Governor Dayton recently announced a special session on September 9th for the legislature to gather in St. Paul and pass emergency storm damage relief for 18 counties hit by storms, high winds and flooding in late June. The federal government has approved funding to Minnesota for this relief but it requires a $4.5 million contribution from the state. I was happy to see both parties work together towards a bipartisan solution to help those hit the hardest by severe weather and hope we can quickly pass a bill to fund the match.
With all 201 lawmakers gathering at the Capitol to pass this legislation, there would have been an opportunity to also pass “fix-it” legislation to repeal several damaging tax increases implemented by the legislature in May. At the end of session, my colleagues in the DFL majority passed numerous “business-to-business” (B2B) taxes that took effect July 1st and threaten Minnesota’s economic future. It turns out these taxes are hitting farmers, small businesses and hardworking families very hard, and many from both parties have called for their repeal.
Governor Dayton and the DFL have ruled out addressing these taxes when we meet in September and say they will put off consideration of repeal until next year or later.
Officials from across party lines have come together to call for the repeal of these damaging taxes. Former DFL Speaker of the House Margaret Anderson Kelliher recently called for the repeal of the new telecommunications equipment tax, one of three “B2B” taxes, because it is estimated this tax will cost our state 3,300 jobs and slow expansion of internet broadband to areas that need it.
Governor Dayton himself told farmers at FarmFest on August 8 he supports repealing part of a different B2B tax - the commercial and industrial equipment repair tax. This tax is especially harming farmers and nearly all businesses with large equipment to repair and maintain. Implement dealers in border communities are losing repair business to neighboring states without the repair tax. Dayton called the taxes (which he signed into law) a “very bad mistake” and offered to repeal them during the special session. I couldn’t agree more, but unfortunately, legislative leaders were unable to agree on terms for repeal of any of the business-to-business taxes that were passed last session.
Special sessions can be costly, with taxpayers footing the bill for legislators and staff to travel to St. Paul and meet. It makes sense to accomplish all of our work in one session rather than leaving “mistakes” and bad tax policy to wait for another day.
I joined others in asking the governor and DFL legislative leaders to undo the tax mistakes of the last session as soon as possible. We advocated for full repeal of the equipment repair tax, telecommunications tax and the warehousing tax but our requests on behalf of Minnesotans were flatly rejected. I am disappointed by the lack of compromise demonstrated in these recent discussions.
The $2.4 billion in new taxes and fee increases passed this year will negatively impact job providers and families in numerous ways. In fact, this budget will be the largest dollar increase in spending over the previous budget in Minnesota’s history. When looking at the “all funds” spending projection recently released by Minnesota Management and Budget, Minnesota will spend over $6 billion more this biennium than we did in the last one, a record increase. Surely we can find ways for government to be more efficient and effective, not dramatically more expensive and a drag on our economic recovery.
Minnesotans come together during times of crisis, and I look forward to passing needed disaster relief when the legislature meets on September 9th. Hopefully the special session will spur productive discussions over the coming months on how we can implement greater efficiency in government programs and fix some of the tax increases put in place last spring. These taxes have already begun restricting investment, slowing job growth and shrinking paychecks for many in our area and around the state. I stand ready to offer solutions and work with my colleagues to craft a better way forward for Minnesota’s economic future.