Dear neighbors,
One of the reasons that Minnesota voters sent DFL majorities to the State House and State Senate was because they were tired of kicking the can down the road when it came to the budget. They elected lawmakers to make the tough, difficult decisions that will put our state back on a sound financial footing.
The budget that Governor Dayton unveiled this week does just that. It is a brave, forward-looking plan that gets our state moving in the right direction and alleviates the burden on the back of our struggling middle class.
Gov. Dayton addressed the skyrocketing property tax rates that Republicans forced on local governments. Thanks in large part to the elimination of the Market Value Homestead Tax Credit and the massive cuts in Local Government Aid and County Program Aid, over the past 10 years property taxes across the state have skyrocketed by 86%. Duluth residents were hit by 13.5% increase in their property taxes in the last two years. Businesses had a 10.2% bump in theirs.
The governor’s budget cuts property taxes by $1.4 billion over the next two years. Combined with new investments in Local Government Aid and County Program Aid, these measures would greatly reduce the property tax burden on middle class families.
The budget recognizes that the key to a vibrant economy is a well-educated workforce. It calls for a major investment in early education scholarships and provides access to All-Day Kindergarten for 85% of our kindergartners. It increases school funding by $118 million – or $52 for every student in the state.
Understanding the plight of those in are currently in higher ed or who will soon be seeking a college degree, Gov. Dayton would invest an additional $80 million in the Minnesota State Grant Program – the largest funding increase in direct student aid in more than 25 years. This will help an additional 5,000 Minnesotans achieve the dream of a college education. And the University of Minnesota system, including the University of Minnesota-Duluth, will gain an additional $80 million in funding.
How does the governor pay for it? Well, first off, he has a plan in place, unlike previous budgets submitted by other governors. And he doesn’t want the middle class to foot the bill. The last Tax Incidence Study by the Minnesota Department of Revenue found that middle-income families paid about 12.3% of their incomes in all state and local taxes, while the wealthiest 2% paid 9.7%. He will ask that 2% to pay their fair share in taxes. He will create a fourth tax bracket of 9.85%. Of the state’s 2,439,867 taxpayers, only 41,612 would be affected. The budget also closes corporate tax loopholes and lowers the state sales tax rate 20% – the largest sales tax rate cut in state history.
While the overall sales tax will be cut to 5.5%, it would be expanded to include purchases of some goods and services that are now exempt. However, food, prescription drugs and clothing items costing less than $100 would continue to be exempt. And businesses would have to pay taxes on services they purchase, such as legal and accounting services.
The unveiling of the budget is just the first step in a long journey. Many of these proposals will be changed as lawmakers get a chance to study all the details. And there is an economic forecast in late February that we will need to take into consideration. Along the way, I promise to listen to all of your concerns.
DFL lawmakers know what we have to do. And I am willing to listen of all suggestions. Good ideas have no party affiliation; they are neither DFL nor Republican. I’m ready to get to work.
Please feel free to contact me with your questions, suggestions and concerns. My office is room 429 in the State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, Minnesota 55155. I can be reached by phone at 651-296-4246 and by email at rep.erik.simonson@house.mn. You can also monitor activities at the House, track bills, watch live video and sign up for my email update list by going to http://www.house.mn.
Erik Simonson