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I I I Council Meeting Minutes June 12, 1995 Page 2 Special Order of Business. continued The seat contains a small portion of New Brighton residents who live west of Silver Lake Road. Novak feels that because the Legislature will not meet until January 1996, a special election would be an added taxpayer cost. There is strong likelihood that a primary will be needed because of candidate interest and it appears to be good sense and practical judgement to schedule the election in November. The final outcome of the 1995 Legislative Session was no new State taxes and a balanced budget. However, the session missed opportunities to work in a bipartisan fashion to pull together reform of the budget, property taxes, and school and local government financing. The tax base expansion bill which he authored and had bipartisan support for one missed opportunity. He feels that Congressional action in Washington in regards to budget cuts could have a negative effect on State government and may create a need for a special Legislative Session. Novak chairs the Job, Energy, and Economic Development Conunittee where activity involves workers comp., minimum wage, housing, public finance, and energy policies. One of the major accomplishments which may not be felt for many years and will have an effect on local government is the deregulation of the teleconununication industry. The League of Minnesota Cities (LMC) continues to provide analysis on this issue. The Metropolitan Area Tax Base Equalization Bill was passed by Legislature, but vetoed by the Governor. This bill would have resulted in substantial new monies for New Brighton and guaranteed tax cuts for taxpayers. K-12 Education is a very large portion of the budget and reform is difficult to provide equity without major ramifications. He feels there is a need to address overall reform to position the State into the next century to withstand radical changes from Washington which will adversely affect Minnesota. Minnesotans want funding to continue for K-12, higher education, health care for elderly and children, and corrections. Corrections has become a major spending area due to public concern for mandatory sentencing. Benke asked if more discussion will take place in regards to local government control of right-of-ways (ROW) in terms of telecommunication. Novak said that under this bill a city would be compensated for any decisions which could lead to disruption of the infrastructure, and a guarantee that public access programs will continue. Williams said it seems the Legislature has been pitted against local governments in recent years, and asked Novak to characterize the mood. Novak feels the worst part has passed and it's getting better, but there is needed fundamental reform of the budget and redefinition of the relationship with local government. The key to fairness is to establish processes which hold up over time and are consistent. In the 1980's, the State picked up much of the Federal Government burden and responded to public demand to lessen income taxes. The State became responsible for Medicaid and Medicare which are fast cost growth areas. As a result, a strain was put on the historical relationships with local governments. Novak did not vote for the bill to set aside sales tax revenues for local governments, and feels this was a major mistake and started the breakdown. The system needs a major overhaul to rebuild the trust factor. Benke thanked Novak for his update. Rep. Dick Pellow will present an update at an upcoming Council meeting. Special Order of Business Senator Novak