Tax Day has come and gone, but tax talk will continue at the Capitol. Most of the biggest, most important bills of the session are ready to be presented to the full House, including a $6.4 billion deficit we need to resolve. That’s where the tax talk comes in.
The House majority’s spending plan is $36 billion over the next two-year spending cycle, a 5-percent increase over current spending. The House calls for $4.4 billion in new taxes over the next four years. Details on what taxes would be increased have not been provided by the House majority, but we’re anxiously awaiting that information.
It is possible for Minnesota to live within its means to help us avoid the severe cuts some fear. We just need to set good priorities and take advantage of the many good ideas for doing things better. This is an outstanding opportunity for us to pass legislation that will give us a strong economic future by creating new jobs through enticing businesses to start up and/or expand in Minnesota.
I have had a close-up view of these proceedings as a member of the Higher Education/Workforce Development Committee and I feel our final bill misses the mark in several workforce areas.
First, a provision has been offered that will force businesses to pay a higher premium on unemployment insurance. This is an added cost that businesses cannot afford, especially at a time when they already struggling in today’s economy. This does nothing to stimulate or encourage business growth and, in fact, could very likely have the opposite impact.
The Minnesota Chamber of Commerce has come out against this. Fergus Falls just witnessed the closing of a store that had been open for decades and raising taxes in today’s climate is not going to make things better. It just doesn’t make sense to me.
Another provision would create an 18-member council to study how we can foster a better business climate. The Tax Foundation lists Minnesota among the 10 worst states in terms of its business climate, so there definitely is room for improvement. But do we really need to recreate the wheel when we could easily adopt successful plans neighboring states already have in place?
Rep. Morrie Lanning is quite familiar with this topic since he represents a Minnesota-North Dakota border city: Moorhead. Rep. Lanning can speak at length about advantages businesses can gain west of the Red River, putting his city at a competitive disadvantage.
The good news is it appears as if the bill will be split into two parts, one for higher education and the other workforce development. While I have serious reservations about some workforce development provisions, the higher education legislation is more reasonable and it would be easier to support.
I’ll keep you posted as things unfold.
Until next time,