GOP legislators’ focus turns outstate

ST. PAUL -- If rural Minnesota lawmakers get their way this session, a lot more taxpayer dollars soon will start flowing out of the seven-county metro area and into the countryside.

Rep. Dave Baker
Rep. Dave Baker, R-Willmar, is seen in this January, 2015 file photo. “We just want to make sure that greater Minnesota isn’t being shortchanged," Baker said recently in regard to efforts to spread the state's money equally among metropolitan and outstate counties. (FORUM NEWS SERVICE/File)

ST. PAUL - If rural Minnesota lawmakers get their way this session, a lot more taxpayer dollars soon will start flowing out of the seven-county metro area and into the countryside.
The new rural-dominated House Republican majority is putting outstate issues at the top of its agenda, and greater Minnesota lawmakers from both parties already have proposed ideas for spending most, if not all, of the state’s projected $1 billion budget surplus.
They probably won’t get all that money. Their proposals are wish lists, and they know they won’t get everything they want.
Twin Cities-area leaders acknowledge rural districts aren’t getting their fair share of some state programs. But they warn their “country cousins” not to go overboard.
The majority of Minnesotans who live in the Twin Cities area pay nearly two-thirds of the state’s taxes and receive just over half of the state’s spending. Meanwhile, non-metro taxpayers chip in slightly more than one-third of the revenue and get nearly half of the state aid.
“The seven-county metro area is the economic engine of the state, so don’t do silly things to punish the metro,” said Matt Kramer, president of the St. Paul Area Chamber of Commerce.

“In the words of the immortal bard: Don’t shoot the goose that laid the golden egg.”
Rural issues moved to the Legislature’s front burner this session after 10 Republicans defeated House DFL incumbents in outstate districts in the November election, giving the GOP the majority.
They campaigned on a theme that “greater Minnesota was left behind” under one-party DFL rule the previous two years.
Twin Cities and rural legislators have been squabbling over how to split up state tax dollars for decades. But now the debate is hotter.
Still, some new outstate Republican lawmakers insist there’s no deep urban-rural split.
“We just want to make sure that greater Minnesota isn’t being shortchanged,” said Rep. Dave Baker, a first-term Republican from Willmar.
Jobs, economic development

Rural Republicans’ top goal is to grow more good-paying jobs by attracting and retaining businesses, said GOP Rep. Bob Gunther of Fairmont, chairman of the newly created Greater Minnesota Economic and Workforce Development Policy Committee.
“We want to enjoy the growth and prosperity that the metro area has enjoyed, and we want to become a viable partner with them,” Gunther said. “I certainly don’t want to take away from them. In fact, anything I can do to enhance the metro area, I certainly will do and always have done.”
The economy in parts of rural Minnesota lags far behind the metro area. While the state’s unemployment rated dropped to 3.6 percent in December, joblessness still ranged from 6 percent to 10 percent in some north-central Minnesota counties, the state Department of Employment and Economic Development reported last month.
While all seven metro counties gained jobs in 2013-14, 32 of the 80 outstate counties lost jobs, according to figures compiled by Minnesota Compass from DEED and U.S. Census Bureau data.
In metro counties, median household incomes ranged from $54,000 to $86,000 a year, compared with less than $50,000 in most outstate counties.
Not all of greater Minnesota is hurting. Regional trade centers, such as Mankato, Rochester and St. Cloud, are doing better economically.
But “deep rural” towns, those more than 25 miles from a regional trade center, are struggling, said former Republican House Speaker Steve Sviggum, a farmer from Kenyon. They lack the jobs needed to keep young people from leaving, can’t find workers trained to fill the skilled jobs that do exist, need more affordable housing for workers and are straining to care for a growing senior population.
Not to be outdone by House Republicans, a group of rural DFL senators last week announced a $232 million package of ideas to train more workers for outstate businesses, subsidize worker housing, provide more rural public infrastructure and expand broadband access.
Their main goal is to “stave off” the outmigration of young people from rural Minnesota to the metro area, which “has been catastrophic almost in the last 25 years,” said Sen. Tom Saxhaug, DFL-Grand Rapids.

Gov. Mark Dayton and almost all DFL and Republican lawmakers want to pump more money into schools this year. The governor has proposed spending nearly half of the state’s $1 billion surplus on new education initiatives ranging from pre-kindergarten to college and universities.
But there are fundamental differences among the power brokers over which school investments pay the highest dividends.
For rural Republicans, one big issue is a teacher shortage. “Albert Lea can’t find a high school English teacher to hire,” said GOP Rep. Peggy Bennett, a longtime elementary school teacher in that community.
An underlying problem for outstate schools, Bennett said, is a state-aid formula that pays them less than schools in the metro area. That means rural schools can’t pay teachers as much, so they have trouble hiring and keeping them.
Greater Minnesota schools receive $1,391 less per pupil from the state than districts in the metro area and $3,600 less than the Minneapolis and St. Paul schools, according to the Minnesota Department of Education.
Those disparities are based on an assumption - a fallacious one, Bennett said - that the cost of living is significantly higher in the metro area. While housing is more expensive in the Twin Cities, the costs of food, transportation, heating and most other necessities are comparable, rural legislators contend.
Under a complicated school-aid formula, metro schools receive an additional $50 per pupil in something called “equity revenue.” Bennett is supporting a bill introduced by Baker, the Willmar Republican, that would provide an additional $50 per pupil to outstate schools.
“I’m not taking anything away from metro districts. I’m just trying to see that rural students get (equal treatment),” Baker said. His bill would cost about $8 million over two years.
DFL lawmakers are welcoming the new Republicans to their effort to reduce the funding gaps. “In the last two years, we reduced the disparities between the highest- and lowest-revenue districts by almost one-third,” said Rep. Paul Marquart, an education finance authority from Dilworth.
From 2003 to 2013, the state funding disparity between the richest and poorest districts grew to 31 percent, the Education Department reported. Because of changes Dayton and the DFL-controlled Legislature passed two years ago, that disparity will drop to 18.5 percent next year.
One major reason for the inequity is former Republican Gov. Tim Pawlenty’s pet “Q Comp” program, which gives money to school districts that agree to tie teacher pay to their performance, said DFL Sen. LeRoy Stumpf, a school finance expert from Plummer. Q Comp provides schools an extra $260 per pupil, but most of the 50 school districts that qualify are in the metro area; very few rural schools get it.
“If anybody is looking to close the disparities between greater Minnesota and metro schools, I think they should build on what we did over the last two years,” said House DFL Minority Leader Paul Thissen of Minneapolis.

Finding more money for Minnesota’s congested and crumbling transportation system is a top priority for DFLers and Republicans, urban and rural policy makers alike.
Last month, Dayton called for hefty tax and fee increases in a plan that would funnel more than a billion dollars a year into critical improvements to roads, bridges and bus and rail transit over the next 10 years. The Senate DFL majority is backing a similar plan.
But House Republicans are taking a more modest approach. They proposed using part of the surplus, dipping into Department of Transportation reserves and finding efficiencies in MnDOT operations to generate an additional $750 million for roads and bridges over the next four years. That, they contend, would buy time to figure out a longer-term solution.
In other words, everybody agrees they need to spend more on transportation, but the two parties are far apart on where to get it.
Caring for the elderly, disabled


Dozens of rural Minnesota nursing homes have closed over the past decade because they don’t receive enough state money to pay the salaries they need to attract and keep qualified workers.
Nurses are snatched up by hospitals that can pay more, and nursing assistants can collect bigger paychecks, plus less stress, by working for big-box retailers or small manufacturers. As a result, there’s a shortage of long-term care workers in rural areas.
This year, many nursing homes are at a breaking point, said Republican Rep. Joe Schomacker of Luverne, chairman of the new House Aging and Long-Term Care Committee.
As a result of their plight - plus rural Republican candidates making it a big issue last fall - long-term care for the elderly and disabled is one of three top priorities for DFL and GOP lawmakers this year, along with education and transportation.
Schomacker is carrying a bill, sponsored in the Senate by DFLer Tony Lourey of Kerrick, that would increase nursing home payments and reform the way they are paid. Schomacker said the new payments would reflect the homes’ actual costs and boost payments for meeting new quality standards.
This is a big issue in rural Minnesota because the state pays its nursing homes far less than those in the Twin Cities. It’s also a big deal there because the nursing homes often are among the largest employers in small towns.
The state currently uses a three-tier payment system that reimburses homes in 24 high-population “metro” counties at a rate that is 12 percent higher than those in 30 sparsely populated “deep rural” counties, according to the Department of Human Services. Homes in 33 “rural” counties in a mid-population range are paid 10 percent less than the metro rate.
Schomacker’s bill would scrap the three-tier system and boost payments to deep rural homes.
“It doesn’t cost much less to take care of a senior in Marshall or Willmar than it does in Wayzata,” said GOP Rep. Baker, a co-sponsor on Schomacker’s bill.
Schomacker hasn’t yet put a price tag on his bill, but nursing home advocates estimate it would cost at least $200 million over the next two years. It also would increase funding for assisted-living facilities and home-based services for the elderly.
While the measure has bipartisan support in the Legislature, Dayton isn’t on board. He didn’t propose any additional money for nursing homes in the budget that he proposed last month.
He noted that the 2013 Legislature gave nursing homes a 5 percent funding increase that year and an additional 3.2 percent raise that will take effect in October. But he said he would consider boosting their payments if the economic forecast scheduled to be released Friday predicts a larger budget surplus.
Farm taxes

With farmland property taxes soaring, rural lawmakers in both parties have added property tax relief to their priority lists.
After DFLers increased state subsidies to buy down property taxes in 2013, overall taxes on owner-occupied homes dropped 5 percentage points last year, and business taxes remained flat.
But with agricultural land values rising 24 percent to 26 percent, farm property taxes shot up between 6 and 10 percent in 2014. Another steep increase is expected this year.
“We have a double-whammy where farm commodity prices are going down at the same time that property taxes are going up,” said Rep. Marquart, the lead DFLer on a House property tax subcommittee. “I think everyone recognizes this is a big issue.”

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