Dear Neighbor,
After working nearly around the clock since Friday, the Legislature is scheduled to adjourn today at midnight. Here is a brief update for you:
HISTORIC TAX INCREASES
One bill the majorities passed late in the session raises our taxes by $2.1 billion. Last fall, Minnesotans were wooed by election rhetoric about “taxing the rich” and making sure those at higher incomes “pay their fair share.” It became apparent that taxing the rich won’t bring in near enough tax revenue to satisfy all the “wants” of the spenders.
As a result, all Minnesotans will be hit with a $2.1 billion solution to a $627 million problem (the projected revenue shortfall for the 2014-2015 budget cycle). The latest budget forecast shows an $856 million surplus even without these tax increases.
This level of new taxes and new spending are the wrong direction for our still-recovering economy and for the future fiscal health of our state. Even the governor admitted the middle class will pay more in a recent press conference.
Minnesota’s business filings are up, with 60,827 new businesses filed in 2012, an 18-percent increase. A new business-to-business sales tax which passed this year will make Minnesota less competitive in the global market. North Dakota already is putting up billboards in our state, encouraging businesses to hop the border to take advantage of a better business climate.
Other new taxes passed this session include:
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$1.12 billion from new 4th tier tax on individuals making $150,000 or more, $250,000 per couple, a 25-percent increase on the top tax bracket.
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$665 million from tobacco tax increase by$1.60/pack (from $.48 to $2.08) NOTE: Neighboring states tax less (IA $1.36,ND $0.44, SD $1.53, WI $2.52)
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$314 million from expanding sales tax on warehousing and storage, IT services and telecommunications
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$119 million just from warehousing (people storing farm equipment, gasoline, etc.)
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A $3 increase in the drivers’ license transaction filing fee, costing the public $5.4 million annually.
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Wheelage tax doubled from $5 to $10 and expanded to non-metro counties.
REMARKABLE TURNAROUND - WITHOUT TAX INCREASES
As this legislative session ends, we see a sharp contrast from the previous Republican-led session devoted to waste elimination, budget trimming and structural reform of government. Without raising taxes, tax receipts have exceeded projections in every one of the past 22 months. If, in the final two months of the 2012-2013 fiscal year, this average is maintained, the combined surpluses will total approximately $3 billion! A remarkable turnaround for the state – again, no new taxes required.
The increases in taxes and expansions of government going into effect are stunning, and I say that after my more than 15 years of service in the Legislature. In this case, the party in power is taking more money, more power and more control of our personal lives away from our citizens. Hardworking taxpayers simply can’t afford what’s happening in St. Paul.
CHILD CARE UNIONS LACK SUPPORT, BILL STILL PASSES HOUSE
One of the most controversial bills to pass this session not directly relating to the budget allows a vote by child care and personal care attendants (PCAs) on unionization. This topic received many hours of debate in both legislative bodies.
Public opinion, along with editorial boards from several major newspapers – including both Minneapolis and St. Paul – oppose the push for unionization. A recent KSTP poll shows 86 percent of licensed day care providers stand against forming a union. I’ve heard from many providers in our district and there’s nearly unanimous opposition to the plan. They run their own businesses and don’t see any benefit in belonging to a union, but the governor and fellow House and Senate Democrats still pushed the bill toward enactment.
Sincerely,
Linda Runbeck