The CMBA is involved with monitoring state and local legislative, governmental and regulatory activities, which impact the housing/construction industry, and coordinating CMBA's actions and responses. Government Affairs represents our members before local, state, and national government officials, the business community and the public. In addition, this department monitors local legislation, attends public hearings and keeps membership informed of relevant local issues.
CMBA Government Affairs Update
Russian invasion of Ukraine could push-up key costs. It is growing increasingly likely Russia will do something with the 100,000 troops they have massed on the Ukranian border. If they invade, it could cause already high oil prices to soar further by limiting the supply coming out of Russia, the world’s third largest oil producer. It could also roil natural gas and aluminum markets. Russia is a key supplier of both. (The Kiplinger Letter, 1-21-22)
U.S. Supreme Court strikes-down OSHA Large Employer Vaccination/Testing Mandate.
Although it does not impact many CMBA members, we are understandably pleased the SCOTUS ruled earlier this month striking-down the Biden Administration’s mandate that employers with 100+ employees would have to have their workers vaccinated against COVID-19, or engage in weekly COVID testing and mask wearing. The mandate was set to be enforced beginning this month, but was ruled unconstitutional. The federal vaccination mandate for health care workers was upheld. (CMBA reporting)
Housing construction remains strong as we start 2022. Single-family home starts dipped a little in December due to ongoing supply-side challenges, but still managed to post double-digit gains for all of 2021. According to a report from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau, overall housing starts increased 1.4% in December to a seasonally adjusted annual rate of 1.7 million units (the number of units builders would begin if development kept this pace for the next 12 months). Among the total number of new housing starts, single-family home starts decreased 2.3% while the multifamily sector (which includes apartment buildings and condos) increased 10.6%. (U.S. HUD and Census Bureau)
The commercial office market is rebounding nationally. 2022 will be a better year for the beleaguered office market, after two years that saw millions of workers telecommute, and forced many businesses to reassess their office needs. Now, the market is showing signs of strengthening. Vacancy rates will remain high as developers deliver more new office space. The national vacancy rate reached 15% in December and will stay near there for now, before easing during the second half. Expect the vacancy rate to hit 13% by year-end. Improving demand will lead to a slight rise in rent prices, up about 0.5% at the national level on average. (The Kiplinger Letter, 1-21-22)
CMBA and Chamber host Holiday Social with U.S. Congressman Tom Emmer. CMBA joined with the St. Cloud Area Chamber of Commerce December 29th to host a Holiday Social with 6th District Congressman and NRCC Chairman, Representative Tom Emmer. Several CMBA Government Affairs Committee members participated in the event and had the unique opportunity to visit with Congressman Emmer about building-related concerns, including supply chain issues, COVID mandates, taxes and over-regulation. Congressman Emmer expressed optimism for positive change in the upcoming mid-term elections. (CMBA reporting)
CMBA Government Affairs Committee joins Chamber for 2022 Legislative Session Preview. CMBA again partnered with the St. Cloud Area Chamber January 19th for the 2022 Session Preview with area legislators. The panel forum and meet-and-greet gave CMBA members a unique opportunity to connect with area legislators prior to the 2022 State Legislative Session which begins January 31st. Legislators included State Representatives Tama Theis, Tim O’Driscoll, Lisa Demuth and Dan Wolgamott, and State Senator Jeff Howe. They answered several business-related questions, including extensive comments about building-related legislation like reforms to the state’s Contractor Recovery Fund, a move to standardize permit fees across the state, continuing efforts to allow 16-17 year olds on job sites, and defeating efforts to impose new street impact fees. Legislators also discussed the need to cut taxes in the face of Minnesota’s historic projected state budget surplus of $7.7 billion. (CMBA reporting)
Minnesota legislative leaders announce committee deadlines for 2022 State Legislative Session.
- First committee deadline: March 25 (bill must have been heard in committee in originating body)
- Second committee deadline: April 1 (bill must have been heard in committee in both bodies)
- Third committee deadline: April 8 (bill must have been heard and passed in finance committees)
- Easter/Passover break: April 9-18 (Legislature does not meet)
- Session ends: This year, the Legislature must adjourn no later than May 16th.
Elkins/Draheim Housing Bill expected to carry a large raft of housing and development reforms. CMBA and others are at the table, working with chief authors Rep. Steve Elkins (D) and Sen. Rich Draheim (R) and other industry advocates as this large bill comes forward. CMBA is reviewing the bill, and so far finds it a set of positive changes with one galring exception: New development impact fees called-for by the League of Minnesota Cities. CMBA has consistently opposed new impact fees that dramatically drive-up the cost of housing. CMBA is developing a letter to submit to the authors.
Minnesota redistricting will be decided by legislature, courts by February 15. Every ten years, based on the new U.S. Census results, state officials re-draw legislative and congressional district boundaries. It is expected state legislators will disagree about the new boundaries, leaving it up to the courts to decide. The courts have already been working on the maps and are ready to act quickly because this is an election year and the parties and candidates need certainty about the boundaries. In Central Minnesota, the boundaries between Congressional District 7 and Congressional District 6 are expected to shift and might cause some of our communities to end-up in a different district. Boundaries will also shift for our state legislative boundaries. CMBA will keep a close eye on these shifts and keep our members in close touch with your area legislators and candidates. (CMBA reporting)
Minnesota’s historic budget surplus expected to grow in January. Minnesota lawmakers will start the 2022 Session with a $7.75 billion projected budget surplus – the largest in state history – and it is expected to grow! The Minnesota Department of Management and Budget (MMB) just released a quarterly review and economic update showing state tax collections are $362 million more than was projected just two months ago. (CMBA reporting)
Minnesota’s budget surplus triggers cancellation of June accelerated sales tax shift for the 2022-2023 biennium. This is good news for Minnesota businesses that sometimes had to borrow money to cover the additional sales tax. In years with a budget shortfall, the June accelerated sales tax is a revenue shift that grabs money from tax collections that would normally be paid in July, using them in June. This budget gimmick helps balance the current fiscal year budget by borrowing from the next year. The huge state surplus allows Minnesota to remove the shift for the 2022-2023 biennium at the price of $359 million. (CMBA reporting)
Governor Walz releases proposal to spend Minnesota’s budget surplus. Highlights include:
- “Walz Checks” — Tax rebates of $175 to single filers making less than $164,400/yr., and $350 to married joint filers making up to $273,470/yr.
- $2.73 billion to cover the pandemic-induced deficit in the state’s Unemployment Insurance (UI) trust fund, and eliminate the need for a 14% increase in UI premiums for businesses.
- $1,500 payments to “front-line workers.” Governor Walz’s definition of “front-line” includes much more than only health care workers, and incorporates an estimated 667,000 workers in child care, schools, food service, retail sectors and others
- Money for enhanced dependent care and K-12 education credits
- Several smaller ($10 - $30 million) initiatives focusing on workforce development, up-skilling and continuing education
Republican leaders support giving most of the surplus back in the form of tax cuts instead of more and new state spending.
Governor Walz and legislators ready to pay-off Unemployment Insurance (UI) deficit. Walz and legislators have signaled agreement to use some of the state’s projected record budget surplus to pay-off the $1.1 billion UI fund deficit, caused by extraordinarily high claims stemming from the COVID-19 pandemic. Without the pay-off, employers in Minnesota would face a 14% increase in UI insurance premiums. (CMBA reporting)
Minnesota Board of Water and Soil Resources (BWSR) taking comments on proposed streamlining of Wetland Conservation Act (WCA). BWSR has called for comments by March on a proposal for Minnesota to takeover administration of Sections 404 of the federal WCA from the Army Corps of Engineers. Although Minnesota will need to cover the added administrative costs, the end result is expected to be good for CMBA members because this would streamline WCA permitting and regulation. CMBA will provide input and keep members informed of developments on the proposal.
Minnesota Department of Health (MDH) releases new draft of proposed Lead Paint rules. MDH has released another new draft of proposed Renovation Repair and Painting (RRP) Lead Paint rules, impacting work on homes built before 1978. CMBA has provided direct input and advocacy with MDH to help block onerous measures for remodelers, including testing and extensive documentation, portable showering, plastic enclosures and water spraying requirements. CMBA prefers Minnesota follow the federal Environmental Protection Agency (EPA) rules instead of adding their own rules and regulations. (CMBA reporting)
CMBA hosts focus group for Sauk Rapids Comprehensive Plan Update. CMBA organized a focus group January 26th for member developers and builders to give planners a better sense of what is needed in the City of Sauk Rapids’ Comprehensive Plan Update. Sauk Rapids has retained Lance Bernard with HKGi who spent more than an hour with CMBA members. Sauk Rapids is looking for ways to increase new single family home building.
CMBA coordinating meeting to resolve St. Cloud online building permit issues. CMBA members have expressed concerns about long delays in issuance of building permits, and complications with the city’s online permitting systems. CMBA is scheduling an opportunity for members to meet directly with St. Cloud staff about needed improvements and streamlining of permitting. If you or any members of your team have concerns to share or want to participate, please contact Steve Gottwalt, email@example.com.