The Legislature also enacted property tax reform, including property tax class rate compression, increased education funding, and an increase in the education homestead credit. For the 1999-2001 biennium, the increase in education funding will cost $146 million, and the increase in the education homestead credit will cost $271.7 million.

The sales tax rate for sales of new farm machinery and aquaculture production equipment was reduced from 2.5 percent to 2 percent for sales after June 30, 1998, to 1 percent for sales after June 30, 1999, and exempt from the sales tax after June 30, 2000. The cost of this rate reduction and exemption is estimated to be $1.7 million in the 1997-1999 biennium and $15 million in the 1999-2001 biennium.

Budget Reserve

The amount of the budget reserve was increased from $522 million to $622 million. If the Commissioner of Finance forecasts that additional surplus revenues will be available for the biennium, the first $200 million of the additional revenue after the budget reserve increase will be deposited in the tax reform and reduction account.

K-12 Education

The Legislature appropriated approximately $215 million for K-12 education. $70.8 million of this amount is to help districts implement the new state graduation standards through staff development, technology improvements, class size reduction, and programs for gifted and talented students. $90.1 million of the total was used to buy back the remaining 7 percent of the general education levy recognition shift.

Higher Education

The Legislature appropriated $73 million to higher education: $36 million to the University of Minnesota, $36 million to the Minnesota State Colleges and Universities (MnSCU), and $1 million for student financial aid.

Capital Budget

The Legislature adopted a Capital Budget Bill totaling approximately $1 billion, and chose to pay cash for approximately $500 million worth of projects. Among the larger projects were: $87.1 million for the expansion of the Minneapolis Convention Center; $65 million for a loan to the city of St. Paul to demolish the existing RiverCentre Arena, and to design, construct, furnish, and equip a new arena; $206.8 million for the construction and repair of facilities at University of Minnesota campuses and agricultural experiment stations; $143.1 million for the construction and repair of facilities at state universities, community colleges, and technical colleges statewide; $10.8 million for recreation and community center grants statewide; $30 million for flood hazard mitigation grants; $40.4 million for the improvement of parks, trails, and recreation areas statewide; and $40 million for the construction of light rail transit from downtown Minneapolis through the Minneapolis-St. Paul International Airport and ending in southern Hennepin or northern Dakota county.

Human Services

The Legislature reduced General Fund appropriations for the Department of Human Services by almost $321.8 million and reduced health care access fund appropriations by almost $17.6 million. The General Fund reduction was the net result of forecast reductions of almost $374.2 million offset by new spending of over $37.7 million and transfers to the state Temporary Assistance for Needy Families (TANF) reserve account of almost $14.7 million.

Tornado Relief

The Legislature appropriated an additional $27.6 million from the General Fund for tornado relief due to damage from the March 29, 1998, tornadoes.

Feedlots

The 1998 Legislature enacted various provisions relating to feedlots. Included in the enacted provisions were:

(1) An appropriation of $1.2 million to the Office of Strategic and Long-Range Planning to provide funding for the Environmental Quality Board (EQB) to begin preparation of a generic environmental impact statement (GEIS) on feedlots;

(2) Requirements for the Pollution Control Agency (PCA) to issue a federal National Pollutant Discharge Elimination System (NPDES) permit for feedlots over 1,000 animal units; and

(3) An appropriation of $11 million for financial assistance for the upgrade of existing feedlots.

Crisis Agriculture Counties

The Legislature appropriated $8.8 million from the General Fund for reimbursement of 1997 federal crop insurance premiums and administrative fees paid on wheat and barley in crisis counties. The crisis counties are Beltrami, Clay, Clearwater, Kittson, Lake of the Woods, Lincoln, Lyon, Mahnomen, Marshall, Norman, Pennington, Pipestone, Polk, Red Lake, Roseau, and Wilkin.