ST. PAUL -- This week we announced our budget targets in the House and I think it’s a very positive budget framework. I don’t have enough room in this update to go through every detail, but let me call attention to three key elements in the House budget targets: education, local aid, and jobs.
First, the education budget is set to increase by $700 million in the next biennium. For years we have seen a lack of investment in education, but this session we are making it a priority. Increases will be seen in early education, K-12 schools, and higher education. Of all areas of the budget, this is likely the wisest investment. Research has shown that investing in schools improves the economy because you have more qualified applicants for open positions and you help create job creators by giving students the tools they need to create their own businesses. Teachers work hard to make sure our children are graduating high school prepared to go to school or enter the work force, and they deserve investments that will help them succeed.
Second, this budget calls for a $250 million increase in Local Government Aid, County Program Aid, and direct property tax relief. For much of the past decade we have seen cuts to our local aid that left cities and counties with a choice to either cut services or raise local property taxes. And in many cases, both had to be done. With these new investments in our communities, we should be able to see an increase in local services without a raise in local property taxes. Throughout the rest of the session, we will also be reworking the LGA formula to make it simpler and easier for local units to plan their budget from year to year. Right now, it’s so complicated that city and county managers don’t always know what to expect from the state. But with a more efficient formula, long term planning should be much easier.
Third, we are investing in jobs. Last session, the jobs budget was cut significantly and it impacted the way businesses were able to add employees. Our budget calls for a $46 million increase to the jobs and economic development budget to help businesses create jobs at the local level. Included in this budget is an increase in funds for the Minnesota Investment Fund which helps local communities provides loans and grants to companies in their area that are looking to add jobs. The taxes paid by those companies and their new employees then repay the original loan and provide funds for more job creation. It’s an established program that has proven to create job and spur economic activity.
We will have a lot of work to do to sort out all the specifics in the budget, but it’s looking very strong for our district. I’ll keep you updated as we learn more about which bills are getting addressed by the House.
Lastly, I wanted to let you know that my bill to help rural hospitals got signed into law by Governor Dayton after passing unanimously in the House. It will help lower costs by removing an unneeded layer of bureaucracy that required hospitals to be certified twice for certain services. A lot of Representatives don’t get a bill passed so soon in their time at the Capitol and I couldn’t be more proud to represent our district down in St Paul.