Legislative leadership and Governor Tim Pawlenty emerged from the opening round of budget negotiations with general agreement on...not much.

At its simplest, the negotiations deals with how the state should solve a $935 million budget deficit. All three sides (House, Senate, and the governor) have come up with different ways of doing this. The Senate closes what it calls "tax loopholes" and raises the statewide property tax on commercial industrial property. The House wipes out the foreign royalties deductions, eliminates provisions benefiting foreign operating corporations, and imposes additional taxes on companies operating in certain "tax havens." The governor makes cuts across all state programs, and uses budget reserves, and surplus money in the health care access account.

Read the Star Tribune and Pioneer Press articles.

While much of the attention at the Legislature is usually focused on items with a fiscal note - that is, those that impact the state's budget - policy bills deserve no less careful a look.  

The Education Policy Bill, expected to be up for debate on the House floor next Monday, contains two provisions that would undermine Minnesota's efforts to close the achievement gap:

• The proposed local graduation appeals process allowing school districts to grant diplomas to students who fail to pass the state's new high school graduation tests.
• The proposed student growth formula reporting school performance relative to statewide averages of student performance rather than state expectations for grade-level learning.  

To help our students and our state compete in a global economy, we must close the achievement gap in Minnesota - and raise academic achievement to world-class levels. The GRAD appeals process and proposed student growth model do not support those goals, and in fact would weaken them.

On Monday, the Minnesota Chamber and the Minnesota Business Partnership sent a letter on behalf of the statewide business community to the lead legislators and House leadership working on these issues. These provisions were NOT included in the Senate bill that passed yesterday.

A House division heard a plan Tuesday to modify the school finance system and create a new education funding framework. Rep. Mindy Greiling (DFL-Roseville) said she hoped the bill, HF4178, would be considered first thing next year. No action was taken after the bill was heard by the House K-12 Education Finance Committee. A companion bill, SF3828, sponsored by Sen. Terri Bonoff (DFL-Minnetonka), awaits action by the Senate Finance Committee. Read more from the House.

Transportation:

• Minnesota House and Senate lawmakers still don't agree on the proper way to compensate victims of the I-35W bridge collapse, but some legislators are optimistic they will reach compromise before the session close on May 19. Read the Sun Newspapers article.

Employment:

• There has been a lot of recent activity surrounding employment, labor relations, unemployment insurance, and workers' compensation. The Minnesota Chamber of Commerce Labor-Management newsletter provides a brief synopsis of these activities, which it has been tracking and monitoring. If you have any comments or feedback regarding these bills, please contact Dave Dederichs at 651.292.4682 or ddederichs@mnchamber.com.