By State Rep. Dean Urdahl
The two topics seemingly on everyone’s mind – the budget and helping Minnesotans get back to work – have dominated the first couple of weeks in the 2010 legislative session.
We unsuccessfully attempted to bring a pro-jobs bill to the House floor on Day 1 of the session. Then Gov. Tim Pawlenty delivered his State of the State address a couple days later, placing a heavy emphasis on creating jobs. This week began with the governor issuing his plans for balancing the budget and then later on Monday we considered the Capital Investment bill on the House floor.
The pro-jobs bill (HF 363) we wanted to bring to the floor would gradually phase out Minnesota’s corporate income tax, attracting new businesses while rewarding existing businesses for staying in Minnesota.
A metro newspaper recently illustrated how our high business income tax is regressive because the tax is passed along to consumers and workers. Pawlenty pointed out during the State of the State our business climate ranks among the nation’s worst (42nd), and our corporate tax rate is third highest in the “developed world.” He issued a six-point plan to make advancements in those areas by promoting entrepreneurship and job growth.
We will work to bring this bill back to the floor later this session; the vote on Day 1 was not against the bill, rather against bringing the bill to the floor before it has gone through the standard legislative channels.
The governor also issued his recommendations for erasing our short-term $1.2 billion shortfall while cutting in half the more than $5.4 billion deficit we face in the upcoming two-year budget cycle. I have not pored over the details, but Pawlenty’s proposal includes no tax increases, no payment shifts, and holds K-12 education and our veterans.
Pawlenty balances the budget by making cuts to health and human services ($347 million), Local Government Aid ($250 million), state agencies ($181 million) and higher education ($47 million). There also is a $387 million cut to extended federal Medicaid match.
Keep in mind these are just the governor’s recommendations and it serves as a starting point for crafting plans. The reality is we face some huge challenges this session, especially as we spare K-12 education and our veterans from cuts. K-12 education consumes approximately 37 percent of our state’s General Fund spending by itself.
We began discussing a $1 billion capital investment borrowing bill on the House floor a couple hours after the governor released his budget proposal. We put the talks on hold so members could attend committee meetings so I will provide an update later.
Dean Urdahl represents District 18B in the Minnesota House of Representatives. The district includes most of Meeker County and a portion of Wright County. This is Urdahl’s fourth term in the Legislature after being elected in 2002, 2004, 2006 and 2008.