By Rep. Bud Nornes
Minnesotans were aware Democrats raised state taxes and fees by around $2.5 billion this year, but it took until July 1 enactment for many to gather just how far the impacts will reach.
The now-majority Democrats said they wanted to “tax the rich” and make top earners pay their “fair share” as they sought office in 2012. Now, less than a year later, Minnesotans are paying more for driver’s licenses, motor vehicle taxes, rental cars, tobacco, income taxes, Internet downloads and repairs on farm equipment. Wheelage taxes can now be raised by county boards and health insurance premiums will increase with the implementation of a new government-run system.
This is not “tax the rich.” In fact, some of these taxes – like raising the price of cigarettes by $1.60 – will hit Minnesota’s lowest earners hardest.
And none of it is necessary.
The Democrats’ $2.5 billion in tax/fee increases far exceeded the $627 million shortfall we faced. We were projected to enjoy an $856 million surplus in 2016-17, before Democrats raised our taxes. We have generated $3 billion in more-than-projected revenue since Republicans and Gov. Dayton erased a $5 billion shortfall and set the budget in 2011.
It was possible to set the new biennial budget without these tax increases if we had just kept spending to within our forecasted growth of around 3 percent. Instead, state spending was increased by nearly three times that level in order to enact a record $38 billion budget.
The excessive tax increases that will pay for that extra state spending already seem to be slowing our economy. I am hearing significant concern from citizens regarding a new warehousing tax that will make Minnesota less competitive in the business world. Companies are now putting on hold plans to expand in our state, or are even considering relocating across our borders.
This warehouse tax also will cost farmers, who face paying more for agriculture inputs that require storage. This is in addition to new taxes on equipment repairs and a new real estate tax that will make it harder to keep a farm in the family.
The good thing is the warehouse tax is not scheduled for implementation until April of 2014 and I am among those who would like to repeal it before then. The 2014 session is not scheduled to start until Feb. 25, however, leaving barely more than a month of session time to take action. The Legislature would be hard-pressed to conduct due process in that amount of time, especially since we would need to account for that lost revenue.
In the meantime, the House minority has asked the governor to call us back to the Capitol for a brief special session to repeal the warehouse tax. It would be easier to find resolution if this were the sole focus in St. Paul and it also would allow farmers and other businesses to start moving forward again.
That is the least we can do after the governor and fellow Democrats in the Legislature expanded their definition of “rich” to include virtually all hardworking Minnesotans and the businesses that operate here.