Dear Neighbor,
Greetings from St. Paul, where this is not an official budget year but dollars and cents always seem to enter the conversation.
The state's two-year budget was put into place last year, but adjustments are under consideration this year. The governor recently issued his supplemental proposal and the House offered a plan of its own this week.
The bottom line with the House proposal is that it has a neutral as far as new spending. It reprioritizes existing spending to focus on our priorities – much like a family budget – instead of simply increasing spending.
That means the state's $900 million surplus remains in place that can be used for top priorities such as tax relief and a long-term transportation plan. The House passed legislation pertaining to both last year and they remain in conference committees, ready to emerge this session.
The transportation proposal provides $7 billion for roads and bridges over the next 10 years without raising the gas tax. It would allow us to repair or replace more than 15,500 lane miles of road and 330 bridges statewide.
As for the tax-relief bill, proposals we look to revisit include phasing out the state tax on seniors' social security benefits, along with and military pay, tax credits for families saving for college and students paying off their loans, expanded deductions for families with school-aged children, and property tax relief for farmers and small businesses.
It is important to note that even though we have a $900 million surplus, this figure is reduced somewhat from previous projections. Also, state law stipulates that one-third of surplus funds must be placed into state reserve accounts when certain conditions exist and that has reduced the remaining total. Our Rainy Day Fund is now quite healthy after being drained during the recession years.
There is significant competition for those available dollars. It seems like there is never a shortage of ideas for how to spend each of those dollars. The governor's spending proposal is significantly higher than the House's and we can expect the Senate to come in higher as well. My preference is we stick to our priorities and do not spend just for the sake of spending.
Many visitors from our district have met with me at the Capitol recently, including M State President Peggy Kennedy, AFSCME members, corn growers and a local group representing the Minnesota Utility Investors. Thank you to all that have taken the time to talk with me about a wide variety of issues and I look forward to more good discussions as we progress through the session.
Sincerely,
Bud