Minnesota legislature adjourns regular session ‘in a whimper’

The following comes by way of Dentons 50 partner Hill Capitol Strategies in Minnesota.

After nearly six months of committee hearings, floor sessions, long debates and a modern-day record of bill introductions, in the words of Senate Minority Leader Tom Bakk, “the Session ended in a whimper.” 

On Sunday, with less than 30 hours left before the constitutionally mandated end of the 2019 Legislative Session, the House, Senate, and Governor came to a budget agreement and global budget targets.  In a normal year, conference committees at that point in a session would have already resolved many of their policy differences and come to tenuous agreements on many of the provisions within each bill. However, this year’s general stalemate between the DFL Governor, DFL House and GOP Senate was too difficult to overcome. 

When the Constitutionally mandated deadline was reached at midnight Monday, the Minnesota Senate had passed two of the ten budget bills necessary to fully fund state government.  The House, like the Senate was able pass the Higher Education Omnibus Finance Bill and send the bill to the Governor. However, the House was unable to pass the Agriculture and Housing Omnibus Finance Bill before the midnight deadline.  This means most of the state government remains unfunded, the Legislature must pass the budget prior to July 1st, which is the start of the new biennium.  

For a session which started with bipartisan commitments to greater transparency, new deadlines intended to help move the budget process along and talk of easy early legislative wins, this session will likely go down as one of the least transparent sessions in the modern history of the state.  The late agreement of budget targets led to a final day of closed-door negotiations between members of the Legislature and the Walz Administration.  

Only two budget conference committees were able to meet a 5 pm Monday deadline to complete their work.  The failure of the remaining 8 Conference Committees resulted in what can only be described as individual budget tribunals involving the Governor, Senate Majority Leader, the Speaker of the House and the individual conference committee chairs.  It was suggested Leadership and the Governor would use these meetings to resolve any outstanding issues and close-up the budget bills. However, it doesn’t appear as though these meetings resulted in any final agreements.  

As it stands, larger bills, like the more than 1000-page Health and Human Services Omnibus Finance Bill and the Tax Omnibus Bill, must still be negotiated.  Numerous controversial policy provisions remain undecided in virtually every budget bill. While Conference Committee reports cannot be amended when heard on the floor of the House and Senate, during a Special Session the slate is wiped clean, and every bill must be reintroduced before being put to a vote. 

It is unclear as to exactly when the Governor will call a Special Session, House and Senate Leadership have both mentioned a possible one-day Session on Thursday, May 23rd. However, in order to complete their work quickly, the minority party in both bodies must agree to provide the votes necessary to suspend the rules and process legislation.  It appears unlikely the House Minority Leader is willing to help the House DFL pass the budget, especially given his exclusion from any of the budget negotiations. It does not appear one day will be enough to settle all the outstanding differences.

Minnesota special session adjourns until next year

The following comes by way of Dentons 50 partner Hill Capitol Strategies in Minnesota.

At 6:57 Saturday morning, a rare Memorial Day Weekend Special Session adjourned.  The 10 remaining budget bills were adopted during the 21-hour Special Session.  The following budget bills and a pension bill were adopted:

·         Taxes

·         E-12 Education

·         Health & Human Services

·         Environment & Natural Resources

·         Public Safety & Judiciary

·         Jobs & Energy

·         Transportation

·         Agriculture & Housing

·         State Government Finance & Veterans Affairs

·         Legacy

·         Pensions

The Global Budget Agreement reached between the Governor, Speaker of the House and Senate Majority Leader included passing a $500 million Capital Investment or Bonding Bill, however the bill was not brought forward for a vote in either body.  While the initial response from the Minority Leaders in both bodies was to not provide the votes necessary to suspend the rules and allow for a quick session, in the end private discussions likely led to some non-public agreements with the minority.  The outcome of those discussions and any agreements may never be made public or they could include changes we won’t see until the Legislature returns in 2020.  Whatever those discussions were, minority members in both bodies did offer a handful of amendments to various bills.  Those amendments were not adopted and the Legislature was able to meet the 7 am adjournment time agreed to with the Governor.  The Governor will sign the bills as they are presented to him this week

The new budget goes into effect on July 1, 2019.  The Legislature is not scheduled to return until noon, Tuesday, February 11, 2020.  Numerous House Committees have indicated an interest in conducting hearings or listening sessions over the Interim.  With the end of the Regular Session, Minnesota’s prohibition on fundraising from Lobbyists and Political Action Committees during the session also goes away.  It certainly didn’t take long for the mailbox to fill with invites to numerous fundraising events. 

Newly elected state AGs outline enforcement priorities

Eighteen new state attorneys general will take office in 2019. There will be new AGs in Alaska, Colorado, Connecticut, Delaware, Florida, Hawai`i, Illinois, Maine, Michigan, Minnesota, Missouri, Nevada, New York, Ohio, Rhode Island, South Dakota, Wisconsin and Wyoming. Politically speaking, the impact of the 2018 midterm elections on the AG landscape was decidedly mixed, with Democrats flipping four AG seats previously held by Republicans, and the GOP maintaining their strongholds in Florida and Ohio. Overall, the midterms shifted the balance of state AG seats nationwide to a Democratic majority. Democrats now occupy 27 AG seats (including in Washington, DC) and Republicans, 24.

Companies should be aware that the newly elected AGs are expected to be as aggressive, or more so, than their predecessors. In Connecticut, for example, AG William Tong is succeeding AG George Jepsen, who led some of the largest bipartisan multistate investigations, including into opioid manufacturing and distribution, alleged price fixing in the generic drug market, and data privacy issues. Tong has signaled his intention to continue with these efforts, recently declaring: “I’ve always been activist in the legislature and I’m going to be activist as an attorney general because that’s what you need right now.”[

Other new AGs have started identifying their enforcement priorities. Some newly elected Democratic AGs have announced plans to investigate President Trump’s various business organizations. Others are targeting the administration’s policies. Illinois AG Kwame Raoul is challenging a recent ruling by a federal judge in Texas striking down the Affordable Care Act[, while Nevada AG Aaron Ford has indicated that he will reverse the course set by his predecessor, Republican Adam Laxalt, a staunch opponent of the ACA.

In Colorado, AG Phil Weiser, a Democrat, has outlined his intention to join a lawsuit against opioid manufacturers for allegedly misleading users as to the drugs’ addictive qualities, defend against federal overreach Colorado’s right to decide how it legislates and manages marijuana use, and protect consumers against financial scams. Minnesota AG Keith Ellison, a former Democratic congressman from the state’s 5th District, has pledged to address drug-pricing issues and allegations of anti-competitive activity in the nation’s agricultural sector. “We want to stand with Minnesotans against the big entities in this world as you are trying to make a go in this economy,” he recently told his constituents. “The middle class, I believe, is hanging on barely, and I think the attorney general ought to stand up against the fraudsters, against the monopolies, against these folks who would make your life so much more difficult to afford.”

New elected Republican AGs, for their part, are expected to continue their party’s stalwart defense of the Trump administration through the filing of amicus briefs in high-profile lawsuits challenging his executive orders and final agency actions. But they will also ramp up state enforcement actions in certain areas. For example, Ohio Republican AG Ted Yost is expected to continue his scrutiny of pharmacy benefit managers (PBMs), an industry that he focused on during his time as Ohio State Auditor.

State attorneys general will continue to combine their resources in an ever-growing number of multistate and multi-defendant investigations and civil and criminal enforcement actions, raising the stakes for both individual companies and entire industries. In addition to the issues the AGs campaigned on in the midterm elections, there’s no telling what new issues they will involve themselves in, given the unpredictability of the Trump administration. More relevant to assessing and addressing a business’s regulatory risks is understanding the scope of a particular AG’s authority, its level of activity and the political dynamics framing its choices.

Primaries in Conn., Minn., Wisc.: what to watch for and expect as polls close

Primaries in three states on Tuesday will set the contours of some of fall’s highest profile gubernatorial  and US House contests, as both parties eye possible and long-pursued upsets in Connecticut, Minnesota, and Wisconsin.

Connecticut

CT-Gov (D & R): Democratic Gov. Dan Malloy decided not to seek a third term in the face of an ongoing economic crisis that’s made him incredibly unpopular, and Republicans have a real chance to score a pickup in the fall.

Five Republicans are competing here, and there’s no obvious frontrunner. The state party endorsed Danbury Mayor Mark Boughton, who has led the few polls we’ve seen. Boughton, along with businessman Steve Obsitnik and former Trumbull First Selectman Tim Herbst, are participating in the state’s public financing program, which gives them each $1.35 million for the primary but caps their spending at $1.6 million.

Two businessmen, David Stemerman and Bob Stefanowski, are mostly self-funding their bids and are therefore not limited in how much they can spend. Stemerman has spent a hefty $6.2 million during his campaign, while Stefanowski has spent $2.9 million. Both Stefanowski and Stemerman have also aired commercials attacking one another while largely laying off their rivals. A survey earlier this month from the Democratic firm Tremont Public Advisors had Boughton leading Stefanowski 32-22, with Stemerman at 17.

Things are much more lopsided for the Democrats. The state party establishment, as well as a number of prominent unions, are supporting wealthy businessman Ned Lamont, who notably defeated Sen. Joe Lieberman in the 2006 primary before losing the general election to Lieberman’s independent campaign; Lamont also lost the 2010 primary to Malloy. The only other Democrat in the race is Bridgeport Mayor Joe Ganim, who spent several years in prison for corruption but regained his old office in 2015. Lamont has outspent Ganim $2.6 million to $600,000 during the campaign.

CT-05 (D & R) (50-46 Clinton, 54-45 Obama): Democratic Rep. Elizabeth Esty announced she would retire in the spring after news broke that she’d inadequately handled an abusive staffer.

Former Simsbury First Selectwoman Mary Glassman narrowly won the endorsement of the Democratic Party endorsement over former high school teacher Jahana Hayes, the 2016 National Teacher of the Year. Glassman has the backing of several of Connecticut’s House members, but several unions and Sen. Chris Murphy are supporting Hayes, who would be the first black woman to represent the state in Congress. Glassman outspent Hayes $220,000 to $59,000 from July 1 to July 25 (which the FEC calls the “pre-primary period”), but Hayes had more money in the bank for the final weeks of the race.

This western Connecticut seat has been competitive territory in the past, and Republicans hope that retiring Gov. Dan Malloy’s unpopularity will give them an opening. However, none of the three Republican candidates have raised much money. The top fundraiser is retired psychology professor Ruby O’Neill, who outspent businessman Rich DuPont $57,000 to $33,000 in the pre-primary period. Former Meriden Mayor Manny Santos spent only $6,000 during this time, but he has the state party endorsement.

Minnesota

MN-Gov (D & R): Democratic Gov. Mark Dayton is retiring after two terms, and both parties will fight hard to win this contest in the fall. The Democratic primary is a three-way race between Attorney General Lori Swanson, Rep. Tim Walz, and state Rep. Erin Murphy.

Swanson only entered the race in early June, but she brought plenty of name recognition with her. However, her campaign has faced some tough stories in the two months since. News broke in July that Rep. Rick Nolan, who is Swanson’s running mate, had hired a former employee for his 2016 re-election campaign even though the aide had previously left Nolan’s legislative staff after multiple women accused him of sexual harassment. In the final week of the contest, former staffers at the attorney general’s office charged that Swanson had pressured government employees into doing political work for her. Two polls taken in July, before the Nolan story broke, showed Swanson leading the primary, but we have no new data since then.

Walz, who represents a competitive congressional seat in the southern part of the state, looked like the frontrunner throughout most of the race, and he and his allies have outspent the rest of the field. However, Murphy, who has been trying to run to the left of the pack, has Dayton’s support as well as the official endorsement of the state Democratic Party.

On the GOP side, former Gov. Tim Pawlenty is seeking to regain his old seat eight years after leaving office and embarking on an unsuccessful presidential bid. He faces Hennepin County Commissioner Jeff Johnson, who lost the 2014 general election to Dayton 50-44. Pawlenty has considerably more money and name recognition, and the few polls we’ve seen have shown him far ahead. Johnson, however, has the state GOP’s backing, and he’s tried to position himself to Pawlenty’s right. The former governor went up with a negative TV ad last month, so he’s at least taking Johnson seriously as a threat.

MN-01 (R) (53-39 Trump, 50-48 Obama): Democratic Rep. Tim Walz is leaving this competitive southern Minnesota seat behind to run for governor, and Republicans are hoping its sharp swing towards Trump will give them a big opening in the fall. The GOP candidates are state Sen. Carla Nelson and businessman Jim Hagedorn, who narrowly lost to Walz in 2016 in a race that had looked safe for Team Blue until election night.

Nelson outspent Hagedorn $126,000 to $93,000 during the pre-primary period, though he had more money left for the final weeks of the contest. Nelson does have the NRA in her corner, while Hagedorn has the party endorsement. Still, some Republicans are anxious about nominating Hagedorn, who has a long history of misogynist comments, birther ramblings, and comments about “ungrateful” and “dead Indians.” Whoever emerges will take on former Defense Department official Dan Feehan, who faces little opposition in the Democratic primary.

MN-05 (D) (73-18 Clinton, 74-24 Obama): Rep. Keith Ellison announced on the final day of candidate filing that he was leaving this safely blue Minneapolis seat to run for attorney general to succeed Lori Swanson, who herself had just announced a last-minute bid for governor. Several Democrats quickly entered the race for Ellison’s seat, and the main candidates look like former Minnesota House Speaker Margaret Anderson Kelliher, state Rep. Ilhan Omar, and state Sen. Patricia Torres Ray.

Kelliher narrowly lost the 2010 primary for governor to Mark Dayton. Omar, who would be the nation’s first Somali-American member of Congress, has endorsements from Dayton, Minneapolis Mayor Jacob Frey, and the state party. Torres Ray would also make history as Minnesota’s first Hispanic member of Congress, but she’s raised considerably less money than her two main opponents.

MN-08 (D) (54-39 Trump, 52-46 Obama): Democratic Rep. Rick Nolan is retiring from a seat in the Iron Range in the northeast corner of the state. This area is ancestrally Democratic but shifted hard towards Trump, and Republicans are excited about St. Louis County Commissioner Pete Stauber, who faces no serious primary opposition.

There are three main Democratic candidates. State Rep. Jason Metsa and former state Rep. Joe Radinovich, who was Nolan’s campaign manager during his tight 2016 re-election campaign, have the most money and support from party elites. Radinovich, who has had the airwaves to himself, outspent Metsa $124,000 to $82,000 during the pre-primary period, and they both had a similar amount of cash left for the final weeks of the race. However, while retired Duluth news anchor Michelle Lee has raised and spent very little money or attracted much support from Democratic power players, she does have name recognition from her decades on TV.

Mining is one of the key issues in this contest. Mesta is the Democrat closest to mining interests and he has the backing of the United Steelworkers. Lee in particular has emphasized her opposition to local copper-nickel mining and its effects on the environment. Radinovich has tried to position himself in the middle on this issue while focusing more on healthcare.

Vermont

VT Gov (R): Gov. Phil Scott, a centrist Republican stock-car driver, was once one of the most popular governors in the country — beloved by Republicans, Democrats and independents. But then, in April, he signed three historic gun-control laws, drawing fierce protests from residents of this traditionally pro-gun state. In a Morning Consult poll conducted after the signing, Scott’s popularity among Republicans dropped by 26 percentage points, and he now has a -15 net approval rating with voters of his own party. That could be a problem on Tuesday, given that shopkeeper Keith Stern is challenging Scott from the right, specifically criticizing Scott for signing the gun bills. The Republican Governors Association is acting like this is a competitive race: It has invested more than $1 million in a PAC supporting Scott’s re-election.

If Scott does lose the primary, then Stern, a more mainstream conservative, would instantly become a heavy underdog in this dark-blue state. (Going by our new and improved partisan lean metric,1 Vermont is 24 points more Democratic-leaning than the country as a whole.) Although none of the Democratic candidates has lit the world on fire financially, the favorite in the Democratic primary is probably former Vermont Electric Cooperative CEO Christine Hallquist, who, if elected, would be the nation’s first transgender governor.

Wisconsin

WI-Gov (D): Democrats have a crowded contest to take on GOP Gov. Scott Walker. State Superintendent of Public Instruction Tony Evers, the only statewide official running, has had decisive leads in the few polls we’ve seen, while his rivals have all been far behind.

However, former state Rep. Kelda Helen Roys, who would be the first woman to serve as governor, spent considerably more money than the rest of the field during July, which could help her get her name out late in the race. Professional Fire Fighters of Wisconsin president Mahlon Mitchell, who would be Wisconsin’s first black governor, has also spent a credible amount of money, and he’s backed by several unions. Attorney Matt Flynn, campaign finance reform activist Mike McCabe, Madison Mayor Paul Soglin, and state Sen. Kathleen Vinehout are also in.

WI-Sen (R): Republicans have hosted an extremely expensive contest to take on Democratic Sen. Tammy Baldwin. In one corner is businessman and Marine veteran Kevin Nicholson, who has benefited from over $10 million in spending from groups supported by conservative megadonor Richard Uihlein. In the other is state Sen. Leah Vukmir, who has received $2.5 million in air support from groups funded by Diane Hendricks, another conservative megadonor, and the Metropolitan Milwaukee Association of Commerce.

Nicholson has pitched himself as a conservative outsider, while Vukmir is much closer to the state GOP establishment and touts endorsements from both the state party and most of the state’s House delegation (including retiring Speaker Paul Ryan). Vukmir and her allies have taken aim at Nicholson’s tenure as president of the College Democrats of America, including his 2000 speech at the Democratic National Convention in support of Al Gore. Nicholson and his supporters have hit back against Vukmir for expressing past doubts about Donald Trump. A few polls in July showed Nicholson ahead, but we haven’t seen any fresh numbers in weeks.

WI-01 (D) (53-42 Trump, 52-47 Romney): Speaker Paul Ryan is retiring from this southern Wisconsin seat, and the GOP quickly closed ranks behind attorney Bryan Steil. Democrats are hoping to make a play for this district, and they have a battle between ironworker Randy Bryce and Janesville School Board member Cathy Myers.

Bryce entered the race last year with a strong announcement video promoting him as a blue-collar American who will stand up to the GOP, which helped him raise gobs of money. He also has the support of the DCCC, Bernie Sanders, and several unions. However, Bryce has attracted some bad headlines over the last year. Most notably, he only paid off some old debts, including $1,300 in child support and a $2,000 loan from almost two decades ago, well after he kicked off his campaign. Myers has raised considerably less money and generated much less attention, either good or bad.

MN judge reverses Dayton’s budget veto

Ed. note: the following comes by way of Dentons 50 Partner Todd Hill

A Minnesota county district judge this week reversed Governor Mark Dayton’s veto of the Legislature’s budget, saying the governor had overstepped this constitutional authority in his attempts to pressure lawmakers on tax policy.

In his opinion, Ramsey County District Judge John Guthmann wrote Wednesday that the governor’s line-item veto of the House and Senate budgets had the impact of “effectively eliminating a coequal branch of government,” and that the action had therefore violated the Minnesota Constitution.

Accordingly, the judge wrote, the governor’s vetoes were “null and void.”

Because the governor did not object to the actual appropriations for the House and Senate, and instead issued the vetoes in an attempt to seek changes on unrelated policies, Guthmann found the governor had “improperly used his line-item veto authority.”

Dayton has directed his attorney, former Supreme Court Justice Sam Hanson, the appeal the decision to the Minnesota Supreme Court.