Capital Bonding

My colleague Rep Paul Gardner shared the following blog about Capital Bonding and, with thanks to him, I would like to share it with you.

Every two years the Legislature and Governor work on this bill to provide funding for publicly owned buildings, property, and land. In particular, state agencies have buildings or property that are in need of repair, renovation, or replacement. Our state colleges and universities tend to have a large request because they have a lot of buildings. To be "bondable" the project has to be publicly owned, be of state or regional significance, and be a capital project--meaning it has to be "bricks and mortar" and not for ongoing operation costs. The state raises money for these projects by selling general obligation bonds on the bond market. The state then pays the debt service to pay off the bonds over time.

Many people have written me assuming that when the Legislature passes a bonding bill that the amount of the bill is actually added dollar-for-dollar to the budget. For example, the Senate just passed a $1 billion bill and someone said that they added $1 billion to the deficit. That's not the case. In our current budget, we will now just pay the debt service on the $1 billion, which is in the tens of millions or so.

The state agency Minnesota Management and Budget (MMB) starts the process by asking public entities to submit requests. Usually the requests are something like five times greater than funding available, so MMB winnows them down and eventually the Governor's office submits a proposal to the Legislature with projects he wants. This year the Governor submitted $685 million worth of projects and those projects were mostly for state agencies and higher education institutions. The House and Senate are likely to approve a bill in the $1 billion range. According to staff, this difference of $315 million would increase our debt service for FY2010 by zero and by just $2.5 million in FY2011.

The bonding bill is often touted as a jobs bill. It is true that the private sector creates most jobs, but in bad economic times when the private sector is not hiring, government can spur job growth by spending on public projects that are generally needed anyway. (This is a basic tenet of Keynesian economics.) Right now, construction costs have declined considerably so many of us believe that if we have a larger bonding bill this year it does two things: we get more projects done for less money and we can spur additional job growth albeit temporarily. A general rule of thumb is that for every $100,000 in bonding projects, you get one job. (Someone gets paid for doing the work, but there are also costs to fuel, supplies, construction materials, etc.)

So if we pass a $1 billion bonding bill instead of the Governor's proposed $685 million (a difference of $315 million), we could see the creation of 3,150 additional jobs for just an additional $2.5 million during the next fiscal year. At least in the short term, that's $793 per job when we need to put people to work. WOW.

How do we figure out what an acceptable debt level is? Well, there is no law that limits our debt level, but several decades ago, Governor Perpich used three percent of the general fund budget as a guideline and the state has pretty much stuck to that level.

Moody's (an agency that sets bond ratings) said this about our debt management: "Minnesota's debt levels have historically been a neutral-to-positive part of the state's credit profile. The state's debt issuance is highly centralized and controlled, with the bulk of bonds issued carrying the full faith and credit pledge of the state. Minnesota's metrics have tended to place the state about average or slightly better among the states for debt issuance. Moody's 2009 State Debt Medians Report shows that Minnesota ranks 25th in debt per capita and 32nd in debt as a percent of personal income, largely a result of the state's increasing personal income levels."

Caucuses and Session!

Dear Mighty Citizens,

On Tuesday, February 2nd I encourage you to take part in precinct caucuses.

Precinct caucuses bring neighborhoods together and offer all of us the chance to weigh in on the issues important to our community, state and country. Not only are caucuses the first step in choosing our elected officials, they also begin the process of forming party platforms and setting priorities.

To find where your precinct caucus is located you can visit the Minnesota Secretary of State website: www.sos.state.mn.us . The website displays the times and locations of the Democratic, Republican, Independence, Constitution, and Green Party caucuses.

Two days after caucuses, the 2010 legislative session begins. As you have done throughout the interim, please continue to stay active and to contact me with your ideas and input. Your active role in our political process helps me effectively represent our communities at the State Capitol.

Thank you for the opportunity to serve. It remains a great honor and privilege.

Fixing GAMC: We Can Do This.

At the end of this past legislative session, Governor Pawlenty vetoed funding for General Assistance Medical Care (GAMC), which provides health care to 70,000 (about 35,000 in any given month) of the poorest and sickest Minnesotans each year. Recipients on GAMC earn less than $7,500 per year and about 80% of those served have serious mental health issues. GAMC funding is set to expire on March 1, 2010.

Since session adjourned, we have been working on a solution that will preserve basic health care for the most vulnerable Minnesotans. In July, Health Policy committee members visited nine safety net hospitals all over the state to hear about the need to continue providing basic health care benefits to this medically needy population. Since August, we have held meetings with hospitals, health plans, providers, unions, counties, representatives of the faith community, safety net organizations, grass roots organizations, mental health advocates, and many others to discuss policy and financing alternatives for GAMC.

After a lot of listening, we are moving forward with our proposal to temporarily restore GAMC for 16 months in order to build a bridge to national health care reform. Temporary GAMC will offer access to basic care for those currently enrolled, protect vital health care jobs, and restore the solvency of the Health Care Access Fund through 2012. Funded entirely without new taxes, the solution relies largely on cost saving reforms, maximizing existing state and federal health care funding streams, and reduced provider reimbursement rates to pay for a pared down GAMC.

You can view our proposal online: http://www.house.leg.state.mn.us/comm/committee.asp?comm=86118.

This plan is not perfect, and there are issues we need to continue working on, but inaction is not an option. In the coming weeks before session, we will continue to work collaboratively with health care stakeholders as well as with the Governor and Republicans on a bipartisan solution that is in the best interest of all Minnesotans.

This morning, Lori Sturdavent writes about the session ahead and its challenges. Read it here http://www.startribune.com/opinion/commentary/79092092.html?elr=KArksc8P:Pc:UthPacyPE7iUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUr

Next step in this process will come on Monday, December 14th when we hold a public hearing to discuss various GAMC proposals. As always, I look forward to your input and perspective.

General Assistance Medical Care (GAMC)

Casey Selix of MinnPost wrote this story which digs into the complexity of GAMC and efforts to rebuild health coverage for 35,000 sick and poor Minnesotans.

Read it here:

http://www.minnpost.com/stories/2009/10/15/12504/pawlenty_sliced_minnesotas_medical_care_for_the_poor_and_now_times_running_out

Early Childhoood Opportunity

Legislative Leadership Institute on Child Development Research and Policy

Dear Mighty Citizens,

I wanted to share with you some information about a legislative conference I will be attending later this month. From Monday, November 9 through Wednesday, November 11 I will be attending the Legislative Leadership Institute on Child Development Research and Policy, sponsored by the Council of State Governments Midwestern Office and The Minnesota Community Foundation.

The Institute is designed to build knowledge and understanding of the science of brain development, and how the experiences of children ages birth to three affect development, health and social outcomes across the life span.

It’s an honor to be nominated by my colleagues to attend the Institute and I am eager to learn more from these nationally known researchers about how early experiences build the brain’s architecture and develop a weak or strong foundation for life.


Here is a list of the primary presenters: Richard Chase, Ph.D., Senior Research Scientist, Wilder Foundation. Dr. Chase will unveil the findings from the Minnesota Community Foundation-commissioned report on the demographics and key indicators of infant and toddler well being in Minnesota; Meggan Gunnar, Ph.D., University of Minnesota Distinguished McKnight Professor in Child Development, international expert on the effect of stress on brain development, and member of the National Scientific Council of the Developing Child, Harvard University; Robert Anda, MD, MS, senior researcher, Center for Disease Control, and Co-Principal Investigator of the Adverse Childhood Experiences Study (ACE). The ACE is one of the largest scientific research studies of its kind, analyzing the relationships between multiple categories of childhood trauma and health and behavioral outcomes later in life; and J. Ronald Lally, Ed.D., Co-Director of the Center for Child and Family Studies at WestEd, an educational research and development laboratory.o. Dr. Lally directed the Syracuse University Family Development Research Program, a longitudinal study of the impact of early intervention on low income children and families.


I look forward to reporting back to you about the conference and ways we can improve early childhood in Minnesota.

Health Care Choices

This interactive graph breaks down the U.S. House health care proposal.

The Past. The Future.

THE WHITE HOUSE

Office of the Press Secretary

_______________________________________________________________________________________

FOR IMMEDIATE RELEASE

September 9, 2009

Below is the text of the letter from Senator Edward M. Kennedy referenced in the President’s address to a Joint Session of Congress.

May 12, 2009



Dear Mr. President,

I wanted to write a few final words to you to express my gratitude for your repeated personal kindnesses to me – and one last time, to salute your leadership in giving our country back its future and its truth.

On a personal level, you and Michelle reached out to Vicki, to our family and me in so many different ways. You helped to make these difficult months a happy time in my life.

You also made it a time of hope for me and for our country.

When I thought of all the years, all the battles, and all the memories of my long public life, I felt confident in these closing days that while I will not be there when it happens, you will be the President who at long last signs into law the health care reform that is the great unfinished business of our society. For me, this cause stretched across decades; it has been disappointed, but never finally defeated. It was the cause of my life. And in the past year, the prospect of victory sustained me-and the work of achieving it summoned my energy and determination.

There will be struggles – there always have been – and they are already underway again. But as we moved forward in these months, I learned that you will not yield to calls to retreat - that you will stay with the cause until it is won. I saw your conviction that the time is now and witnessed your unwavering commitment and understanding that health care is a decisive issue for our future prosperity. But you have also reminded all of us that it concerns more than material things; that what we face is above all a moral issue; that at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.

And so because of your vision and resolve, I came to believe that soon, very soon, affordable health coverage will be available to all, in an America where the state of a family’s health will never again depend on the amount of a family’s wealth. And while I will not see the victory, I was able to look forward and know that we will – yes, we will – fulfill the promise of health care in America as a right and not a privilege.

In closing, let me say again how proud I was to be part of your campaign- and proud as well to play a part in the early months of a new era of high purpose and achievement. I entered public life with a young President who inspired a generation and the world. It gives me great hope that as I leave, another young President inspires another generation and once more on America’s behalf inspires the entire world.

So, I wrote this to thank you one last time as a friend- and to stand with you one last time for change and the America we can become.

At the Denver Convention where you were nominated, I said the dream lives on.

And I finished this letter with unshakable faith that the dream will be fulfilled for this generation, and preserved and enlarged for generations to come.

With deep respect and abiding affection,

[Ted]