Dear Neighbor,
We are wrapping up Week 3 of the 2014 legislative session and here is a look at some of the latest developments in St. Paul:
THREE YEARS OF ECONOMIC GROWTH IN MN
Minnesota Management & Budget recently released a new state economic forecast. It shows a $1.2 billion surplus for fiscal year 2014-15 and a $2.6 billion surplus for 2016-17. This continues a trend of positive reports and Minnesota’s economy has not faced a shortfall projection since February of 2011, when we had to erase a $5 billion shortfall. We accomplished that, enacted fiscally responsible improvements and have enjoyed a positive bottom line ever since. The billion-dollar question now is how we respond to this surplus. Republicans believe the budget surplus belongs to Minnesotans – not the government. We announced the “Give it Back” Act, a package of policies aimed at putting those dollars back in the hands of hardworking taxpayers.
THE ‘UNSESSION’ IS UNDERWAY
The 2014 legislative session has been dubbed the “Unsession,” where we eliminate unnecessary and outdated government practices. Bipartisan support exists for eliminating the most damaging taxes passed in 2013 – including those on commercial equipment repairs, warehousing and telecommunications equipment. Many of us also would like to halt unpopular works in progress, including a $90 million Senate office complex and the unionization of private, in-home child care providers.
GOV. ISSUES SUPPLEMENTAL BUDGET
Gov. Mark Dayton has issued a supplemental budget to update his recommendations, reflecting new information provided in our state’s latest economic forecast. It projected a $1.23 billion surplus for the current biennium.
A press release issued by the governor includes $616 million in tax adjustments, $455 million into reserves and an additional $162 million in state spending. When asked on the House floor, the majority leader indicated there is no timeline for when the governor’s budget proposal will be available for full review in bill form.
REPEALING DEMOCRAT TAX INCREASES
The House last week passed legislation that repeals three controversial tax increase laws enacted last year. The package fixed some of the most excessive from last year, especially eliminating three business-to-business sales taxes on warehousing and storage, equipment repair, and telecommunication equipment. The legislation also conforms Minnesota’s tax code to some federal provisions, which will provide hardworking Minnesotans with important financial deductions on their state income taxes. The majority rejected our attempts to include dependent care credits for working moms and dads and undo the penalty for married filers. Unfortunately, the majority also rejected amendments that would have helped Minnesota families by putting an extra $200 in their pockets for groceries, gas or heating bills. The next stop for the plan is the Senate.
MINNESOTA’S PROPERTY TAXES ON THE RISE
In 2013, the majority promised hardworking Minnesotans they were going to lower their property taxes. They concluded the best method to achieve this goal was to send $292 million in new money to local governments claiming this would lower local property taxes. Now, after an analysis by the Minnesota Department of Revenue, Minnesotans have learned they are facing the highest property tax levy in state history as they are set to rise by $125 million statewide.
As always, I welcome your feedback and hope you have a great weekend!
Until next time,
Tara