LEGISLATIVE UPDATE - June 7, 2013 – Rep. Mary Liz Holberg
Friend and Neighbors-
Legislative Session Wraps Up
The 2013 Legislative Session came to a close on May 20th and many Minnesota families and businesses will be impacted by the policies put in place. New taxes on income, businesses and tobacco will be used to grow the state’s budget to historic levels, adding over one thousand new state employees and increasing bureaucratic overreach into many areas of everyday life. Our families could see negative consequences from the decision to allow a unionization of home childcare workers and our small businesses will undoubtedly see smaller returns when they file their taxes. Health insurance for all Minnesotans will change as a result of the new insurance exchange agency in St. Paul, raising premiums for many and forcing some employers to drop coverage.
Still, this year’s session focused mostly on crafting the budget for the next two years. Planning for the state’s budget starts several years out, and in January, 2011, the outlook for future budgets looked grim. With a $5 billion hole to fill, Republicans took control of the legislature in 2011 facing tough decisions about how to get balance state spending and encourage healthy job growth to climb out of the recession.
We now know that the fiscal policies we put in place in 2011 to put the brakes on government spending increases have worked. We allowed Minnesota’s economy to grow and create jobs.
That $5 billion budget deficit took a dramatic turnaround and grew into a more than $3 billion budget surplus. What was once a 7.5 percent unemployment rate is now 5.3 percent. Just last year, 55,000 new jobs were created and 60,000 Minnesotans took a risk and worked hard to start their own business. And the best news is, Minnesota’s economy continues to improve and revenues continue to come in higher than projected. But, Democrats were elected to control the legislature this year, and new budget philosophy is upon us.
The next budget beginning July 1 will be much different. The state will spend nearly $40 billion, several billion more than we currently take in. The new spending will be supported by higher taxes and fees that could have unintended consequences, such as tobacco product smuggling from our cheaper neighboring states or a “flight” of capital in order to avoid income and business taxes. Supporters claim the higher spending and higher taxes will help avoid shortfalls in the future, but we know this theory doesn’t always hold up, especially if our economy slows down again. Minnesotans deserve a sound budget that prioritizes spending.
Here is some more information on major legislation considered this session:
Everyone Pays More
The 2013 Tax Bill raises $2.1 billion in new taxes starting this summer.
Wasteful Spending
Rather than creating a more effective government by forcing it to live within its means, legislative Democrats focused on wasteful spending this session. By permanently increasing spending over the next two years by $3 billion, hardworking taxpayers will now lose more of their paychecks in order to fund more inefficient government programs.
Please contact me with any questions or concerns you may have. Thank you for the opportunity to serve you in St. Paul.
Sincerely,
Mary Liz Holberg
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Please feel free to contact me with any thoughts or concerns you may have. I can be reached at 651-296-6926 or by e-mail at rep.maryliz.holberg@house.mn