Dear Neighbor,
As this goes to press, we have two working days left in this year’s legislative session. The final details of legislation that will be passed is being chiseled out in House/Senate conference committees.
There remains significant tension as to how to deal with the approximately $7 billion of excess tax collections. We are still not quite halfway (11 months) into the current fully funded $52 billion-dollar state budget.
I remain convinced that a major portion of the excess tax dollars should be returned to the taxpayers with permanent tax reductions. We must more closely align tax collections with authorized state government spending. We must also maintain a robust reserve account for a rainy day.
It’s clear to me that if the current administration in Washington continues to fail to take action to reduce the extreme cost of energy our economy is headed for a serious recession on the scale, experienced during President Carter’s Administration.
I continue to push to permanently eliminate the state income tax on seniors’ social security pensions and selective reduction of other tax rates. My liberal friends across the aisle in House are not very warm to that idea. Their approach focuses on permanently increasing various tax credits and expanding and creating a host of new entitlements.
That is not permanent tax reduction, rather it simply redistributes tax dollars. New and increased tax credits sound good on the first look. However, that approach establishes a new level of entitlements that must be paid for year after year by other taxpayers.
When times get tough in the next recession, many will be out of work and consumer spending will dramatically fall. That sets the stage for new tax increases to maintain those new entitlements. Over the past 40 years Minnesota has repeatedly fallen into that trap. Minnesota citizens rank among the highest-taxed citizens in the country, alongside the residents of New York and California.
Our citizens are currently struggling with high inflation, extraordinary high gas prices, increased food costs and now even baby formula shortages. We have about a $7 billion budget surplus. I will continue to work on sending a big chunk back to taxpayers and save some for a rainy day. My liberal friends in the House should not be holding that up for billions in new entitlement spending.
Stay tuned, we are in the ninth inning!
Sincerely,
Dale