Dear Neighbor,
We recently received some good news that Minnesota Management & Budget announced our state has received $300 million more in revenue than projected in February.
This is on top of the $2.8 billion in surplus already reported during the current budget cycle. This string of positive reports began shortly after Republicans in the House and Senate enacted a budget compromise in 2011.
The improvements we passed in 2011 continue producing results, exceeding previous economic projections time and again. Our more optimistic outlook is the product of crucial decisions we made to eliminate wasteful spending, cut red tape to promote economic freedom and make maximum use of tax money already provided by hardworking Minnesotans.
Democrats, who now control both bodies of the Legislature – and still have the governor’s office – passed a new two-year budget in the final days of the 2013 session. There is strong concern the $2.1 billion tax increase they passed will set back the economic progress our state has been making.
Minnesota's business filings are up, with 60,827 new businesses filed in 2012. 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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Increases sales taxes by $314 million on commercial warehousing and storage, electronic and commercial equipment repair and maintenance, and telecommunications equipment by small and large businesses.
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Increases sales taxes for individuals on all internet purchases, digital download like iTunes and eBooks, and television satellite services. The rate stays the same.
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Increases cigarette/tobacco taxes by $434 million by $1.60/pack. (From $0.48 to $2.08).
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Increases business taxes by a $404 million in FY 2014-15 through the repeal of the Foreign Royalty Deduction, and FOC tax treatment, and more.
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$119 million just from warehousing (people storing farm equipment, gasoline, etc.)
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Drivers license transaction fee increased by $3, costing the public $5.4 million annually.
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Wheelage tax doubled from $5 to $10 and expanded to non-?metro counties.
Minnesota was projected to enjoy another $856 million budget surplus in 2016-17, before these tax increases passed by the legislative majorities. The tax increases are more about funding extra government spending than making up for a shortfall.
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 (PCA) on unionization. This topic received many hours of debate in both legislative bodies. Public opinion, along with editorial boards from several major newspapers stood against the push for unionization. A recent KSTP poll shows 86 percent of licensed day care providers oppose 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 into enactment.
RETURN OF THE PCR
Legislation also passed this session that will reinstate the Minnesota Political Contribution Refund program after being defunded two years ago. It goes into effect July 1 and the terms of the program are the same as in previous years. The amount of the refund is $50 per person per calendar year, or $100 for a married couple filing a joint request form. Click here for more information.
Sincerely,
Tom