MN Hospitality Advocate

Can Hospitality Escape this Session Without a Tax Increase?

Posted in Elections, General Advocacy, Restaurant Issues, State Laws, Uncategorized by hospitalityminnesota on May 14, 2010

Given the tremendous budget pressure the legislature has faced throughout the session, now amplified by the unallotment ruling of the Supreme Court, to escape this legislative session without a tax increase would be a major industry accomplishment. With just days to go and a major gap before them, several legislative leaders brought forward the idea of a liquor tax.

Our folks on the inside suggest that this is not likely to happen this year for a couple of reasons. First because Governor Pawlenty has been resolute in his opposition to tax increases. Second, because we believe DFL leadership has liquor in its sights for the coming legislative session next year, when the state faces again a huge budget shortfall and a new governor sits at the State house.

So, though it’s still too early to bring out the cheering squad, we are cautiously optimistic that we escape this session without any statewide lodging, liquor, food or beverage taxes. If we do avoid a tax consider that a tremendous victory for our industry.

What about the impact of this session regarding other areas of operation? Thus far, we’ve managed to fend off virtually all harmful legislation, and to modify those we haven’t defeated, such as ignition interlocks. We’ll be sure to provide an industry wrap up outlining the impacts of the session overall.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

What the Unallotment Ruling Means

Posted in Uncategorized by hospitalityminnesota on May 5, 2010

The Minnesota Supreme Court in a 4-3 decision today ruled that Governor Pawlenty crossed a constitutional line into legislative turf when he used his unallotment authority to unilaterally cut spending by $2.7 billion last July to balance the state’s budget. While the court ruled on only one specific instance of unallotment, the general consensus is that the application of the ruling is much broader, calling into the question all of the Governor’s unallotment decisions.

With just a few weeks left in the session, the legislature and Governor must now agree on a course of action. The legislature could simply ratify the cuts Pawlenty made, thereby making “legal” his previous action. The legislature could ratify some of the Governor’s unallotments, such as the $1.5 billion education shift, and then argue over other cuts to achieve a balanced budget as mandated by law. The legislature could reject all of the Governor’s actions, creating a situation in which the full deficit must be addressed with new cuts or revenue streams (and it seems unlikely that Pawlenty would support any tax increase). This ruling will likely throw this session into many late nights over the next few weeks.

To read more about the unallotments, check out the Minnesota Public Radio NewsCut Blog or MPR NewsQ.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Vikings Day at the Minnesota Legislature

Posted in Uncategorized by hospitalityminnesota on May 5, 2010

We began today with an early morning hearing on the Minnesota Vikings multi-purpose stadium before Chairman Rep. Gene Pelowski and the House State and Local Government Operations Reform, Technology and Elections Committee (known as Gov Ops). Last night, the stadium bill passed out of the Gov Ops Local Government Division, but with substantial changes.

The new taxes that were initially proposed to fund the stadium were removed from the bill, and an alternative version that captured revenue from existing Minneapolis taxes instead became the focus of the funding. The bill under consideration this morning takes entertainment, lodging and sales taxes that were first applied in Minneapolis to pay off the Minneapolis Convention Center (MCC) bonds, which generate approximately $50 million per year, and shifts a portion of them to pay off football stadium bonds ten years from now, when the MCC debt is retired. For the first 10 years, the Minnesota Vikings contribution to the project would be used to pay the debt service.

The vote was close, but ultimately it failed in Gov Ops by a 10-9 vote. The bill thus remains in the Gov Ops Committee and it appears unlikely it will get another hearing this session. At the same time, a similiar bill was heard before the Senate State and Local Government Operations and Oversight Committee, chaired by Senator Ann Rest.

John Luke, General Manager of the Hilton Hotel Minneapolis, was among those to testify in support of the bill on behalf  of Hospitality Minnesota and its three Associations. The City of Minneapolis expressed concerns with the bill, as it has designs on the funds that will become available once the MCC bonds are retired. The city would like to use the money for convention center renovation, capital improvements, the Target Center and perhaps other projects.

With the stadium action over the past few days, it appears the issue will not be resolved this session. It will have to be resolved next session as the Vikings lease at the Metrodome expires and they will not re-sign there.

As these two hearings were being conducted, the Minnesota Supreme Court handed down a ruling regarding Governor Palwenty’s unallottment last year of $2.7 billion. The court ruled 4-3 that the Governor had overstepped his authority with regard to one particular unallotment, which calls into question the legality of the remaining unallottments. More in my next post.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Legislative Fly-in to DC Yields Great Results

Posted in Lodging Issues, Restaurant Issues by hospitalityminnesota on April 18, 2010

The Minnesota delegation just returned from Washington, DC where we had great success in meeting with our Congressman and Senators. We had a chance to visit personally with both Senators, as well as meeting with four of our eight Congressman. We met with leading aides for the remainder of the representatives.

Key issues we discussed included food safety (H.R. 2749 and S. 510); Restaurant Depreciation (H.R. 4306); Business Meal Deductiion (H.R. 3333 and S. 2905); Interchange Fees (H.R. 2382, H.R. 2695 and S. 1212) and Paid Sick Leave.

The general consensus among the delegation was that Paid Sick Leave will not move this year. Democrats and Republicans alike are loathe to consider any legislation that might have a negative impact on jobs, and mandating paid sick leave is recognized as one issue that would likely result in job loss. Several key speakers also suggested that the “Card Check” legislation, otherwise known as Employee Free Choice Act, will not see movement in the near future. But they cautioned that the industry needs to remain vigilant.

Food safety will likely be taken up by the Senate in the next few weeks and can have a major impact on our industry. The National Restaurant Association is deeply engaged in the discussion and we support efforts to improve the safety of products that are purchased by restaurants.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Minnesota Legislature Pace Slows

Posted in Elections, General Advocacy, Health Care Reform, Lodging Issues, Resort Issues, Restaurant Issues, State Laws by hospitalityminnesota on April 14, 2010

The Minnesota legislature is in a bit of a holding pattern right now. Here’s the situation. State legislators facing a $900 Million budget shortfall have made cuts to achieve about 1/3 of the necessary savings. They are holding off on further action awaiting word on the impact locally of the federal health care insurance reform bill. The state is anticipated to receive some additional dollars as a result of changes in that legislation, but it’s unclear the full amount.

In addition, the party conventions are slated to take place in just a few weeks. Because so many current legislators in leadership are running for Governor, they are reluctant to take controversial stands on issues such as budget cuts prior to the nominating conventions. Much of the remainder of the session will depend on the outcome of the nominating process. We’ll be on top of it and keep you posted.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Tagged with: , ,

Health Care Reform Isn’t Over Yet

Posted in Health Care Reform, Lodging Issues, Resort Issues, Restaurant Issues, Tourism Issues by hospitalityminnesota on March 24, 2010

While you might have thought the health care debate was over, it isn’t yet. Many potential steps remain before the final shape of this legislation is determined and its changes take effect. Today, the President signed the Senate-passed (and now House-passed) health bill into law. We now turn our full attention back to the Senate where Senators will begin tangling over the “fixer” or “reconciliation” bill (also passed by the House Sunday evening).

There are many concerns we have for the reconciliation bill, but below are some of the more troubling provisions for employers:

1. Employer mandate: The penalty for the “free rider” increases from $750 per employee to $2000 per employee if you don’t offer insurance for more than 50 employees. If you do offer insurance, but the employee share of premiums is “unaffordable” (greater than 9.5% of income), and that employee goes into the exchange and receives a tax credit, your fine is $3000 per employee!!

2. For the first time, it uses part-time employees when calculating how many full time employees for that determination of “over 50 employees”. The senate bill was silent on part-time workers.

3. A new 3.8% “Medicare” tax on non-wage income would be placed on high earners, income from interest, dividends, capital gains, and some profits from investments in partnerships and S-corporations. The revenues from the tax on unearned income would be credited to the Supplemental Medical Insurance trust fund. If the unearned income tax-and other proposed tax hikes on high-income individuals included in the President’s FY 2011 budget-become law, a high-income taxpayer could have an effective tax rate on capital gains and qualified dividends of 23.8 percent. Significantly, however, the effective tax rate on nonqualified dividends would be 43.4 percent.

4. The Cadillac tax on “high value” health plans is delayed from 2013 to 2018 – but it will now be only indexed to CPI inflation (Senate bill was CPI+1%). Since medical inflation is so much higher than CPI, this will, without a doubt, become the next Alternative Minimum Tax (AMT) and catch more and more plans every year.

5.  While stating they have removed the “Cornhusker Kickback,” the reconciliation bill also leaves in place special deals for Louisiana, Connecticut, the frontier states, and others, while adding in new special deals for states like Tennessee.

If the Senate makes any changes at all to the reconciliation package, it will have to go back to the House for yet another vote before going to the President for his signature.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Hospitality and Tourism Day at the Capitol a Huge Success

We’ll start with the numbers: We had more than 215 restaurant, lodging, resort and campground operators at the Minnesota capitol yesterday as we lobbied on behalf of one of our state’s major industries. John Edman, Director of Explore Minnesota Tourism, reminded us in his remarks that the leisure and hospitality industry generates 16% of the state’s sales tax revenue, and is responsible for 10% of the state’s jobs.

Our industry advocates heard about a number of key issues in a morning briefing session. In addition to updates from our Lobbyists Tony Kwilas and Bob Vanasek and myself, we heard from Joan Archer, Executive Director of the Minnesota Beverage Association, about efforts to build a coalition highlighting the positive things our industry is doing in the area of obesity and fighting back anticipated sweetened beverage taxes. Other key issues we discussed included the Post Labor Day School Start, mandatory breaks and sick time, a multi-purpose stadium for the Minnesota Vikings and other events, ignition interlocks and vacation home rentals.

After tremendous visits on the hill, we wrapped up with a new legislative reception at the Kelly Inn featuring some 20 convention and visitor bureaus who did a beautiful job showcasing their communities and highlighting the importance of hospitality and tourism in communities across the state. Some 40-50 legislators attended the reception even in the midst of late-night committee meetings and a chaotic night before the final committee deadline.

I want to use this opportunity to thank the Hospitality Minnesota team for their tremendous efforts in creating a great event, and the Minnesota Association of Convention and Visitors Bureaus for being tremendous partners.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Industry Scores Major Victories; Labor Day and Adult Entertainment

Over the past two days, the hospitality industry scored two major victories at the legislature. The first was defeat of a government operations bill that stepped deeply into the business practices of our industry. Wednesday morning, we defeated H.F. 3287 in the House State and Local Government Operations Reform, Technology and Elections Committee that would prevent state workers from booking rooms or meetings in Minnesota hotels that offer pay-per-view adult movies that link sex with violence. I was the sole testifier against the bill authored by Rep. Haws (DFL-St. Cloud), which has a companion Senate bill, SF 2861, authored by Sen. Taryl Clark (DFL-St. Cloud).

In my testimony, I chastised the advocacy community for turning immediately to legislation to solve this problem. I offered to sit with the advocates (groups seeking to combat sexual violence) to have a discussion about the issue and allow industry to gain a better understanding. I further suggested that the vast majority of this material is not viewed in hotel rooms, but rather on the Internet. We will continue to monitor this issue, but certainly believe this legislation simply went way to far in dictating business practices for our industry.

In the second victory, a house Education Committee stripped a Post Labor Day school start repealer from a Committee Bill by a vote of 11-9. This narrow victory in an Education Committee is a significant victory for the industry. While Labor Day school start opponents will likely try and amend bills on the floor of the House or  Senate to continue a repeal effort, we stand in a strong position given that the committee has spoken. In part, committee members suggested that we ought to give the 25 districts in the Southwest corner of the state time to work their experiment before we make other changes in the Labor Day statute. In particular, we thank Rep. John Ward (DFL-Brainerd) for his work on the Labor Day issue.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Commissioner Rules Against Industry

Posted in Campground Issues, General Advocacy, Lodging Issues, Resort Issues, State Laws, Tourism Issues by hospitalityminnesota on March 16, 2010

Education Commissioner Alice Seagren ruled late Friday against the industry in allowing a consortium of 25 school districts in the Southwest part of the state to start school before Labor Day. This ruling could have a devastating effect on the Post Labor Day school legislation, in that other districts are sure to copy this effort in an attempt to circumvent the Labor Day start law.

In addition to consolidating calendars and working collaboratively, the districts argued that they needed additional days throughout the year to boost test scores on standardized tests that all students take in the spring. They intend to start on August 23. It will be extremely difficult to determine what effect, if any, this early start actually has on student success, as there are several other factors in the proposal.

Nonetheless, we will keep a close eye on these districts’ test scores and see if in fact their claim brings with it any academic merit. We have long stated that additional time on task can be achieved without putting the Labor Day school start in peril.

It’s a disappointing day for the industry. We’ll push hard at Day at the Capitol on March 18 to reinforce the importance of Labor Day school and do our best to prevent the repeal movement to gain more momentum.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

Hospitality Minnesota Testifies on Labor Day School

Posted in Campground Issues, General Advocacy, Lodging Issues, Resort Issues, State Laws, Tourism Issues by hospitalityminnesota on March 4, 2010

I testified yesterday morning before the Senate Education Committee regarding a proposed change in statute that would prevent Flexible Learning Year proposals, other than year-round, from starting before Labor Day.

The bill is Senate File 2785 sponsored by Senator Tom Saxhaug (DFL-Grand Rapids): Flexible learning year education programs pre-Labor Day start date prohibition.

At issue is a group of 25 school districts in the Southwestern part of the state that have proposed a collaborative effort regarding school schedules, sharing of resources and addressing community needs. As part of their proposal, these districts are seeking to start school before Labor Day. They have made a request to Commissioner of Education Alice Seagren for such an exemption to state law under the Flexible Learning Year (FLY) statute.

The discussion was energetic, and while we were there to talk about this bill only, conversation quickly moved to the entire debate over the Labor Day school start. Ed Becker from In We Go Resort in Nevis also testified, and did a marvelous job. Ed is a school board member and brought both perspectives to the committee.

With some confusion surrounding the current Flexible Learning Year statute, and a desire to get more answers, the committee laid the bill on the table for future consideration.

Meanwhile, Senator David Hann (R-Eden Prairie) is expected to introduce Senate File 2956, which outright repeals the Post Labor Day School law. We will continue to keep you updated via this blog and government affairs alerts to membership.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota