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Legislative News and Views - Rep. Bud Nornes (R)

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Gov's proposed tax increases unnecessary

Friday, January 25, 2013

To the editor,

Gov. Mark Dayton has issued his budget proposal for the new biennium. It includes the largest tax increase in state history and the impact would be felt by virtually all Minnesotans.

Most of us expected the governor’s proposal to include tax increases, but it is a bit surprising just how far he went by proposing taxes that will impact all economic classes to the tune of $3.7 billion.

The thing is, tax increases are not even necessary to balance our budget because state revenue is rising even without them. A responsible plan to balance the budget simply keeps spending to within the limits of our projected revenue growth. Instead, the governor is proposing a whole new set of taxes to support excessive government spending.

An expansion of sales taxes would cost Minnesotans $2.1 billion. Services like haircuts and oil changes would be taxed. Internet sales would be taxed. So would clothing items of $100 or more. These taxes would hit the middle- and lower-income Minnesotans as hard – or harder – than top earners.

There also would be new business taxes which state officials say would cost our businesses $1.5 billion in 2015 alone. A big chunk of those costs certainly would be passed along to consumers, resulting in higher prices. Dayton’s taxes also could cause companies to reduce staffing or even leave the state altogether.

Our neighboring states already actively recruit Minnesota companies to relocate. Now, Wisconsin’s governor said his state will up the ante on pursuing Minnesota companies if Dayton’s new taxes become law.

Maybe the ultimate insult in Dayton’s budget proposal is a new tax on people who spend winters out of state. It seems our governor is set on taxing everyone one way or another.

Minnesota is recovering from the recession, largely because of improvements the Republican majority made in 2011-12 to slow spending growth and install new government efficiencies. Unemployment is now shrinking and revenue continues to rise. We are on more secure economic footing today than a couple years ago and we cannot afford to risk derailing our progress through burdensome taxes.

One expense I wish our governor would have prioritized is paying off our debt to schools. Unfortunately, his proposal would not make repayment until 2017. That should have been at the top of our list and we should have settled that debt before looking for new ways to spend new tax money.

The governor’s proposal is designed to serve as a map for the Legislature as it drafts bills which form our budget. My mission will remain to be an advocate for responsible spending and taxpayer protection throughout the process. I will keep you posted as things develop.

Sincerely,

Rep. Bud Nornes

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