June 2017 – MACVB Legislative Update

The 2017 session of the Minnesota Legislature, including a Special Session, is over – correct? Maybe not.  This was the first session where the Republicans controlled both the House and the Senate, with the change in power in the Senate being a surprise to everyone ! So how does divided government work? This was a session where significant legislation was passed. The process however, was not the most open and troubling for those of us who have other sessions to compare with this one. Not once, but twice, the Legislature produced budget bills, essentially behind closed doors and unveiled them just hours literally before passage. Negotiations have always gone on behind closed doors at the end but that practice was taken to a new level in the 2017 Session and it does not reflect well on the concept of negotiation and compromise. The Governor ultimately line-item vetoed some funding for the House and the Senate, partly as a response to them having added language in the Tax bill that would have defunded the Department of Revenue if he vetoed the bill. His action was intended to get the Legislature back to the table to talk about some adjustments to provisions in the tax bill, which he argues could have serious consequences for the states long term financial picture. A meeting of parties in the Governor’s Office a few weeks ago was short and non-productive. They are now suing one another in Court.

The first hearing was held yesterday in Ramsey County District Court. It was clear from reports that the Judge would prefer this be worked out between the Governor and Legislature. That message was strengthened last evening when the Judge approved the agreement between the Governor and the Legislature to continue funding until October for the Legislature at current levels. The basis of the agreement was to avoid staff layoffs.

How will this be resolved? No one is sure at this point. Both sides have constitutional based arguments and even if the Court were to rule, the other party will appeal.  Stay tuned.

Those of you who were not able to attend the Education Summit missed the opportunity to hear Senator Carrie Ruud. She is an incredibly active supporter of everything Tourism and was the reason Explore MN received an additional $ 300,000 (total $900,000) funding for the events program. The CVB’s are key players in making this program a continued success – you now have more time to develop proposals for new events to bring to Minnesota. An important element of this program is that there are exceptional opportunities all parts of Minnesota.

Starting this Sunday, you will be able to purchase off sale liquor in many cities across Minnesota. This was always going to happen – and this was the session.  The law will not be without possible negative consequences for the small liquor stores, but hopefully communities will support their long-standing, usually, family-owned businesses. Hours of operation for on sale liquor may also be extended state-wide during the Super Bowl.

Funding for Explore MN was essentially maintained at existing levels, with some onetime enhancements. They were spared the cuts that many other agencies were forced to absorb. Make sure and let your Senate and House members know how important it is to continue support for tourism, a key economic engine for Minnesota.

Some members were engaged in the discussions at the Legislature regarding fee increases for DNR activities. At the last minute, and thanks to many across the state who contacted key legislators, there was some movement to address funding shortages. July 1 will see modest increases in fees for state parks, snowmobilers, and ATV riders. Hunting and fishing licenses will increase in 2018.

Lodging tax is a key priority for MACVB. We had a major success this year, in establishing clarity for key legislators on the use of lodging tax – that imposition must include creation of a Visitor Bureau in some manner and that the funds are NOT to be used for operations (other than of the Bureau) or capital projects. The City of Sleepy Eye was the only new lodging tax authorized this session. There was special legislation for a handful of other communities imposing local sales and use taxes or modifying those already in place.

Members have been concerned over the delay in moving ahead with Real ID legislation for the past several years. Finally, the law prohibiting the Department of Public Safety from moving forward was passed and signed into law. Now comes implementation. Minnesota is still waiting approval from the federal government for approval to not meet the deadline for compliance.

Thanks to the Public Policy Committee and Chair Stephanie Busiahn for their support during the Session. We had some incredibly helpful conversations and thanks to the committee efforts, we created a formal position statement on Lodging Tax for the association. I used this document several times at the Capitol this year. We will continue to discuss key issues at our monthly meeting.