Minnesota Senate Republicans on Tuesday morning sharply criticized a sweeping transportation, housing, and labor supplemental budget bill from Democrats, slamming it as an “incredibly disappointing” proposal loaded with expensive mandates, regulations, and controversial provisions that will drive up costs for Minnesota families. This legislation passed out of the Senate on a vote of 36-31.
TRANSPORTATION SECTION
The transportation section of the bill includes several highly contentious provisions, including new pilot programs for unmanned red light cameras, expensive zero-emissions mandates for all transit buses by 2035, and a continued push to implement Clean Transportation Standards – which analysts describe as a stealth gas tax increase due to the impact it will have on fuel costs.
“This is an incredibly disappointing transportation bill,” Senator John Jasinski (R-Faribault) Republican lead of the Transportation Committee said. “We had an opportunity to create an overwhelmingly bipartisan bill, as we saw with the transportation policy bill last month. Instead, we get a bill loaded with expensive mandates and regulations that do nothing to improve roads or make commutes more efficient.”
- Speed/Red Light Cameras Pilot Program: The bill establishes a $1 million pilot program authorizing speed and red light cameras in Minneapolis, Mendota Heights, and two communities to be chosen by the commissioner of MnDOT. Several concerns about this provision were presented in a committee hearing, including potential unconstitutionality. Red light cameras penalize a vehicle, not the person committing the crime; can be viewed as violating personal privacy; and encourage government overreach. The provision also fails to address an ongoing issue plaguing many cities: the shortage of good police officers patrolling the streets.
- Republicans offered a series of amendments to delete or fix the red light camera portion of the bill, but they were all rejected by Democrats.
- Zero-Emission Buses: The bill originally required 50% of new Metro Transit buses to be zero-emission by 2030. One hundred percent must be emission-free by 2035. Committee testimony noted that each zero-emission bus would cost $500,000 more upfront than existing buses, not including charging infrastructure or other operational costs. Testimony also indicated that zero-emission buses have a higher per-mile operating cost than current buses. A representative from Metro Transit could not guarantee that zero-emission buses would be cheaper in the long run.
- Republicans successfully offered an amendment to make this provision a goal rather than a requirement.
- Clean Transportation Standards: The bill authorizes a study of Clean Transportation Standards, which has been called a stealth fuel tax for its predicted impact on gas prices. If enacted, Clean Transportation Standards are projected to increase gasoline and diesel prices by 39 to 45 cents per gallon by 2030 with virtually zero impact on global temperatures. The average cost of driving for a typical Minnesota family would jump from $350 to $476 per household, with families in Greater Minnesota feeling a significantly higher burden.
- Republicans offered an amendment to include a study of how CTS would impact gas prices, but Democrats rejected it.
- Transportation Greenhouse Gas Impact Assessment: The bill makes several changes to the transportation greenhouse gas emissions impact assessment that was created in 2023. The greenhouse gas language will cause road projects to be canceled or delayed, and significantly increase the costs for those that are completed. County engineers reported that road construction costs will increase by as much as 25%.
LABOR SECTION
Additionally, the labor section of this bill includes one-size-fits-all policies that ignore the unique needs of different types of employers and employees. This includes proposals that jeopardize important broadband projects, make concerning changes to Minnesota’s earned sick and safe time law, and threaten the availability and cost of low-income housing.
“This legislation takes no meaningful steps to increase employment opportunities for Minnesotans or make our state a more competitive place to grow a business,” Senator Gene Dornink (R-Brownsdale), Republican lead of the Senate Labor Committee, said. “While government doesn’t directly create jobs, its policies can either encourage or deter business expansion. That is why we should be passing policies in partnership with both labor and industry. Instead, this bill threatens to shut down pending broadband projects and fails to address the housing crisis.”
- Broadband Equity Access and Deployment Program: The most concerning part of the labor section are changes that will slow or stop broadband development. This restricts who can work on broadband construction through licensure restrictions, threatens all broadband projects, and ultimately increases project costs.
- Republicans offered key amendments to improve broadband service, including a proposal to take the $9 million from Tending the Soil appropriation and focus these dollars on broadband improvement. Democrats refused to accept these changes.
- Earned Sick and Safe Time Modifications: Notably, the labor section also modifies the earned sick and safe time (ESST) law, which went into effect on Jan. 1, 2024. This includes a change to allow employees to use all sick time available for purposes permitted under the ESST law. It also modifies the professions covered under this law. If this bill becomes law, flight crews will now be covered. However, it removes volunteer firefighters from mandated coverage.
- Republicans offered key amendments to address concerns with the ESST law modifications, including a proposal to provide $9 million to schools to implement ESST requirements. Democrats rejected these changes.
- Wage Theft Prevention and Prevailing Wage Requirements for Low Income Housing: The bill requires multifamily housing with more than 10 units that used low-income housing construction tax credits to pay prevailing wage. This reduces supply and raises the cost of low-income housing.
- Senate Republicans offered an amendment to strip this controversial language for rural Minnesota, but Democrats refused to accept it.
Republicans offered key amendments to address the looming Uber and Lyft issues brought on by the Minneapolis City Council’s decisions. Two amendments were offered, first preventing Uber/Lyft from eliminating or limiting service by preempting locals from certain regulations regarding transportation network company (TNC) drivers. Democrats ruled the amendment not germane. Second, clarifying that TNC employees are independent contractors, however, Democrats did not accept the amendment.
HOUSING SECTION
Senate Republicans on Monday also sharply criticized a $63 million housing proposal from Senate Democrats as an ineffective and wasteful set of one-time giveaways that fail to address the root causes behind Minnesota’s housing affordability crisis.
“Instead of meaningfully tackling the root causes making housing too expensive, Democrats are wastefully throwing one-time money at the problem which won’t solve anything long-term,” Sen. Eric Lucero (R-St. Michael), Republican lead on the Housing and Homelessness Prevention Committee said. “Democrats are doubling down on the same failed tactics of the past – throwing taxpayer money at subsidies and programs rather than confronting the root issues causing low housing supply. Until Democrats abandon their misguided government centered approach, the housing crisis resulting in pricing Minnesotans out of the market will only worsen.”
- Government Paying People’s Rent: Another $50 million goes to the Housing Affordability Preservation Investment Program to prop up nonprofit affordable housing groups that are struggling with costs because they don’t charge enough rent. This appropriation does not create any new units nor does it develop any ownership – it is effectively a handout to landlords.
- Housing Infrastructure Bonds: The proposal also authorizes $50 million in Housing Infrastructure Bonds (HIBS), which carry much higher interest costs for state taxpayers. The cumulative government debt costs HIBs escalate quickly as previous years’ HIBs compound. In addition, HIBs remove spending discretion from the legislature, granting excessive authority to the agency.
- Handouts to nonprofits for work they are already doing: The bill provides $500,000 to the Amherst H. Wilder Foundation for the Minnesota Homeless Study. The Wilder Foundation is an established entity that has been conducting this study without state financial assistance since 1991. MHFA may use up to 1% of this funding for administration.