Sen. Claire Robling Email Update

A Flurry of Senate Activity Before the Easter/Passover Recess

Over the course of the last ten days of March, the Senate passed off the floor a total of 13 major tax, spending and bonding bills. I must say, it was a terribly hectic pace, but at least the bills have made it this far in the process. Most companion bills still await action by the House, which will also mark the beginning of the conference committee process to negotiate differences between Senate and House bills. I’ve included below a recap of the Senate proposals. You may not be interested in all of them, but you can always scan the headings and decide which ones you want to read more about. Since we’re on our spring break, I won’t have another e-newsletter for about 10 days. Have an enjoyable holiday weekend.

Last week’s activities:

Higher Education Bill
On Thursday, March 22, Senate File 1989, the comprehensive budget and policy bill for higher education, was passed out of the full Senate and sent to the House of Representatives. However, preceding the lopsided vote on final passage were lengthy debate and split votes on several amendments, all of which were defeated.

Several members of the Senate questioned the adequacy of the funding provided for a state version of the federal "GI Bill," and proposed doubling the amount from 10 to 20 million dollars in order to meet the estimated demand. Another amendment attempted to remove provisions in the bill that would provide in-state tuition rates to certain Minnesota high school graduates even if they entered the United States without authorization. And separate amendments were also offered to freeze and cap at three percent tuition increases by public higher education campuses in order to let students and families recover from significant back-to-back increases over the past several years.

In brief, Senate File 1989 would increase higher education spending above current levels by $296 million, which is a 10.6 percent addition but still below the Governor's proposal by $67 million. Of the increase, $31 million is for the Office of Higher Education (mostly financial aid in the form of the State Grant), and $128 million of the new funding is for the Minnesota State Colleges and Universities and $136.5 million for the University of Minnesota (to subsidize tuition rates for residents). In contrast, the Governor put more funds into financial aid and fewer into MNSCU and the UMN. Some of the money the Governor was proposing to spend was one-time money which would be given to institutions if they met specific goals, such as having the University of Minnesota bring additional research to market and find matching non-public funds for certain programs. Unfortunately, in my opinion, the Senate bill contained no incentives for improvements.

Agriculture and Veterans Budget Bill
On Thursday, March 22, the Senate passed the Agriculture and Veterans Budget. Senate File 1925 spends $27.5 million more than the forecasted growth and $12.2 million less than the governor proposed. The total Senate budget in general fund spending for these two areas is $162 million over the next two years.

The bill funds many of the governor’s initiatives, such as livestock identification upgrades, funds to eliminate bovine tuberculosis, and millions to help our veterans returning from war. The bill also includes a 3.25 percent salary increase for department employees and begins the process of developing energy and fuel from cellulosic material such as switchgrass and native prairie grass. This budget awaits a House version before a conference committee can meet to work out the final budget.

Transportation Finance Bill
On Friday, March 23, the Senate passed the Transportation Finance Bill (SF 1986), including base appropriations and several tax increases. The bill consists of fund transfers and tax increases for highway and transit spending. It includes a ten-cent per-gallon gas tax increase (collecting $330 million/yr) and indexes the gas tax to increase the rate annually with inflation (adding another $21million/yr). It eliminates current license tab fee caps and creates a new depreciation schedule, generating an additional $137 million annually.

In accordance with the motor vehicle sales tax (MVST) constitutional amendment question approved last November, this bill allocates 60 percent of the motor vehicle sales tax to highways, four percent to rural transit, and 36 percent to metropolitan transit. This proposal transfers $56 million annually from the general fund to transportation accounts. These accounts will receive an additional $260 million from MVST annually once the transfer is completed. Additionally, the bill appropriates 50 percent of the motor vehicle lease tax to highways, 12.5 percent to rural transit, and 37.5 percent to metro transit. This would transfer $49 million annually from the general fund to transportation accounts.

The transportation finance bill also authorizes every MN county to impose a $20 wheelage surcharge on vehicles registered in the county, generating as much as $90 million per year. The bill requires a half-cent metro-area sales tax increase in the seven-county metropolitan area and authorizes these counties to collect $20 on every new car purchase in lieu of the half cent sales tax being imposed on vehicles. The sales tax increase would collect an additional $220 million dollars from metropolitan taxpayers annually. Under this proposal, a full 75 percent of this sales tax (about $170 million) would be used for buses and trains, ten percent would be allocated to metropolitan roads, and five percent is dedicated to bicycle and pedestrian trails.

The transportation finance bill also includes $2.2 billion in trunk highway bonds to improve state highways and complete various capital projects like a new regional headquarters in Mankato. Under the bill, consumers would pay an additional gas tax increase through a fuel “surcharge” to finance debt service on the $2.2 billion in trunk highway bonds. The surcharge is expected to cost as much as 8.7 cents per gallon, providing as much as an 18.7-cent gas tax increase. Including the surcharge and inflationary increases, the gas tax rate is projected to be 43.7 cent in FY 2017. In total, this bill spends about $4.5 billion in state funds on transportation over the FY 08-09 biennium and increases transportation-related revenues by $1.35 billion over the same period.

State Government Budget Bill
The State Government Finance Bill passed by the Senate on Saturday, March 24, provides money for additional spending on various initiatives related to the legislature, constitutional officers, and administrative agencies. By eliminating several deputy and assistant commissioners of state agencies, the bill saves $7.3 million over the FY 08-09 biennium. The Department of Revenue is appropriated $15.2 million for additional tax compliance personnel, which are expected to capture $71.2 million in tax revenues currently uncollected. This tax compliance money is then used to finance a 3.25 percent compensation increase for state agency employees, increase the Senate’s budget by $2 million annually, and provide an additional $3.9 million annually for information technology through the Office of Enterprise Technology. In total, the bill spends $593.8 million on state government functions; this is $44.6 million over the FY 08-09 base, but $63.2 million below the Governor’s recommendations, which included a one-time investment in technology for a variety of state agencies.

This bill also included numerous controversial policy proposals, such as authorizing same-sex domestic partner benefits for state and local government employees, requiring automatic voter registration when applying for a driver’s license, and creating a Commission on New Americans to study the impact of immigrants on Minnesota’s workforce.

Public Safety Budget Bill
The Public Safety Budget bill (Senate File 1992) passed the Senate on Saturday, March 24. The total budget approved by the Senate with a 64-0 vote is $1.1 billion over the current biennium. This amount is $75 million over the forecast base and $25.4 million less than the governor proposed. The departments covered in this budget are Public Safety, Corrections, Human Rights, the Private Detective Board, the Sentencing Guidelines Commission, the Fire Marshal and the Peace Officers Standards and Training Board (POST Board).

The bill funds many of the governor’s initiatives, as well as several other Senate proposals brought forward in the Public Safety Budget and Judiciary Committees. Some of the measures will increase funding for items important to our communities, such as law enforcement, investigative resources, probation officers and community public safety.

For example, the bill includes law enforcement overtime grants ($2.5 million), 20 new forensic scientists for the Bureau of Criminal Apprehension, squad car camera acquisition and upgrades ($1 million), Youth Intervention Programs ($1 million), and Crime Victims Grants for Sexual Assault ($387,000) and Domestic Violence ($388,000). The proposals for Office of Justice Programs that were included in the budget are more funds for the Gang and Drug Task Force ($2.5 million), and the Victim Notification System ($450,000). The Department of Corrections section of the bill funds many new intensive supervised release agents ($2.2 million total), probation officers ($2.4 million total, with a 20% increase in funding for county probation officers) and offender reentry grants ($1.5 million).

A key project that will receive funds is the final phase of the state-wide completion of the 911 Emergency Services system known as the ARMER system. There will be a small increase in the fees on all phone bills to help pay for this project completion (beginning with $.10 per month in July, 2008, $.20 per month in July, 2009, and finally $.30 per month in July, 2010). Under this provision, the 55 counties not accounted for in current budgets would then be completed and included in the statewide system by 2012.

Senate File 1992 will be taken up in conjunction with Senate File 1972 (the Judiciary Budget) by a Senate and House conference committee sometime after the Passover/Easter break.

E-12 Budget Bill
Following the previous week's passage of an omnibus higher education bill, the Senate turned its attention on Monday, March 26, to early childhood through grade 12 education (E-12). The E-12 bill (S.F. 2095) is a $13.5 billion proposal that represents an approximate one-half billion dollar increase over the baseline with spending in both the current and upcoming biennium. Yet it is less than the Governor's $13.8 billion proposal (an increase of $760 million, which again includes some one-time surplus money).

There is no change in basic classroom revenue (the "formula allowance"), which will remain at the current level of $4,974 per pupil unit. This is very different than the Governor's proposal (two percent basic revenue increase each year, plus additional money for meeting certain goals) or the House plan (three percent increase each year).

Nearly all of the new funding is being put into special education, which is not distributed equally to each school district but depends on what a district claims for caseload. Proponents argue this action will have the effect of freeing-up regular education dollars that schools are now using to subsidize special education. The school districts in my Senate district all fare well under this plan. However, this action will also cause a loss of flexibility because under federal "maintenance of effort" requirements special education funding cannot be reallocated.

The bill also completely restores the Early Childhood Family Education (ECFE) allowance to its pre-2003 level of $120 per resident pre-schooler, and it makes $10 increases in the aid for school screening of pre-schoolers.

The Governor's proposals to reward "Successful Schools" for academic accomplishments, to increase high school graduation requirements including foreign languages and college-level courses, and to expand the Q-Comp program are completely left out. In fact, Q-Comp ("quality compensation," which promotes reform of teacher compensation in order to move away from complete reliance on "steps and lanes") is ended although the current participating school districts are allowed to continue and to qualify for additional funds.

Charter schools are also negatively targeted by the Senate bill through a newly-imposed cap of 150 (this allows the current 131 to continue as well as some that are about to open, but state start-up funds for the newest schools would be cut-off). These public schools operate independently of school districts but are considered public schools.

Economic Development Budget Bill
On Tuesday, March 27, the bill containing funding allocations for FY 2008-09 for the Minnesota Department of Trade and Economic Development (DEED), Minnesota Housing Finance Agency (MHFA), the Department of Commerce, the Department of Labor and Industry (DOLI), the Historical Society, the Arts Board, and various smaller boards passed the Senate.

The net General Fund appropriation for FY 08 – 09 in this bill is $318.1 million. The FY 08 – 09 February forecast base is $284.1 million. This represents an unofficial Senate target that is $34.0 million over the base. The Governor’s proposed FY 08 – 09 budget for these areas is $383.5 million, reflecting an increase of $99.4 million over the base (again, using some one-time money without “tails”). Note, however the Governor’s budget includes items that are considered in other Senate budget divisions or separate one-time funding recommendations, notably funding for Commerce energy and telecommunications activities, the Public Utilities Commission (PUC), and funding for the UM-Mayo partnership.

While appropriations were generally in line compared to the Governor’s recommendations, a number of policy provisions remained somewhat controversial, and will surely prompt further negotiations with the Governor and the House. Notably, the bill repeals the decrease in the assessment for the Workforce Development Fund from .01 to .085 percent scheduled for January, 2008. The repeal of the decrease would cost employers an estimated $10 million in FY 08 – 09. The bill also creates a private right for enforcement for prevailing wage violations. While expanding DOLI enforcement powers, this provision would also provide for private remedies for a violation of prevailing wage laws including collective action. The bill also eliminates three citizen members from the IRRR board leaving only the 10 legislative members. The legislation also proposes to create a new Plumbing Board, and a new High Pressure Piping board. The Department of Labor and Industry is opposed to this approach, and in part argue these new boards would allow the industry to regulate itself. Those opposed to the boards, myself included, are concerned they are empowered to set rules and fees without the balance of participation from other stakeholders.

Environment and Energy Budget Bill
The Environment and Energy Budget bill (Senate File 2096) passed by the Senate on Tuesday, March 27, funded allocations for FY 2008-09 for the Minnesota Pollution Control Agency (MPCA), Department of Natural Resources (DNR), Minnesota Conservation Corps (MCC), Board of Water and Soil Resources (BWSR), Zoological Board, Science Museum and Metropolitan Council, the Department of Commerce and the Public Utilities Commission (PUC). Highlights of the proposal include the following:

SCORE Grants to Counties. An additional $3 million is available to counties for SCORE grants. The additional funding will be used to support Minnesota’s recycling system.
Ethanol, Mining, and Other Developing Economic Sectors. The Senate appropriates $6 million to support increased demands on PCA’s regulatory programs from economic growth experienced in the ethanol, mining, power, and other industries.
Environmental Health Tracking and Biomonitoring. $1 million is appropriated from the Environmental Fund for environmental health tracking and biomonitoring.
Portable dark and fish houses. Non-resident fishing licenses are raised by $2 so that dark houses or fish houses that are not left on the ice overnight do not need to obtain a license for the houses. This legislation is cost neutral, estimated at $173,000 annually (new estimates show that $3 is actually needed). A three-year fish house or dark house license is available at three times the annual cost.
Fishing Tourney License Fee. The DNR will establish a fee schedule for fishing contest permits that would recoup current and future costs associated with administering the permits: collecting applications, determining that contest limits are met, conducting a drawing, and reporting. Currently, no fee is required. This would raise an additional $108,000 annually.
Deer Hunter Voluntary Donation. This provision would bring in an estimated $485,000 donated annually to process deer at food shelves. The $1 surcharge was dropped due to opposition.
Metropolitan Council. An additional $1,250,000 for the Metropolitan Council parks.
Minnesota Conservation Corps. An additional $500,000 for the Conservation Corps.
Methane Digesters Grants for five additional on-farm digesters in the next two years at a cost of $1 million
Solar Rebate program This program provides a rebate of up to $2 per watt for solar power systems up to ten kilowatts (up to $20,000) which won a US DOE design award in 2005. This program is appropriated $1 million.
Clean Energy Resource Teams (CERTS) This program provides technical assistance directly to communities for the implementation of cost-effective renewable energy and energy efficiency projects.
Renewable Hydrogen Initiative. The Commissioner of Commerce shall operate a competitive grant program for projects to assist the state in attaining its hydrogen energy goals with an appropriation of $1 million.
Rural Wind Energy Revolving Loans. $1 million is appropriated for this purpose.
University of Minnesota Renewable Energy and the Environment Grants. An appropriation of $8 million shall be disbursed as grants to the initiative for Renewable Energy and the Environment at the University of Minnesota to fund renewable energy research in Minnesota.
Carbon Sequestration Study. The Board of Regents of the University if Minnesota is requested to conduct a study assessing the potential capacity for carbon sequestration in Minnesota’s terrestrial systems with an appropriation of $475,000.

Judiciary Budget Bill
The Judiciary Budget approved by the Senate on Wednesday, March 28, in a 63-0 vote is $762 million. This amount for FY 08-09 is $73.5 million over the February forecast and $19.2 million more than the governor proposed. This includes money to cover the base of operations for the courts, Uniform Laws Commission, Board of Judicial Standards and Public Defense Board, and includes pay increases for judges and employees in these different departments.

An important initiative that made it into this Omnibus bill, Senate File 1972, is to increase the number of judges in Minnesota. To increase capacity and alleviate caseloads across the state, the Senate approved both a new three-judge panel in the Court of Appeals and seven new Trial Court judges. The cost for these judges and their support staff will be $3.2 million and $5 million, respectively.

Other funding measures approved by the Senate are increases for Civil Legal Services for low income persons ($2.5 million), maintaining the current drug and problem solving courts throughout the state ($3.9 million) while adding to them ($1.3 million), and keeping the Public Defender Board operational at its current levels ($6.9 million).
The Senate Judiciary Budget bill will most likely be combined with the Public Safety Budget bill, and then taken up in a conference committee with the House to iron out differences between the two bodies.

Capital Investment Bill
The bonding bill (Senate File 2157) passed by the Senate on Wednesday, March 28 totaled $306,605,000. The breakdown includes a General Fund appropriation of $136,932,000; Trunk Highway Bond funding totaling $33,420,000; Bond proceeds of $134,986,000 and General Obligation User Financed of $1,267,000. By comparison, the Governor proposed a total of $79.8 million. Highlights of the Senate’s bonding proposal includes the following:

Scott County Regional Training Center. Provides a $2.5 million cash grant to the public safety training center being built in rural Jordan at the site of the former Scott County Jail Annex. Last year’s bonding bill provided a $1 million grant. The joint effort between several counties and numerous cities will include a shooting range and safety training facilities for firemen, police and public utilities workers. I put in the bill to request $4 million for the facility in next year’s bonding bill and was somewhat surprised to see it appear in this year’s bill. Although a very worthy project, neither the House nor the Governor have the proposal in this year’s bill so it’s difficult to predict if we’ll see it in the final bill.
Biomedical Sciences Research Authority. Creates the Minnesota Biomedical Sciences Research Facilities Authority and authorizes $292 million in $233.6 obligation debt and $58.4 million by the University to support the program.
Central Corridor Transit Way. A General Fund appropriation of $40 million is to the Metropolitan Council for final design and construction of the central corridor transit way between the city of St. Paul and the city of Minneapolis.
St. Paul and Chicago. There is a $2 million appropriation from the General Fund for the state’s share of a high-speed rail line between St. Paul and Chicago.
St. Paul Union Depot. A grant of $4 million to the Ramsey County Regional Railroad Authority to acquire land and structures, to renovate structures, and for design, engineering, and environmental work to revitalize Union Depot for use as a multimodal transit center in St. Paul. The General Fund portion is $2.8 and remainder is from the Bond Proceeds Fund.
Transit Way Study. A General Fund appropriation to the Metropolitan Council of $250,000 is for a comprehensive feasibility study of a number of transit way corridors.
HEAPR. A Bonding appropriation of $22 million to the University of Minnesota and $30 million to the Minnesota State Colleges and Universities (MNSCU) is for Higher Education Asset Preservation and Replacement.
Local Bridge Funding. A Bond appropriation of $30 million is for local bridges. There were requests for over $100 million.
Mankato District Transportation Headquarters. An appropriation of $20,673,000 is from the Bond Proceeds Account in the Trunk Highway Fund is to design, construct, furnish, and equip a new Department of Transportation district headquarters facility in Mankato.
Minnesota Department of Transportation Building Repairs. A $12,715,000 bonding appropriation is to repair the transportation building next to the State Office Building.
Oak Park Heights Correctional Facility. A total of $6,117,000 from the General Fund is for perimeter system renovation and ventilation system renovation.
Reinvest in Minnesota (RIM). A total of $10 million is appropriated from the General Fund is for RIM reserve conservation. This action captures $13 to $15 million in federal dollars.
Duluth Entertainment and Convention Center. A General Fund appropriation of $37 million is a grant to the Duluth Entertainment and Convention Center Authority to design, construct, furnish and equip renovations at this Center.
Itasca County Steel Plant Infrastructure. A General Fund appropriation of $30 million is a grant to Itasca County for public infrastructure needed to support a steel plant in Itasca County.
Mayo Civic Center Complex in Rochester. A $2.5 million General Fund appropriation is for a grant to the city of Rochester to design the renovation and expansion of the Mayo Civic Center complex.
St. Cloud State University National Hockey Center. A $11 million appropriation from the General Fund is to pre-design, design, const, furnish and equip the renovation of the National Hockey Center.
Browns Valley Flood Mitigation. $2 million form the Disaster Relief Contingency Fund to assist with the rehabilitation or replacement of housing damaged as a result of the Browns Valley flooding of March 2007.

Health and Human Services Budget Bill
On Thursday, March 29, the Senate passed the Health and Human Services (HHS) Budget. Senate File 2171 spends $271 million more than the forecasted growth and $239 million more than the governor proposed in his budget. The total net HHS General Fund budget over the biennium is $9.7 billion, an increase of $1.5 billion from the 2006 – 2007 spending.

This budget makes many investments to help uninsured children receive healthcare coverage. The bill provides children with greater access to MinnesotaCare by eliminating barriers due to employer sponsored insurance and a requirement that the child be without insurance for four months. The bill also fully funds the governor’s mental health initiative that will provide targeted increases in the mental health infrastructure, school based mental health services for uninsured children, and an expansion of the mental health crisis intervention and stabilization infrastructure for children and adults.

Long term care facilities receive the majority of the Senate DFL target in this bill. SF 2171 contains a 3.25 percent Cost of Living Adjustment (COLA) each year of the biennium for all direct care employees at nursing homes and other facilities that receive Medical Assistance reimbursements. In addition to the COLA, the bill phases in over five years a system to rebase payment rates for nursing homes so their payments are more in line with their costs. This rebasing phase-in begins in 2009.

There is concern that this bill continues to provide increased funding for state subsidized healthcare programs that will eventually surpass education in funding needs. Many changes made in 2003 to control the growth in spending have been reversed in this bill. Some of these MinnesotaCare changes include eliminating the limited benefit set, increasing the hospital inpatient cap from $10,000 to $20,000, increases eligibility for adults without children to 215 percent over the biennium, and permits eligibility for undocumented children. Due mostly to MinnesotaCare expansions, this budget spends all but $20 million of the $531 million surplus in the Health Care Access Fund by FY11.

Omnibus Tax Bill
On Friday, March 30, the Senate Democrats passed the Omnibus Tax Bill. (No Republicans supported the bill.) The DFL proposal would increase corporate income taxes, and the C/I statewide property tax by a total of $465.9 million in FY 08 - 09, and by $660.7 million in FY 10 – 11. Revenue generated by these provisions is primarily used to fund the DFL’s property tax relief plan which includes additional LGA funding, additional county aid, reestablishing township aid, an increase in the market value credit and property tax refund programs, and additional education aid to buy down property taxes. The bill passed the Senate out of balance. An additional $88.1 million in new revenue would be required in FY 08 – 09, with tails of $184.3 million in FY 10 – 11. It was expected at the time this revenue would be identified in a follow-up tax bill. Controversial provisions in this bill include the following:
· Increases corporate income taxes by $244.0 million in FY 08 - 09 and $194.0 million in FY 10 – 11 by restricting Foreign Operating Corporation (FOC) activity.
· Increases the Statewide Property Tax by $221.9 million in FY 08 – 09 by freezing the tax rate for C/I property at the rate imposed for taxes payable in 2004. Seasonal recreational property is removed from the levy, and utility personal property is added.
· Provides $150 million in additional LGA annually beginning in FY 09 from current law funding of $485 million. Also adopts a number of formula changes, including the elimination of the taconite aid offset.
· Creates a new Education Improvement Account used to buy down property taxes. $78 million is dedicated in FY 09, and $83.3 million annually beginning in FY 10.
· Increases the maximum property tax refund by reducing the percentage paid by homeowners across all existing income brackets.
· Increases the residential and agricultural homestead market value credit by increasing the maximum allowable credit. Residential credit also adopts a slower phase-out schedule.
· Halts the JOBZ program by providing that no qualified businesses will be eligible for JOBZ benefits unless the business subsidy agreement was entered into before May 1, 2007.
· Increases the utility property class rate over a three year period from current law 2.0 percent to 3.0 percent by taxes payable 2010.

Tax Bill 2 with Supplemental Education Funding
Following Senate passage of the Omnibus Tax Bill (SF 1024) that increased corporate income taxes, and the C/I statewide property tax by a total of $465.9 million in FY 08 - 09, this DFL proposal that passed the Senate (again, without any Republican votes) on Saturday, March 31, increased individual income taxes by $993.1 million over FY 08 – 09. Specifically, the proposal adds a new top fourth income tax bracket of 9.7 percent beginning in tax year 2007, and increases the alternative minimum tax rate from 6.4 percent to 7.75 percent and adjusts the AMT exemption phase-out threshold for inflation starting in tax year 2007.

Slightly over half of the revenue generated by these provisions is used to fund $443.7 million in supplemental education funding, and pay for the $88.1 million that was left out of balance in FY 08 – 09 in the Omnibus Tax Bill. The remainder is left as a carry forward to pay for tails in the Senate-DFL budget for FY 10 – 11, and to buy back an additional portion of the current law June accelerated sales tax payment shift.

The education related articles in this bill come on the heels of two other recently-passed Senate DFL omnibus bills - S.F. 1989, which appropriated funds and established policies for higher education; and S.F. 2095, which appropriated funds and established policies for K-12 education.

Both of the earlier bills were below the Governor's spending proposals, and, in the case of the K-12 bill, no basic classroom funding was provided with nearly all the money being spent on special education. Additionally, both bills contained "poison pills" for the Governor (in K-12, it was an end to the Governor's Q-Comp program and a cap on charter schools, and in higher education it was inclusion of the "Dream Act").

Article one of S.F. 1611 follows-up the previous action with an increase of two percent each year of the next biennium in basic education revenue (the formula allowance) per pupil unit. This amounts to $100 in FY2008 and another $102 in FY2009. Linked to this increase are other smaller programs (for example, nonpublic school transportation), which also receive a boost. Altogether, this accounts for $294.3 million of the bill's total $443.7 million spending over the upcoming biennium.

Article one also establishes a major new "pre-kindergarten education allowance" program, which isn't fully implemented until the second year of the FY2008-09 biennium. This is in essence a "scholarship" provided to any family living in Minnesota (whether illegal or legal residents) with children who are three or four years old. The biennial funding for this measure amounts to $56.4 million.

Lastly, a $100,000 "all-day kindergarten facilities assessment" is ordered by the legislation to study the state's readiness and capacity to implement all-day kindergarten.

Article two of S.F. 1611 adds to the previous higher education appropriations by providing another $51.4 million to the Minnesota State Colleges and Universities, $27 million to the University of Minnesota, and $14.6 million to the Office of Higher Education for more generous State Grant financial aid awards. This amounts to a total of $93 million. The legislation states that the extra aid to MNSCU and UMN is intended to keep annual tuition increases at 3 percent and 5 percent respectively.