proud as well. The teacher licensure reform was absolutely huge. Again, for Greater Minnesota, now it's a tiered system. There's gonna be a new teacher licensure board that's, people are getting appointed for that now and we're gonna go through a confirmation process for some of that. But it's really gonna allow schools in Greater Minnesota that have a hard time recruiting teachers to have some other options. It's gonna allow people that maybe they went to school in North Dakota and didn't get their degree in Minnesota. Now it's gonna give that person an opportunity to come back to Bemidji, come back to Grand Rapids and have an easier time getting into a school here. It should help solve some of our teacher shortages. So I was actually really excited about the final product of that bill. It started being worked on before Representative Bliss and I even got elected. But we got to be able to be involved in some of the discussions throughout session a little bit last year to help tweak it. And I think it was a really good product that came out. And the additional funding that we got for the schools, the two and two, that helps out a lot. It was 2% over two years of 2%. Correct. So it ends up being like, what is it? 245 a student, I think, at the most or something. Yeah, I think I saw numbers, Bemidji got 3 million. 2.7 million for Bemidji. Castley, I think got 670 plus, 670,000 plus. Walker, Hackensack, Akely was 360,000. That helps a lot. And even the Transportation Sparsity Bill that we fought for in the House and Senate, that helps out Bemidji a lot. It was a drop in the bucket, but it's a drop and it's starting and it's a permanent part of the calculation now. So it'll always be added to or could always be added. I wanna talk, just make sure that we said what it was. Okay, so that's like where these school districts, Bemidji in particular, so large that they actually lose money transporting their kids versus the money that they get from the state. Right, the way the old calculation worked is that Bemidji, I believe it was Roseville, the school district they used. Same number of students, much smaller, more compact area and Roseville was actually taking money from their transportation budget and using it in their general fund where Bemidji had to take money from their general fund because they have such a large area to transport. So what we did is I believe there was 80 schools in Minnesota that that was affecting and we went through and we tried to get the whole number in there, but of course as time went on it got whittled down. I believe we were at 18% it was the final number. So that's where we started. But you're saying that because it's an actual line item in the budget that it's not a one-time funding. In the past they've gotten a one-time funding bump but then the next year it was gone. What we've done is it's there permanently and according to the people that I've talked with in the school district that's something they've been working on for 10 years or more and we were able to, and it was a fight. It was a fight to get it in there. Was it uphill? Yeah, it was. It got, it was in and out and in and out and it finally ended up in in the last minute but yeah that's something we both fought hard for being on education. I was able to be in the room for some of those discussions to make sure that that stayed in there because that was, I think the two and two was probably one of the biggest things we heard from school districts overall but in Bemidji it was the transportation was probably just barely above that. Is that one of the topics though that kind of highlights kind of, I don't want to say gridlocked down at the state capitol but some of the problems. Like you have this, it's pretty obvious, right? You have winners and losers from the transportation budget system and yet you have legislators that don't necessarily want to give up the money because it impacts their district. So how do you kind of navigate that? How do you cross those hurdles? You gotta be bullheaded and you can't take no for an answer and that's one thing I learned. I'm a nice guy and I went down there generally trying to be a nice guy and sometimes you have to stick your head into a room even though they don't want to see you and you have to repeat what you've already told them through four times. I would agree with that sentiment and it's just that that entire job is about building relationships and in an education being on both of those committees I spent a lot of time outside of our committees going to have lunch with the chair of the committee that kind of thing to continue to let them know what's important to us up here and those little things go a long way and so those are areas we tried to work hard on to make sure that we could get things like this transportation to stay in there. All right, we touched on this a little bit earlier in the bonding bill but I kind of want to pull it out because it's such a big issue out here and that's the veteran's home. We've actually done a full show on it so you made some progress. Do you feel like you made progress? I think we made a lot of progress. The governor's now addressing it when he puts out his budget for the bonding bill he specifically mentions the reason there was no veteran's homes in there. Because it wasn't funded by it but he had kind of pointed to it. Well, we had initially put it in the last state finance bill and it was removed at his request and it had been in versions of bonding bills in the past but it's actually got both leadership's full attention and it's gotten attention from the governor now as well. Okay. I think the governor's comment was they didn't have a location yet which is a little bit offensive to people in this community and I completely agree with it because they've been working hard on this project for about 10 years. They're ready to put shovels in the ground as soon as they get their money. I mean, this project is ready to go and it's a great project of great regional and state significance. I think we've probably made more progress and I hope Matt agrees with me in the last year than probably the previous eight years. I think there's probably a better chance than ever to actually see that veteran's home be included in a final bill. There's a desire from both bonding chairs to see that there's a veteran's home in the bill. So it's probably gonna end up being just like the transportation we just talked about. It's gonna be a fight till the end but you know, I would say it's probably a number one issue. They say, oh, the veteran's home, yeah, we know. And that's good. We're gonna keep that pressure on because it's, I would say it's number one issue for me and I believe it is for Representative Bliss as well. Absolutely. Let's move on to MINLARS which stands for the Minnesota Licensing and Registration System. Kinda turned out to be a little bit of a rocky launch for that. So it started off, it was gonna cost 93 million and now it's going to cost an additional 43 million. So what do you do with that? Well, that's what they're requesting is another 43 million. We're actually requesting, that's another one of those swag numbers. I believe that the government comes up with once in a while. Once we actually start asking for details, the numbers magically goes down. You know, first before I get into any of the details, I wanna shout out to those county registrars over there that put up with it and have been doing it for a while now. For us as a state to put them in that situation is just incomprehensible and unforgivable. This project's been going on for about nine or 10 years now and they said, the project manager for that project said it was green, it was gold, let's throw it out there and it fell flat. And one of the comments I heard just recently and it kinda stuck with me is we didn't think there could be another project in the state that made Minsher roll out look good. And this is, I have an IT background. I'm a certified project manager in IT so this just kills me to watch what's happening with this. And the lack of response that we're getting from certain people, they put in a website now for comments that is actually the registrars can load particular problems and they do get addressed. So they're working on it. There's some people down there that are actually working on it. Do you feel like though that there's a path to fixing it? The path needs to be more than just money, that's for sure and I know I'm not on transportation as you mentioned but I think they are really drilling down. The Senate actually set up a website for people to go and actually put in their comments about it. I think there's a larger issue here and I think there's probably a leadership issue at that state agency. And you had mentioned the shout out to the deputy registrars, but I would say the dealers as well. I mean, there's a lot of dealers that are having a very, very tough time and it falls back on their hands because the consumer assumes that it's their fault when it's really not and we've created this terrible issue in Menlar's as a state and I think there is a pathway forward and we're definitely working on it but there's gonna be a lot of discussion around that this year. So as we get to our final minutes here, I do wanna just ask, what did you learn last year that's really going to help you? Do you think moving forward in the weeks and months to come here? Well, I can tell you just for myself, one of the things I learned is you have to advocate yourself for your priorities and people down there have different priorities. It's not that they're bad people or trying to take stuff away from you but their priorities are different than yours. So if something's important, you have to go, like I said, stick your head in the door where you're not wanted and you have to become that squeaky wheel and that's what I've learned. Making relationships down there, like you said, going to lunch with different legislators, even on the other side, it's really powerful if you can get a bill with bipartisan support and it's just making relationships and becoming a lobbyist for your area. I can certainly agree with Matt's sentiment and I think the same thing and for me, one thing that was really surprising when I got elected, I always thought it was going to be Democrat versus Republican butting head and it's not that at all, it's rural versus metro. Of course, I work great with Representative Bliss and Senator Rutke and Representative Grossel over here were all on the same side but on the other side of my district, it's the edge of the Iron Range. So I'm the farthest northeast Republican so on that side of the district, I'm working with Senator Tomasoni and Representative Metzah and some of those guys and it's been important to build relationships with them being part of the range delegation and understanding their issues. There's a lot of areas we're able to come together on because our areas are so similar in so many ways that again, it's back to relationship building. That's really what this job is, is building relationships and I've been working very hard on that throughout the last year just to make sure that keep building and fostering those so we can get stuff done that truly is good for the area and not what is good for partisanship. So. Well listen, I want to thank you guys for coming on and talking with us, let us know what's coming up in the weeks and months to come. I want to thank you for tuning in and I also would encourage you to take advantage of using these email addresses on the bottom of the screen because these two men represent you and they'd like to hear from you. So thank you for tuning in. Please join me next time.