Dear Neighbor,
We are at the midpoint of the 2013 legislative session and this week House Democrats issued the outline of the budget they are proposing for the new biennium.
The proposed spending total is at least $39.3 billion. It includes $2.4 billion in new taxes, with a “temporary” income tax added for top earners. This is on top of the income tax hike the governor is seeking and it would give Minnesota one of the nation’s top rates. Gov. Mark Dayton believes this temporary tax proposed by House Democrats goes too far and is piling on. This comes at a time many states are looking to reduce or eliminate income tax and are looking for other more stable sources of revenue.
I continue to believe there is no reason to raise taxes in order to balance our budget. Revenue continues to exceed prior projections and reports now show Minnesota added 14,500 jobs in February, which is near the pre-recessionary peak five years ago. The state’s unemployment rate is down to 5.5 percent. More people working means more revenue, Jobs are the answer to increased revenue not raising taxes.
Our economy continues to improve at a rate of around 3.5 percent, yet the legislative majority is bent on spending money faster than we are receiving it. Their budget total would outpace our revenue growth by more than twice the rate. I am concerned that if we proceed with the proposed tax it may have a negative effect on our growing economy.
The responsible thing to do is to uphold our constitutional obligations – education and transportation – and then prioritize the remaining existing dollars. We need to focus on educating our children and providing a transportation network that can move people to jobs and products to market.
There are also proposed increases on motor vehicle registration tax rate percentage, flat fee and charging a late payment penalty. This penalty would be charged even if it was a deployed soldier or someone that was ill and didn't drive for six months or a year. The $5 wheelage tax currently authorized in the metro area will be authorized to $20 and expanded to the rest of the 87 Counties if approved by the county commissioners. Gas taxes are set to increase by 5 cents in October and another 4.5 cents by 2017. Additional taxes will be collected on car repairs and service. These taxes will impact the middle class and especially those of us that rely on cars and trucks for work.
The chief concern is will these tax increases leave consumers paying more, cost us jobs or make Minnesota less competitive in the global market. The House income tax hike is billed as “temporary,” but we all know “temporary” taxes have a way of becoming permanent. We will hear more as the discussion continues as the Senate Democrats and Gov. Dayton himself are lukewarm to the House Democrats’ proposal.
GUN BACKGROUND CHECK FIGHTCONTINUES
The Minnesota House Public Safety Finance Committee did not take an expected vote on legislation that would have required universal background checks on nearly all gun sales in Minnesota this week because it did not have the votes to pass. There is a proposal that increases penalties on felons, cracks down on straw purchasers, improves the background check system and also improves the reporting of certain mental health disqualifications. The bill also creates a new rights restoration process that is much needed. It appears that this bill has bipartisan support in the House.
As always, I welcome input on these and other legislative issues. The Legislature will be in recess next week as we observe Easter and Passover. This will allow me to spend more time in the district, meeting with local citizens to get their feedback.
Sincerely,
Rep. Jeff Howe