[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6265126,"mediaKeyId","3095240-dc9db0a420f7fb390cc5d6465c4f5ba9","parentId",3095240,"title","Senate panel advances education omnibus with temporary decoupling of formula inflation and UI funding for hourly school workers","audioSeconds",2958,"startMs",479000,"endMs",3437000,"viewUrl","/Search/View?dp=1&key=3095240-dc9db0a420f7fb390cc5d6465c4f5ba9&start=479&end=3437","thumbnailUrl","https://assets.pipeline.soar.com/3095240-dc9db0a420f7fb390cc5d6465c4f5ba9/thumbnail_479000.jpg","articleUrl","/articles/6265126/Minnesota/Senate-panel-advances-education-omnibus-with-temporary-decoupling-of-formula-inflation-and-UI-funding-for-hourly-school-workers","mediaUrl","https://secure.pipeline.soar.com/6265126-580da43f12f2095734f6208e278d6176/orig.mp4?Expires=1771100867&Signature=QNcFd5qR3ZHbB~xmypcoDc8YMmo7qYoNA6LUJavo8rZXLztAERM7TosFE16LoCdGwPprZfoxUx0nRX84~QXjqWov~u7jhg3znL8ZdmroTuHgtdleEo-HF1cnzGMiSXgdGzA8gCa21k79Pa4z9JD81g5NxwPbygxb-ARn-a2~AJ~WvTdcGxK9FVCZJY6PI6cg4O9tAySL7YE-V3gSwXspPfxEMPF2iKlxm5ndYK6wmLE-0V7348LPSriW5etSp5vXmQBAJTMV2u3QkuBlhf28us4zPnFcVIhnenCIb5ZbkyBrxe4bckpyhPd95A7ueoR7FuZgvtuDjMAr4KFP86G0pA__&Key-Pair-Id=KUT5TJCACFTXG","author","Minnesota Senate","date","2025-04-23T15:55:59.503Z","article","Senator Kunish and other education-finance authors presented Senate File 2255 to the Minnesota Senate Taxes Committee on April 23, outlining an omnibus K–12 package that temporarily decouples the basic formula from automatic inflation, raises several formula and categorical items and provides a $100 million appropriation for unemployment insurance for hourly school workers.

The bill would set a 2.7% increase in the general education formula for the 2026 school year and allow up to a 3% increase in 2027, expand funding for special education and English-learner cross-subsidy aides, double the base amount for student support aid, increase flexibility for school lunch funds and allow some districts to renew capital project levies by board vote rather than holding an election. Senator Kunish said the measure also adds long-term facilities maintenance (LTFM) eligibility for roof repairs statewide and makes a technical change to county auditor deadlines for tax increment financing districts.

Why it matters: committee members said the bill reshapes how state dollars follow schools across the next biennia and shifts one of the largest decisions — whether the formula allowance rises automatically with inflation — to future legislatures. The committee approved the bill on a 5–4 roll call and sent it to Finance.

Major provisions and fiscal details
- Formula and categorical changes: Kunish described three articles and 13 sections that touch taxes and education funding, including the 2.7% formula increase for 2026 and up to 3% in 2027 and a doubling of the student support aid base dollar amount. She said the bill also increases flexibility in use of school lunch funds and student-support personnel authority.
- Decoupling from inflation: Kunish told the committee the bill “decouple[s] the basic formula from inflation” for the biennia that fall under the committee’s budget targets, then returns the tie to inflation after several biennia. She said the decision was made to avoid “drastic cuts” to special education and English-learner programs if inflation were fully counted in the forecast. The transcript records that the decoupling is temporary and will be reinstated in a later biennium (the bill specifies the restart in a future biennium; the exact calendar date in the transcript is not specified).
- Unemployment insurance for hourly workers: Kunish said the bill sets aside $100,000,000 “for unemployment for our hourly workers,” funding unemployment benefits for school-year hourly staff over summer months so districts will not need to levy or use general fund dollars for that purpose.
- Long-term facilities maintenance (LTFM): The bill would allow roof expenses to be included in LTFM plans statewide and increase equalization aid so the change remains levy-neutral statewide. Nonpartisan fiscal analyst Jenna Holford told the committee the state-aid tracker shows LTFM equalization aid increases of $2,970,000 in FY2027, $4,920,000 in FY2028 and $5,010,000 in FY2029 tied to roof repair and replacement.
- Capital project levies and referenda: Section language would let school boards extend capital project levies by board vote; proponents said that saves districts the tens of thousands of dollars required to run renewal elections and noted past renewal success (29 of 29 renewals passed in the last eight years, per Kunish).
- Nonpublic student transportation: Committee discussion recorded a sizable reduction in state-funded transportation for students attending nonpublic schools in the next biennium; a member called the cut “over a hundred million dollars.” Committee proponents said districts could still contract to provide transportation but the state would not pay that aid.

Committee debate and concerns
Members pressed the author about the decision to decouple the formula from inflation and about where reductions were made to meet budget targets. Senator Weber questioned how the formula could still rise while being decoupled from inflation; Kunish responded that the increases are set by the bill’s numeric formula-allowance amounts already included in the forward forecast. Senator Nelson and others pressed on impacts to districts and asked how much of the total K–12 budget is the per-pupil (basic) revenue; nonpartisan staff said the basic revenue is roughly 50% of school district general fund revenues (excluding nutrition and debt service).

Other concerns included:
- Mandates and local stress: Senators in opposition said earlier biennial changes imposed mandates on districts and raised property-tax pressure; the author said the bill contains targeted support and that not all complaints represent mandates added by this bill.
- Equity and constitutional limits: In response to questions about nonpublic school services, Kunish cited Article XIII, Section 2 of the Minnesota Constitution (prohibition on use of public money to support sectarian schools) in defense of removing state-paid nonpublic transportation aid.

Action and vote
A motion to recommend Senate File 2255 as amended to the Finance Committee was made by Senator Klein and carried on a roll call. Vote_record captured at the committee roll call: Chair, Minnesota Senate Taxes Committee — yes; Senator Klein — yes; Senator Weber — no; Senator Dibble — yes; Senator Drazkowski — no; Senator Hauschild — yes; Senator Miller — no; Senator Nelson — no; Senator Putnam — yes. Tally: yes 5, no 4. Outcome: recommended to pass and referred to Finance.

What’s next
The bill was recommended to the Finance Committee. Committee members asked for additional detail in future briefings and emphasized that some choices (notably the inflation decoupling) could be revisited by future legislatures.

Ending note
Senator Kunish said the measures aim to preserve investments in special education and English-learner services while meeting statewide budget targets; opponents warned the changes could shift costs or priorities to local districts and to future lawmaking bodies.","mediaType","Video","parentTitle","Committee on Taxes - 04/23/25","oneSentenceSummary","Senator Kunish and other education-finance authors presented Senate File 2255 to the Minnesota Senate Taxes Committee on April 23, outlining an omnibus K–12 package that temporarily decouples the basic formula from automatic inflation, raises several formula and categorical items and provides a $100 million appropriation for unemployment insurance for hourly school workers.","taxTitle","Taxes, Senate, Committees, Legislative, Minnesota","taxId",15814,"location","Minnesota","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6265121,"Taxes committee backs HHS omnibus that restores provider tax, adds insurer-funded premium subsidy and draws debate over rebates and optometry scope",3363,3439000,6802000,"/Search/View?dp=1&key=3095240-dc9db0a420f7fb390cc5d6465c4f5ba9&start=3439&end=6802","https://assets.pipeline.soar.com/3095240-dc9db0a420f7fb390cc5d6465c4f5ba9/thumbnail_3439000.jpg","/articles/6265121/Minnesota/Taxes-committee-backs-HHS-omnibus-that-restores-provider-tax-adds-insurer-funded-premium-subsidy-and-draws-debate-over-rebates-and-optometry-scope","https://secure.pipeline.soar.com/6265121-a6a8abb5a2a5f1015b12f5969eb0dc39/orig.mp4?Expires=1771100867&Signature=ddLIhXtbzU6K-wsVbmftItFC9~sXS9oXlBzUkm38V5kIDBNFt8BUeBgoYXw3oGFbx1u1vif3wme0uCtbOKHdRjRZTReQS7IXTPr0vNZ~ynoiZPz8SXBvTUIcM8RHG6Av3lXAgVmRuxqMUxzbKSPAJNWZDooQBhUXdI1wut38sesQN1qIemBGgeRaWjwqhpJ1JP6-26j8mLGbBRuWalCX1-0b79UcEF3lZxSBk40VQ0dJOTlEwEuBFznG8IDBhNiKCduTj7TALGO7KigGtKaTdy6beBSHXj-Ihbvp~dt-D7sp~K-ryyiAFjZcVKGHzGjVU1vXW6MAnVvSSJQ3ehTIpA__&Key-Pair-Id=KUT5TJCACFTXG","Senator Wicklund presented Senate File 2669 to the Minnesota Senate Taxes Committee on April 23, describing a health-and-human-services omnibus that restores the provider tax to 2%, proposes a 20% premium subsidy for the individual market funded by an assessment on insurers and adds directed payments and rate increases to support hospitals and emergency medical services.

Why it matters: supporters said the measures shore up provider and hospital finances, preserve access to care amid federal uncertainty and draw federal matching dollars; opponents warned the measures will raise health-sector assessments and premiums, questioned implementation timing and tax treatment, and objected to statutory clarifications that would expand the provider tax base.

Key policy and fiscal elements
- Provider tax: The bill restores Minnesota’s provider tax to 2%. Department of Revenue estimates presented in committee show that raising the provider tax to 2% would increase revenue by roughly $401,300,000 over four years. The author said the restoration “maintains our fundamental commitment to health care access for Minnesotans.”
- A47 amendment (wholesale drug rebates): The committee adopted the A47 amendment, which clarifies that gross revenues for wholesale drug distributors include rebates provided to customers. The Department of Revenue revenue estimate tied to the amendment showed roughly $60,000,000 in additional revenue over four years. Sponsor and counsel said the change responds to a court ruling and restores the historical tax base treatment for those distributors.
- Premium subsidy (reinsurance alternative): The bill would replace the state’s reinsurance arrangement with a 20% direct subsidy for the individual market; the subsidy is funded by an assessment on health insurers, which the author said will draw federal matching funds and reduce premium costs for enrollees by about 20% compared with no subsidy. Committee discussion noted an open question about whether the subsidy would be treated as taxable income for recipients and about MNsure’s initial timeline for operationalizing such a program (MNsure’s first estimate said a 2027 start, but the author said further discussions are under way to accelerate implementation).
- Directed payments and EMS increases: The bill includes a directed payment program for hospitals funded by a hospital assessment and a 15% across-the-board increase in EMS rates (plus an additional 10% for rural EMS), the sponsor said.
- Provider and hospital assessments: Sponsor and staff said the assessment mechanisms are designed to leverage federal matching funds; committee members asked what would happen if federal approval were not obtained or later rescinded and whether collections would have to stop or be returned.

Committee debate and testimony
Committee members pressed the author on implementation timing, the tax and fee totals in the bill, and the legal and fiscal risk if federal approval is withdrawn. Department of Revenue staff (Mr. Medina) confirmed the provider tax increase and the A47 amendment revenue estimates and identified the provider-tax revenue impact across multi-year estimates.

The committee also considered the A49/A49-type amendment (offered as A49/A49-equivalent), which would have restricted who may perform certain ocular injections; Senator Klein offered an amendment restoring more restrictive language. The amendment was debated and a representative of the Minnesota Optometric Association, Shep Harris, testified in opposition to restricting the scope further, saying optometrists are trained for the procedures described in the bill and that access issues justify the current compromise language. The A49 amendment failed on a roll call. The committee adopted two sponsor amendments (A50 technical and A47 rebate clarification) and then recommended the omnibus to Finance.

Action and votes
- A50 (technical effective-date amendment): adopted (voice vote).
- A47 (clarifying rebate language for wholesale drug distributors, ties to provider tax base): adopted by roll call.
- A49 (scope restriction on ocular injections offered as an amendment): failed on roll call after debate and testimony from the Minnesota Optometric Association.
- Final action: Senator Klein moved that Senate File 2669 as amended be recommended to pass and be referred to Finance. Committee roll-call votes recorded: Chair, Minnesota Senate Taxes Committee — yes; Senator Klein — yes; Senator Weber — no; Senator Dibble — yes; Senator Drazkowski — no; Senator Hauschild — yes; Senator Miller — no; Senator Nelson — no; Senator Putnam — yes. Tally: yes 5, no 4. Outcome: recommended to pass and referred to Finance.

Outstanding questions highlighted by committee members
- Implementation timing and taxable treatment: Members asked whether the 20% premium subsidy paid through an insurer assessment would be considered taxable income for enrollees. The author said state staff are consulting with MNsure and that earlier fiscal notes had raised the taxable-income question; committee members requested updated fiscal analysis.
- Federal approval and collection safeguards: Members asked for clearer statutory language to direct the commissioner to stop collecting assessments and to return funds if a federal waiver or federal matching authority were revoked; the sponsor said the bill includes commissioner discretion to adjust assessments and he would consider clearer collection/return language.
- Total tax and fee increases: nonpartisan staff and sponsor confirmed the provider-tax revenue increase (approx. $401.3 million over four years) and the A47 rebate clarification (approx. $60 million over four years); members requested a consolidated accounting of all tax and fee increases (general and non-general fund) before the floor vote.

Ending note
Senator Wicklund said the bill is intended to stabilize provider payment rates and preserve access to care at a time of federal uncertainty; opponents said the combination of fee and assessment increases will raise health care costs and that more detail is needed on implementation and taxpayer impacts.","The committee recommended Senate File 2669, the HHS omnibus, which restores the provider tax to 2% (projected to raise roughly $401.3 million over four years), adopts an amendment clarifying wholesale drug-distributor rebate treatment (estimated $60 million over four years) and includes an insurer-funded 20% premium subsidy alternative to reinsu","actionData","errors"]

Article not found

Senate panel advances education omnibus with temporary decoupling of formula inflation and UI funding for hourly school workers

Taxes committee backs HHS omnibus that restores provider tax, adds insurer-funded premium subsidy and draws debate over rebates and optometry scope