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(upbeat music) - Good evening and welcome to this 46th Season of "Your Legislators".

I'm Barry Anderson, your genial host, as I have been for 35 of those 46 seasons, and I'm delighted to be with you again for "Your Legislators."

I'll be your host and opening the conversation with our guests this evening about the upcoming legislative session, which will convene officially on February 17 and must adjourn as required by our state Constitution no later than May 18.

This is the second half of the current legislative session and features a narrow margin in favor of the Democratic Farmer Labor Party in the Senate, and for only the second time in our history since Minnesota was admitted to the Union, an equally divided house now presided over by a Republican speaker of the House.

We'll begin our discussion tonight with our distinguished panel of guests with a visit about what each member thinks are the most important issues of the upcoming so-called short session.

But before we do so, I'm going to be introducing our four panel members, which include Senator Nick Frentz from District 18, the Mankato area, first elected in 2016.

Representative Athena Hollins from District 66B, first elected to the house in 2020 and from the Ramsey County area.

Some of these metro districts will have our members give us a little better idea of where their district is rather than relying on your genial host to do that.

And then Senator Jordan Rasmusson, who represents District nine first elected to the Senate in 2022 and the House in 2020.

And finally, last but certainly not least, representative Harry Niska from District 31, Anoka County area first elected to the House in 2022.

And let's begin our program by giving our guests an opportunity to further identify themselves, talk a little bit about the issues that are of concern to them, and then we will move to more specific discussions about some of those important issues that will be before the legislature in this short session.

Let's start with our senior member, Senator Frentz.

The floor is yours.

Introduce yourself to our viewers, if you would please - Been a senator nine years, and that gets me senior member.

- Well, it's around here it does, yes.

- Thank you for that, Barry, and thanks.

Greetings to my fellow legislators.

Greetings from the Capitol where I'm stopping by for little work.

I'm Senator Nick Frentz from the city of North Mankato representing District 18, roughly described as the Mankato area and at the end of my third term in the Senate and loving every minute of it for the basic reason that I love my district and I love the work we do in the legislature.

I consider myself someone that has a good working relationship with most legislators, and I definitely think that applies to the three legislators on this call.

I serve as assistant majority leader, Chair of the Energy Utilities and Climate Committee, Chair the Pension Commission, and I'm on some other committees, commerce, rules, and I serve as the vice chair of Senate Finance, but that only matters if the bill has to do with money.

I think the upcoming session will have a little bit to do with money, as you know we project a deficit for the state of Minnesota in the out years for those that follow that kinda language, not the current biennium, but the next one.

I think that's always a question.

I think we need to talk about how to balance economic development with some of the things that workers and men and women want us to do.

I certainly think that with the election that that will be a factor, although my two cents would be a great legislator will do good work regardless of the environment and regardless of the electoral calendar, if that's the right term.

I'm running for reelection and proud of it, but I hope that I do the same work in committee on the floor and across the aisle where appropriate to see if we can get some stuff done, and that would be my short response.

Thanks.

- Thanks, Senator Frentz, Senator Rasmusson and Representative Hollins were elected the same year, but because Representative Hollins is joining us for the first time, we're gonna give her priority here.

And so we're gonna have you tell our viewers a little bit about your background and maybe talk a little bit about your district and the issues that are of concern to you.

The floor is yours.

- Amazing.

Thank you so much, Barry.

And wow, I don't usually get put ahead of a senator, so I'm feeling pretty special right now.

My name's Athena Hollins, I represent 66B, which includes the northern neighborhoods of St.

Paul.

So think from about Lake Como to Lake Phalen, that whole top strip area of St.

Paul that butts right up against Maplewood and Roseville, that's my district.

I've been in the legislature for, this is my third term, so this is the start of my sixth year and I primarily focus in the legislature on climate and energy work as well as public safety.

Those are the two committees that I have been on consistently the entire time I've been at the legislature.

Currently, I serve as the DFL House Whip with a co-partner on the GOP side, and as far as my background, I have lived in Minnesota for 18 years now, but I'm originally from Hawaii, which I always say proves how much I love Minnesota because I could be somewhere a lot warmer.

I came to Minnesota for law school and so I got my law degree in 2011 and met my husband, we're law school sweethearts, and we ended up settling here on the east side of St.

Paul, and we have two children and a very irritating dog.

So really excited to be here.

I have a lot of things that I'm very passionate about right now, but I'll hold off until we have further conversation.

- Well, very good, and thank you for that introduction.

I can say I was last in Hawaii on my honeymoon in 1983 and it is a very nice place to visit and an even better place to live, but we're delighted to have Mike.

- I don't wanna make you mad, but that was the year I was born.

(chuckles) - Ah, yes, well, I'm used to it.

It's all good.

It's all good.

Senator Rasmusson, tell our viewers a little bit about yourself.

- Great to be back with you Barry.

It's always a highlight of the legislative session for me.

For those who don't know me, my name's Jordan Rasmusson.

I live in Fergus Falls with my wife and represent five counties in West Central Minnesota.

So all of Otter Tail, Wilkin, Traverse and Grant Counties.

Then I represent half of Douglas County, so a lot of lakes up in our area.

Otter Tail County has more than a thousand lakes and agriculture is also a really important part of our district too, with much of the Red River Valley following in that district, and so a lot of diversity within the district, different types of geography, but a great area to get to represent at the State Capitol.

And just for some context on what I do at the Capitol, I serve as one of the assistant leaders for the Senate Republican Caucus.

I'm also the ranking member on the Senate Human Services Committee.

So I spend a lot of my time in that policy area.

And then I also serve with Senator Frentz on the Commerce Committee, and again with Senator Frentz on Capital Investment and the Pension Commission.

So we get to spend a lot of quality time together and get to work on different issues that come across our committees.

- It's interesting, something that we should probably have some discussion, perhaps we'll get to it today, maybe at some other program, but Minnesota has had a long tradition of bipartisan work on the pension committee, which has been not true of some other states.

It doesn't mean there aren't issues here that need to be discussed, but there has been that history and tradition here in a way in which perhaps other jurisdictions have not experienced.

I'm thinking of Illinois for example.

Enough on that.

Finally, representative Harry Niska, the floor is yours.

Introduce yourself if you would, please.

- Well, thank you Barry.

Thank you for having me.

It's good to see you again.

My name is Harry Niska.

I'm in my second term representing a portion of Anoka County where I grew up, Ramsey, which is not in Ramsey County.

It's a city in Anoka County, and then part of Andover, which is the community that I grew up in.

I get to serve for our caucus as our, as the House Republican floor leader, which is a term that we only use because we are in that historic tie.

It's the position that would be the majority leader if we have a majority.

I did have that title briefly when we had a temporary majority.

So I'm on the Rules Committee.

I previously was on the judiciary committee and the commerce committee in the house.

And, you know, the concerns I hear about most when I am out in our community is about the ways that Minnesota is sort of in the national news for all the wrong reasons.

We have public safety challenges.

Obviously, we have fraud, very, very serious fraud problem in this state that we all have to figure out how to get our arms around, and then throughout our country, everyone is dealing with affordability problems and I think uniquely in Minnesota with the high cost of government and high cost of energy and challenges that result from that.

Those are the main things that if you go out in the community that people talk to me about as the concerns that we have to deal with this year.

- So we're gonna talk about some of those major issues and I do think we need to do that, but I wanna start with a constitutional duty for the legislature and that's bonding, which is typically, although this has been less true in recent years, but is typically a back half of the session, the second year of the session task.

But let's just take a couple minutes to talk about that issue and what you see happening with the bonding bill.

Let's start with our senior member on this question, Senator Frentz, bonding, and we'll go around the horn and feel free to interrupt if Senator Frentz needs to be corrected or anything, just feel free to jump right in and take care of that.

Senator Frentz, the floor is yours.

- Yeah, thanks.

I hope that there's a bonding bill this session, and I hope it's one of the examples where the two parties can work together.

Senator Rasmusson mentioned that we serve on the Senate Bonding Committee.

I think there are four caucuses that all do good work on bonding.

We have some philosophical differences and that's okay.

I think we can cooperate and get it worked out.

Senator Draheim and I were on a panel this week where the dollar value of a possible bonding bill was discussed.

As you may know, MMB, our finance experts tell us we could do as much as 1.2 billion.

We do not have cash.

Representative Torkelson was also on that panel, but in the current biennium we have a little bit of a surplus, and I think the issue with bonding is always included.

The projects do not get less expensive if we postpone them.

So I'm a big advocate for us to do bonding and both parties would like to see working men and women be thankful for the work that we do in St.

Paul.

There is no better example than bonding.

Full disclosure, Barry, thank you Senator Rasmusson, you're a good sport, but I'm getting off the bonding committee and by that I mean in the next four or five minutes, I serve on six committees as it is, and I didn't list bonding or capital investment as we call it in the Senate because I'm gonna have our new senator, former representative, Amanda Hemmingsen-Jaeger, now Senator Amanda Hemmingsen-Jaeger, take my spot.

And so while I'm looking forward to working on bonding with the all the three caucuses, I won't be sitting nearby you Jordan in the coming session.

- Senator Rasmusson, bonding.

- Thanks Barry, and as you talked about, you know, the schedule of bonding over the past few years has been interesting to watch, right?

You know, if you look at the last two bonding bills, they both happened in budget years instead of the traditional bonding years, but I would say if you look at the last three legislative sessions, bonding bills have passed and two out of three of those sessions.

So we've had a regular cycle of bonding bills, but they haven't necessarily been on the years that they're, you know, supposed to be brought up and discussed.

I would say, you know, the nice thing about a bonding bill is it requires everyone to work together.

It basically requires bipartisanship to get to a bill.

I know a big priority for my caucus is looking at the needs of our communities, whether those be transportation, key infrastructure investment, clean water, drinking water.

Those are things that we hear about in our communities.

To give you a sense, I represent 46 cities in the district I represent, about half of them are looking at doing some type of water project over the next five years or so.

So there's a lot of demand for those dollars to come in and help local communities make infrastructure investments.

So this will be an ongoing discussion.

I got to spend a lot of time over this last year touring different communities across the state as a part of the Capital Investment Committee and to hear about the needs of Minnesotans and that work is really helpful as we get together once the session starts to figure out if there's a bonding bill what would be some of the key priorities included?

- Representative Hollins?

- Thank you.

I mean I second everything that's being said right now.

I think bonding bill is a big priority for the House DFL Caucus.

We know that there's a lot of infrastructure needs across the state of Minnesota that absolutely have to be addressed.

And so I'm very hopeful, you know, honestly, this might be the last moment where we're all in a kumbaya moment on this call because I think everybody wants to see bonding done, and we know that Minnesotan sent us to the Capitol to bring good things back to their, to our communities, wherever your community is, and there is an enormous need.

I'll also say that it's a tremendous opportunity to create jobs in these areas because being able to hire folks to do this infrastructure work really uplifts the entire community where that's happening.

And so that is obviously one of the top things, you know, that we're hoping to do because as, you know, as was mentioned before, affordability crisis is real.

And so the more that we can help generate jobs that are available to folks, whether they're in the metro area or in rural areas, that's really important for our caucus.

- Representative Niska.

- Well, thanks Barry.

Yeah, you know, we have this saying at the legislature when we have really long debate, "Everything's been said, but not everyone has said it yet."

So I won't fall into that and just repeat, you know, what has been said.

I'll just say we're gonna face a lot of challenges this year for a lot of different reasons, and I'm sure we're gonna talk about that in terms of being able to get very much done in a session where nothing can happen without bipartisan support.

Bipartisan relationships have been strained at the Capitol in ways that I don't think we've ever seen before for a lot of reasons, and last year we did show that when bipartisanship was needed, it actually kind of set the table for a broadly acceptable model for capital investment, and, you know, in a year where we're trying to find something that can get done, I think capital investment is an area where there's gonna be a lot of effort to try to figure out what can be done there.

We don't have a lot of money for the debt services has been mentioned, so that's gonna be a challenge.

But I do think that there's broad support for the nuts and bolts infrastructure and getting people to work on that kind of stuff.

So we'll have to see if that is able to work itself out.

- I wanna mention here, for those that are interested, an example of a bonding project that was of some interest to me because of family connection, but also because of my past.

This year saw the dedication ceremony for the new chemistry and chemical engineering building on the University of Minnesota campus, which was built into the shell of old Fraser Hall, which is where I went to law school in the late 1970s.

Not that anybody cares about that and there's no plaque recognizing that for which we should all be grateful, but the point was that was a very expensive project because of the nature of the equipment that's required in chemical engineering and in chemistry and the project certainly from the standpoint of the members of the committee who were there for that ceremony as I to be, I think it really is a testament to successful efforts on the part of the legislature in dealing with bonding issues.

Barry, so let's move to one of those controversial questions.

Been in the news much- (laughs) - Just a quick note on bonding, and this is a pat on the back for everyone on the call when ordinary Minnesotans ask us about bonding, I do try to point out we are a triple A rated state, which just is a fancy way of saying Wall Street sees our finances as, you know, responsible and secure, and so we borrow at a little bit lower interest rate than other states.

And while it doesn't mean we agree on some of the stuff everyone on this call's talked about, I do think it's fair to point out to Minnesotans that's whose tax money we're promising to pay back these bonds with, right?

That we are, for the moment, able to bond at a competitive rate.

And I don't know anything about the plaque on the law school, but if that's necessary for us to get on this show again, I'll certainly have a plaque made up right away.

- Obscurity is a good thing.

We'll leave it there.

All right, well let's talk about one of those big controversial issues.

Much in the news, the whole question of fraud in various government programs, Medicaid, housing stabilization, other programs.

Obviously, we don't need to replay all of the news that's come out about that.

I think we're all pretty much aware, as I'm sure our viewers are aware, there's been federal criminal prosecution with, you know, resulting convictions, but it's more than that.

And the question is how much more and how do we go about finding out about that?

Let's start with you Representative Niska and we'll go around our hypothetical table.

Talk a little bit about the fraud issue and specifically what do you see happening in this session to deal with that question?

- Yeah, I think there's gonna be a lot of effort and energy focused on that.

The people of Minnesota expect us to do that.

They've, you know, there has been, even since we left the legislative session, it seems like every couple of weeks a new, you know, shocking revelation legislative auditor saying that there were people in the human services department that were literally backdating documents during the course of an audit.

We got an Optum report that has, you know, shockingly high estimates of the percentage of, you know, autism services claims that might be fraudulent.

We had the acting US attorney estimating that it may be, you know, anywhere in the neighborhood of $9 billion of total taxpayer dollars that were defrauded.

We have to take that seriously.

I think there has been a lot of effort over the last several years to take it seriously.

Last year there was a bipartisan bill in the Senate to create an independent office of Inspector General that would sit within the executive branch and have some kind of prosecutorial power, but would be able to be relatively independent from the governor.

And, you know, that bill was not able to get across the finish line in the house.

House Republicans supported it.

We made a version of that bill house file one, but it didn't get done, and I think there'll be a lot of additional renewed effort to get that passed.

And there's gonna be a lot of other legislative proposals, I think probably in every issue area, every area of government spending where we're talking about what are ways that we can put additional controls in place, what are ways that we as the legislative branch can exercise oversight over the executive branch.

And at the end of the day, what are the things that the executive branch can do?

Because any executive could go through and say, we've got problems going on in our systems and hold people accountable, including firing them if they don't do that.

And frankly we haven't seen that from the current executive and I think Minnesotans have the right to expect that.

- Senator Frentz, fraud, what do you see happening in this session?

- I see Minnesotans saying, what are you going to do to prevent further fraud?

That's what I hear on this topic.

It's not the most prominent topic in my district now, ICE is- sorry, let me just not take this phone call for "Your Legislators" listeners.

Sorry about that.

Nick, do you not know how to turn off your phone?

Leave me alone.

I'm on "Your Legislators."

A couple things.

Thank you Representative Niska, the OIG bill was a very important part of the Senate agenda last session and it passed 60 to seven.

So Barry, your question is, what are we gonna do?

60 senators, Republicans and Democrats together thought that was a responsible move.

I will say when we had pushback, it was that it was redundant.

I do understand the redundancies, but I think Minnesotans were more interested in seeing their legislators fight to reduce fraud.

So I was okay with that to the extent it represented my words, not there's a little bit of overkill.

As you know some of the agencies have inspector generals in 'em.

I'm watching the rest of the country 'cause I want Minnesota to be a success, and we reported over $12 billion in fraud nationally up from 10 billion just the year before in the most recent year, 2024.

So this is a nationwide problem and I think it's gonna be an expensive problem for a different reason.

If we wanna make sure that we reduce fraud, it may take additional resources, more cops, more US prosecutors, you know, whatever you wanna say, and I don't get the impression from Minnesotans that they want us to spend a bunch more as state government.

So I encourage every legislator in every corner of the state to ask themselves if we're gonna increase enforcement, if we're gonna have good ideas come forward and I'm open to 'em.

Representative Niska let me know, is that gonna be less expensive?

My answer to those folks who ask that question, and most of these people don't know the name of their state senator and they don't really care, is we should only do that if the amount we're saving is worth the expense.

In other words, don't just ask what it costs, what it pays.

I do wanna flag a couple things that I hope help Minnesota with the fraud debate.

First of all, I'm a supporter of Senator Klobuchar for governor.

She has a history of adding staff in the prosecutor's office to help combat fraud years ago.

I think if that's someone that's coming forward in the future years, if she was lucky enough to win, that would be the kind of attitude to make it a priority.

And then I am concerned, and I don't mean this to be a partisan comment, but you mentioned the acting US attorney Representative Niska, he and both of that office have quit now and we're getting reports that they're not prosecuting any fraud since December.

That does not help us.

Now, those reasons they gave us for quitting were not related to the Minnesota State Legislature in my opinion, but let's face it, those are our real top cops.

They were outstanding at it, especially Joe Thompson and they're not helping the state deal with its fraud issues.

So we got some work to do there too.

Bottom line, like bonding, fraud should be a bipartisan issue and you can count me in for help for reasonable solutions.

- Representative Hollins, fraud questions.

- Thank you for the question.

This is a complicated one, but I wanna say first of all that fraud has no place in Minnesota or anywhere.

Public dollars deserve to go to public goods.

And I would say that we care about this passionately because we want those tax dollars to be taking care of the people who need it most.

And I think it's especially important for folks to recognize that nobody's more upset about this than those of us who allocated those dollars to do good work.

The reality is this is a long time coming and it started honestly way back in the Reagan era when we started privatizing goods and services that the government used to provide to individuals.

We have seen a number of places where having that middleman be directing where the money goes, just creates an opportunity for fraud to occur.

So I really do think that we have to step back a little bit and rethink the system in which we are living.

Now, what I will say is we passed a number of bills to help protect against fraud, including making kickbacks explicitly illegal, making sure that we are allowing the Secretary of State to do more oversight, having the BCA have oversight over what's happening so we can do more criminal charges for the fraud that is occurring.

And it's important to note, I think that Aimee Bock, the head of Feeding Our Futures, was arrested and prosecuted while we were in DFL Control, right?

There's a reason for that because we care about where that money is going.

We want to feed children.

That is important to us.

Now, I believe that there are a number of things that are gonna come forward and we're gonna continue having conversations about this, but I really do think that it is more complicated than anybody is willing to concede.

And the reality is we have to figure it out.

We are charged with that as elected officials.

We know that this is not acceptable for anybody and people are looking to us to come up with solutions.

So I think that's really what we're gonna spend our time doing.

I do think that Senator Frentz's point is well taken, that the actual agencies that we're looking into fraud and supposed to be prosecuting fraud are now quitting because of being overworked because of other federal overreach that is happening within the state of Minnesota.

I think the reality that we see right now is that we were told ICE was coming into Minnesota to deal with fraud and in fact they have done nothing to address fraud and made it more difficult for the people who are in place to actually do their job to address fraud.

My final point that I'll say is I was part of the negotiations that we did for the power sharing agreement, and I think we came to a really good place on our power sharing agreement, I will admit that, with a tied house, but I know that the Republicans fought really hard to have a fraud committee that had a majority of Republicans on it, and that was chaired by a Republican Kristin Robbins and they have not heard one bill on preventing fraud, not one.

And they have been brought up, there are bills to address this and, you know, I question who wants to do something about fraud versus talk about fraud?

The DFL House Caucus wants to do something about it.

- Senator Rasmusson.

- Thank you Barry.

And when I talk to my neighbors, they are outraged by this human services fraud crisis here in our state.

They are generous people.

They work hard for their money, they pay high taxes, some of the highest in the country.

And to learn that billions of their hard earned tax dollars is going to fund criminal networks is outrageous to them, and it should be.

One of the challenges we're facing is denialism from the Walz Administration and from the Department of Human Services.

We just had a hearing in the Senate over the last couple weeks where we had the acting commissioner of the Department of Human Services.

I asked her, does Minnesota have a fraud problem?

Why do we have such a big fraud problem?

And she asserted that Minnesota's problems are just the same as other states, that we don't have any fraud issues that are worse in those states.

And I think Minnesotans have seen over the past few years that that's incorrect, that we have a serious fraud problem.

Just in one of the communities that I represent, there was an individual who was charged and said that he was feeding 6,000 kids a day, seven days a week in a community of 2,500 people, and when he sent in the invoice it was paid by the Minnesota Department of Education.

We had this prepayment review process that the Walz Administration has implemented that reviewed 100,000 claims across 14 high risk program areas that they identified, and they forwarded zero of those claims to the Office of Inspector General for fraud investigation.

The challenge is that DHS can't tell a good provider from a fraudulent one and the capabilities of the agency and the willingness to go after fraud just isn't there.

So I think one of the things you'll be, you know, hearing about this upcoming session is we have to change how we budget.

A lot of our human services programs are effectively on autopilot.

They're forecasted programs.

So if the spending goes up by 200%, the state just writes more money and we need to have triggers built in where if you have a program that's a certain amount over forecast, then we automatically trigger an audit.

So we know what's going on, Minnesotans know where their tax dollars are going, and we can't just be writing blank checks to these state agencies anymore.

- Since we're veering into budget territory, this is a good time to talk about some budget issues.

One of the programs that came out of the immediate past session, not the current legislative session, was the Parental Leave Program.

We in fact had several discussions about the Parental Leave Program as it was being crafted and passed by the legislature.

There is some indication that more people are taking advantage of the program than was previously expected, and there may be some budget issues there.

So let's talk about the Parental Leave Program.

I want to give Representative Hollins, give you an opportunity to talk about this.

I know this was a priority for the Democratic Caucus two years ago in that session.

Tell us a little bit about what's happening with the Parental Leave Program.

What budget issues, if any, are presented and what you see happening in this session, if anything?

You're on mute.

- You think I'd be better at that after doing Zoom- - Very good.

For five, six years at this point.

Sorry, that's a great question because this was one of our priorities going into the 2023 session, and it's something that's been worked on progressively for almost a decade at this point.

I believe that we really see this as a fundamental right of Minnesotans.

It's something that we really truly believe in because we know that folks need the time to take when they have had a child or if they're taking care of an elderly loved one, that they deserve to have that time to not worry about what's gonna come next, and in fact be able to continue their standard of living and support the people who mean the most to them.

So it really is important.

And what I see from these numbers where we think that there are more people than we anticipated, is just the fact that there really is this need that it exists in the world more than we potentially more than we had anticipated.

And I think that what that speaks to is the fact that people are caring for their loved ones in ways that they were not able to previously.

And I don't think that's a bad thing.

If we say we care about our elders and elderly individuals and we wanna make sure they're being cared for, we want family members to be able to do that.

If we feel like having children and increasing our population and making sure that there's bonds between parents, they should be able to do that.

And so I do think this is a really important topic and something that deserves attention, but also we have to figure out a way to make this possible because other states are figuring it out and if they have it and we don't, we run the risk of losing the people who are here because folks will leave.

And I have met people who said they need help to take care of their, you know, their parents who need assistance.

They have to take time off to take them to appointments.

I think it's really important that we accommodate that as best we can.

So I fully anticipate there'll be conversations about this at the legislature and obviously, you know, I don't wanna say it's a work in progress, but we're working on it constantly.

And the truth is most big programs that get rolled out, it does take time to get them exactly right.

And so we're still working on it and I fully anticipate having real conversations, especially with this development with our budget.

We have to figure out how we're going to make it work, but I do believe that it's possible - Representative Niska, maybe we'll go to you next parental leave, budget issues, et cetera.

- Sure, thank you.

Yeah, and, you know, this ties to the previous conversation we're having about fraud in the sense that people respond to incentives, especially people who are immoral or immoral or wanna scam the system.

And the problem is we have to design systems that make sure that we're, we have safeguards in place that we're not creating a situation where people are being incentivized to try to cheat the system.

And we have to set up a system where businesses will still be able to survive and thrive in Minnesota.

So people have a job that they are able to take leave from.

Many employers want to be able to give their employees generous leave policies, and, you know, it works in varying ways for different businesses, but I've heard from a lot of, not just private businesses, but a lot of our cities and our school districts that are really struggling under the weight of this new program.

Not just the taxes that it imposes on each worker, but also the burdens it imposes on, you know, in terms of staffing, in terms of figuring out how to make things work, especially for small companies.

Some companies are gonna choose not to hire people in Minnesota.

Some companies are gonna choose not to get going because they can't figure out how to logistically make things work under this one size fits all government program.

There are other ways we could have designed it.

And the way that was designed, that under one party Democrat control in 2023 is gonna make it very, very challenging for Minnesota to continue to afford this program going forward.

And for our private economy to still be able to thrive under the weight of this program.

- Senator Frentz paid family leave and I, you know, anybody else should jump in on this if you have an answer to this question, but I'll ask it to you, which is, do we know how much out of whack the projections were for paid family leave and what we're actually seeing going out the door in terms of benefits paid?

And it's kind of an accounting issue more than anything else.

How much of a challenge is there in what appears to be some difference between budgeting and the amount actually spent?

And in addition- - Sure.

- To whatever else you may wanna say about it, let me give you the floor.

- I appreciate that.

If you believe the early returns we're running a little higher on what I would call the utilization, the number of people that are taking time off work under this law.

Representative Hollins take would be, those are all legitimate claims.

I would probably guess that the truth is closer to there is no greater frequency of taking advantage than there is in the earned sick and safe time, but it's okay if we disagree.

I have not done an in-depth study as far as the cost.

The employers of course have to send up to the state 0.88.

That's the total tax and they can collect up to half of that from the employee.

Here Barry, you have struck an important note for Representative Hollins, representative Niska, me and Senator Rasmusson.

Because Senator Rasmusson and I authored a bill, I was the chief author to change paid family and medical leave last session.

And my feeling was we wanted to bring the small business owners, those businesses that don't have an international presence, but still have some Minnesotans that love their families more on board and they were not fully on board, and I get nervous when we're doing stuff that small business owners don't like.

In my world, Mankato economy, which is typical of a regional center, we can't have great jobs without great employers.

So passing legislation where they're like, I don't know if I like that part.

You asked another great question, Barry, which is how do we compare, for example, school districts, which has been mentioned are a little bit nervous.

Massachusetts has a paid family leave program, which was somewhat the model of Minnesotans doesn't have schools in it.

So we chose to go a little farther, including the definition of who's eligible than I would've, but I'm cheering for the program to be a success.

Everybody loves the idea that someone that wouldn't have got time off to have a baby will now get time off.

I think the question becomes, when it's all said and done, how excited are we, will we wanna make changes?

Appreciate that Athena, very much that you're open to further dialogue.

We made changes in earn sick and safe time when we felt it was appropriate to do so.

And I for one, as a Democrat senator, would be open to that discussion.

We have got to get our state's economy to a point where there's some, I guess I would say synergy between the state and the business community.

We are competing with other states for businesses, and there's one special Mankato flavor to this too, excuse me, Judge Anderson for going this way but there's also the question of can you replace the worker?

As you know the Paid Family Leave Bill goes to some lengths to say to an employer, well if someone needs to take this time off, here's how we'll help you replace them.

Well, in a time of low national unemployment that creates a little bit more question, not is there a state law that will help me, but can I find somebody?

And as you know, Mankato is a full percentage point lower in unemployment.

I'm a small business owner, have a law firm that I'm a partner in, had the bagel shops had a car wholesaling license.

If I can't find someone to replace that now I may really have a problem, and that includes an employer that has three employees.

So I want families to be safe.

The bottom line also included, this was referred to, we want a great working relationship for our employers and employees, and we have taken the state and said, hey, the government says you have to do this for your employees.

I prefer it where possible for those two parties to kind of come together and say, all right, here's what we're gonna do, and allow it to be tailored a little bit more.

I want to add it, I probably should have thrown this in earlier since I said one final thing and here comes my second final thing.

Never mind all that right now.

The software aspect- - You gotta pass Senator Frentz, you're a lawyer.

So that's the way that goes.

Go ahead.

- The other senator.

- A man of few words.

Touche Representative Niska.

We had a question a year ago whether the software itself would work and our government's had some problems as states do with software rolling out, think MNLARS.

I was persuaded last year and Senator Rasmusson and I had talked about that aspect of it.

I talked with Deed, I met with all their top software programmers.

They persuaded me that it will roll out successfully from a tech standpoint.

I do think that concern's been answered.

So far, so good on that part.

In other words, whether we like the merits of the program, we can debate.

I think the computers are running in a way that I had some heartburn over that too.

I think by March or April there'll be more information on the utilization.

And I think we should talk about it if we're signaling our businesses, we wanted 'em to be welcome here.

We have to listen when they say, can you do this or can you do that?

- Senator Rasmusson paid family leave, your thoughts?

- Yeah, Barry, I mean this is effectively a billion dollar payroll tax on Minnesotans.

So I think the first priority is to protect those tax dollars and make sure that they're actually going where they're intended.

I also have concerns about potential fraud in this program.

When the deed commissioner who's charged with running this was asked about, you know, who's gonna be the watchdog looking over fraud?

His answer was, "I guess we'll find out," and to me that leaves me concerned that the dollars aren't gonna go where they're supposed to go and could instead go to bad actors who are taking advantage of this program.

I also am concerned that, you know, given the parameters of this paid leave program and that it is effectively more generous than a lot of other states in the country that have tried to launch this that there is going to be an explosion in the cost and that the payroll tax is gonna have to go up and up to sustain the program.

So I'm concerned about the ballooning cost.

I think an action that we could take this legislative session would be passing the bill that I've worked on with Senator Frentz that would change, you know, some of those key parameters to make the program more sustainable, more affordable for Minnesota businesses, the district that I represent borders both North Dakota and South Dakota.

So those, you know, tax differences between the states, differences in employment law can really make a difference on small businesses' ability to compete, and unfortunately we're losing a lot of those entrepreneurs, those investments, you know, those jobs to the North Dakota and South Dakota side because of the cumulation of more taxes and more mandates.

And so I think if we can take, make some common sense changes that'll actually help make the program more sustainable this session, that would be a step in the right direction.

- All right, now any legislative session has various applicants who come to the legislature with issues that are of concern to them.

Over the course of the years of this program, two topics that have come up that have been great interest, particularly rural communities, but not just to rural communities tend to be, they're not sort of the most important issues that the legislature deals with, but they're frequent flyers, let's put it that way.

And they are local government aid and local sales taxes.

And I'm wondering, let's start with you Senator Rasmusson.

You haven't had an opportunity to be the first one out of the box, here it is.

Can you tell us if anything's going to happen on any of either of those two topics dealing with local government aid or local sales taxes?

- Yeah, great question.

You know, there is a moratorium on local government sales taxes for the last few years.

And so I think this session we'll see a number of proposals from communities.

I know the Senate Taxes Committee is, you know, taking resolutions and will be considering those.

So I definitely think that will be in the mix and we'll just have to see ultimately what, you know, passes the legislature at the end of the day, - Representative Hollins, local government aid, local sales taxes.

What do you think?

- I mean, I think that is really an important question and certainly with LGA, it's something that we spend an inordinate amount of time thinking about even in the metro area because we have a huge population density and in fact our property taxes have continued to go up to support that population density because our LGA percentage is minuscule, and I think we were able to raise it a small amount.

But I think the real, I mean the real question, right, this gets at the heart of a question that we do get approached about a lot, which is affordability.

People wanna be able to afford their groceries, afford their rent.

People want to make sure that they are able to, you know, make ends meet and take care of their kids, and we really believe that it's important that a regular person working a regular Average Joe job should be able to support themselves and support their family.

And when we talk about taxes and we talk about local taxes, that's one of those things that just gets added onto the plate, right?

Where there's just a little bit more and a little bit more, and so it is something that we have to think about.

Even in my district, you know, in St.

Paul, we have a number of people who, you know, this is one of the few places in the metro that you're able to buy a house if you are lower income.

And because property taxes are going up, that's something that they are no longer able to do.

They're not able to stay in their homes.

So if we wanna see stability and we wanna see individuals really being able to live and thrive and frankly live the American dream, right?

The house with a picket fence and a dog and two and a half kids, we've gotta get our tax situation under control.

And I think it's something that we need to think broadly about and make sure that we're doing it thoughtfully.

- Representative Niska, your thoughts?

LGA and local sales taxes?

- Yeah, well, I think the topic of local taxes is an important piece of the affordability problem that we're hearing about from a lot of our constituents.

A solution like LGA where we're talking about trade-offs between one community and another, that's probably not something that's likely to pass, given the dynamic we're talking about right now.

Really, a lot of our local governments are struggling because of a lot of the things that we were talking about before, earn sick and safe time, paid family medical leave and other things that the state has imposed on our local government's duties to, you know, in terms of social services that haven't come with the technological advances and the other resources that local governments need to do those things.

Those are the ways that I think we could in St.

Paul really do something about property tax.

The property tax burden that Minnesotans are dealing with.

But if we're talking about something that, you know, has been a challenge before because, you know, LGA deals with trade-offs between different communities.

You know, I'll go back to a comment I made earlier.

It's gonna be a real challenge to have the bipartisan relationships that we need in order to get things like that done.

You know, just thinking about what Minnesota has gone through and what legislators specifically have gone through in the past several months since we gaveled out of our special session in June.

If you were conspiring to come up with a set of events that would make it difficult for us legislators as human beings to be able to work together in a short session and get things done across party lines, it would be hard to come up with a set of circumstances that would be more difficult.

Make that job more difficult.

You know, whether you're talking about an assassination, an attempted assassination of legislators in Minnesota followed shortly by another high profile political assassination sort of coming from the other direction a few months later.

And then the tragic, you know, school shooting and enunciation and the more recent situation around immigration enforcement were coming in with already with a short session in a narrowly divided legislature.

And it's gonna be very, very challenging for legislators.

We're all human beings, right?

And in order to get things done, we have to be able to work with people who don't see eye to eye with us, and it's gonna be a really challenging.

And so, you know, when you're talking about are we gonna solve the LGA problem that has been a tough nut to crack in the Minnesota legislature in the past, I think that's unlikely to happen along with a lot of other things that have been difficult problems to solve in the past.

- Senator Frentz, LGA and local sales taxes.

- Property taxes don't care whether you had a bad day.

Property taxes are regressive, they're going way up, and that is a real issue and we're headed into a biennium in '28, '29 where we say we're short billions of dollars.

So I would say, this is why I mentioned the budget at the beginning.

Local government aid, county program aid, we're hearing from the counties, Hey, the cost of things keeps going up, so how are we gonna make these ends meet?

Here's the way I would look at that part, Barry.

We should not be asking the people of Minnesota, those working men and women, those families, to tighten their belts any more than we ask the state government to tighten its belt.

We're all in this together, but counties have a legitimate beef.

Some of it is true, the federal changes are really painful, SNAP comes to mind.

But regardless, the best part about the state budgeting process is still the hardest part.

It must balance.

So we're gonna have to answer some tough questions, and property taxes made people miserable, cause people to say they can't afford their homes, and I think that is a much bigger issue than people give it credit for.

As far as the sales tax issue, I think we should let local communities where possible, make their sales tax option questions for their own voters.

If the city of North Mankato, where I live, has a local option sales tax and they think their voters want to do it and they have some retail in their city, I say let's talk about it in committee and run it through the regular process.

I can't resist Representative Niska, you know I like you, I hope that never gets out, but we are talking about an opportunity for bipartisanship and I think leaders like you and me, and the other representative and senator on this call, we could set an example.

And I think in my district I tend to hear, I don't care if the two parties are fighting.

So what else is new you?

I want you to go up there Nick and vote on the things that your district wants to vote for and be a "yes" if you want us to be yes, and "no" if no.

And I think if we do that and we set that example, we'll pass a little bit more, and this question is really central.

We're not making it better to kick the can down the road.

We're looking at property tax increases in some communities of 9%, 10%.

Do you know how much of a fuss Americans make if the cost of coffee goes up 5%?

They freak out.

And so those property taxes, again, sometimes for families that can't afford that increase, that's a real problem and we have to reign in that issue one way or the other.

We can increase taxes and if you make more than $5 million a year, I'm interested increasing your household taxes, but if you are a working man and woman, that's not a reasonable approach and we gotta look at some other levers to pull.

- Let's use that as a jumping off point to talk about the budget issues generally.

My understanding is that as has been pointed out, the budget that is of concern here is not this biennium, but the next one.

And the question is, should we be doing anything in this biennium?

Representative Niska, we'll start with you.

What do you think?

- You know, this circles back to the conversations we were having earlier, especially about fraud, absolutely.

We should be trying to figure out how to make sure that every single tax dollar of Minnesotans is dealt with responsibly.

We do have a projected deficit.

From the end of last legislative session to our November forecast, we saw that projected deficit going forward.

I think triple.

We're waiting for a February forecast that, you know, I'm worried is gonna show that continuing to go in the wrong direction.

And as Senator Frentz said, we do have to balance our budget and that's very different on a state level than what the folks in Washington do.

Or they just, you know, press another number- another button on the machine and increase the amount of money that they are able to spend.

We have to get our arms around that.

The sooner we do that the better.

And Senator Frentz, I sure hope that we are able to get to a place where we're able to tackle some tough issues in a bipartisan way.

But, you know, I'm realistic about the challenges that we're gonna face coming in mid-February, being constitutionally obligated to go out in mid-May, and I'm concerned about the ways in which our bipartisan relationships have been strained by the events that have happened in Minnesota over the last few years.

Does that mean we shouldn't try?

Of course not.

Of course not.

We have a job to do.

We have to go down there and do it, but I am really worried about the way whether the trust is gonna be there, whether the conversations are gonna be there.

Not, you know, the folks on this call, but, you know, in the 67 rank and file members of the House and the 67 rank and file members on each side of the House and the 34, 33 in the Senate.

I think people out in Minnesota know it really understand how much those personal relationships really do matter.

The trust that gets built up, the conversations that happen, they matter in terms of getting that work done, and those have been strained in ways that people, I think it's very difficult to put into words the way that those relationships have been strained.

- Senator Rasmusson, general budget issues.

- The state of Minnesota has a problem.

We're spending more money than we're taking in revenue, and I think it's very clear to me that our state has a spending problem.

If you look at our taxes, we're a top five tax state in pretty much every metric.

And I think Minnesotans, especially when they're facing issues of affording their family budgets, they expect us to put their family's budget ahead of state government, and we need to look at how we can rightsize state government to focus in on the key priorities of our state.

- Representative Hollins, you get the last word on this, about 30 seconds.

Fix our state budget in 30 seconds.

Go!

- Tax billionaires.

Tax multimillionaires.

Boom.

(laughs) - Boom.

(laughs) - Multimillionaires need to pay their fair share.

Working people are already taxed to the brim.

We can't do any more for them.

We have to look at the people and the industries that are making billions of dollars a year and make sure they're paying their fair share.

- I'm gonna thank our panel for their participation this evening.

I wanna remind those of you who are watching tonight that we'll be coming to you again with at least two additional programs.

One around the time of the Easter break, when the legislature will go home for a period of about a week or so.

We will be back again with another program, and then as has typically been the case for all of our 46 years, we will have a program at the end of the year to summarize all that's taken place.

Again, I wanna thank our panel, lots of very complex, difficult issues.

I appreciate all the time you put in.

We're grateful to have you here, and we thank you, our viewers, for joining us.

We look forward to having you back with us in a couple of months.

Thank you and goodnight.

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