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Legislative News and Views - Rep. Linda Runbeck (R)

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A $3 billion hit to taxpayers on the way?

Friday, April 19, 2013

Dear Neighbor,


The Legislature will be meeting in a rare Saturday session tomorrow from 9AM-3PM (my guesstimate). If you are interested in observing law-making first hand, the State Capitol is open to the public. I'll be in the House chamber for much of the day, so if you do come down, let a page know you're here, and I can show you the process at work.


Emerging this week through omnibus bills is the full scope of the Democrats' spending proposals which increase spending at twice the rate of the state's revenue growth. The entire package includes $2.6 billion in new taxes and $600 million in fees on such consumables as water, drivers licenses and insurance policies. Bottom line: we're headed for a stunning $3 billion coming out of the pockets of the hard-working taxpayers in Minnesota to fund a larger public sector. Here is some of what we have seen so far:



One of the biggest tax bills in Minnesota history passed through committees on party-line votes this week. The $2.6 billion tax increase proposal for the next two years would make Minnesota the state with the third-highest income tax rate in the nation. Think "job losses" in the thousands as this tax bill would take $1 billion directly from the working capital of entrepreneurs, business owners, investors and job creators who are Sub-S corporations.   


Tax experts say that Minnesota is already over-reliant on progressivity in income taxes. This results in a more unstable revenue picture, the kind of roller-coaster scenario we've been experiencing. Yet, the Democrats are making our tax code more unstable and more subject to volatility with an income tax rate of 12.49 on the highest earners (the 4% surcharge is temporary, we are told).


The proposal would also increase the cigarette tax from 48 cents to $2.83 a pack, and force a 103-percent increase in the alcohol tax. All internet purchases would be subject to the sales tax as would sports memorabilia. Also in the bill is a $5 surcharge on all home and auto insurance policies to raise $36 million yearly to help bail-out police and fire pension funds.


Disagreements remain between the House and Senate Democrats on taxes. The House proposes a huge increase on alcohol, but the Senate is not proposing this. On the other hand, the Senate proposes taxes on clothing and services like oil changes. 



How many persons will be re-trained and hired under the programs of the Omnibus Jobs Bill? The bill's author wasn't able to provide this information when I asked this question on the floor of the House. Isn't that number the end goal? The bill spends $436 million in programs like the Jobs Skills Partnership program, the Dislocated Worker Program and the Workforce Development Centers. There is even a new jobs program which appears to duplicate existing programs – the Job-Based Education Apprenticeship Program (JEAP) which focuses on manufacturing skills. This spending bill does a great job in funding more bureaucracy, that's evident. 



On Thursday, the Minnesota House approved an agriculture and environment finance proposal that spends $822 million in order to better protect our land, air, and waterways and promote the ag industry.


Many lawmakers were taken aback by huge fee increases included in this bill. Much of the funding would go toward duplicative, unnecessary programs.


This bill focuses largely on expanding bureaucracy and increasing fees. Hikes in water permit fees ($6.1 million more per year) and lake property fees ($700,000 more per year) are top concerns. There also is a product stewardship program, which would directly increase the price of paint, carpet, and all batteries, products you use in your home.


More wasteful spending:
· $300,000 for pollinator habitat restoration that is visible to the public, along state trails. Earmarks up to $50,000 of that money for pollinator habitat signage and public awareness.
· $50,000 for pollinator habitat education and outreach efforts
· $2,799,000 to the EQB for interagency technical advisory team to address industrial sand standards and criteria
· $5,000 to the MPCA to prepare a report on recommendations for a statewide bottle deposit program
· $300K for restrooms at a public water access on Crane Lake
· $26,000 to publicize critical habitat plates



My prayers go out to people who were affected by this week’s tragedy in Boston. The nationwide outpouring of support has been heartwarming. The amazing display of patriotism Bostonians showed during the Star Spangled Banner prior to Wednesday night’s hockey game between their beloved Bruins and the Buffalo Sabres provided a chilling moment.



Linda Runbeck

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