On February 26, state economists revealed our state's latest fiscal numbers. They found Minnesota has a $900 million budget surplus, down from a previous budget projection of $1.2 billion, but a significant budget surplus nonetheless.
So what should be done with your money?
Last session, we approved legislation to fund government at the highest levels of spending in the history of the state. The spending decisions until June 30, 2017 have been made. Government is fully funded.
Our budget reserves are also flush with cash, as we recently added another $600 million to our rainy day fund in November. With roughly $2 billion set aside, our reserves are also at the highest level in state history.
In short, government is fat and sassy in every measure.
One forecast note worth mentioning: our economic experts found that revenue collections were down by $427 million. They noted that wage growth was lower from the November forecast, as was the collection of sales tax receipts, down $311 million from the previous projection.
That means the Legislature should be looking at ways to provide tax relief so they can spend more of their hard-earned money.
Next session, I will be pushing for relief in two areas. The first would address the State General Tax, repealing the first $500,000 of value for every small business in every Minnesota community. In other words, if you're a million dollar company in the suburbs, you're still going to have tax obligations. But if you're a Main Street hardware store owner in Goodhue County and your property is valued at $350,000 – this special tax would disappear, saving you thousands of dollars annually.
I will also advocate for halving school construction property tax liabilities for every farmer in every township in Minnesota. For the average farmer, an approved levy can cost thousands of dollars depending on the number of acres they own, and they currently pay ten times as much as their city cousins do toward school construction, so this is an extremely critical issue in rural Minnesota.
Other tax relief choices were also approved by the Minnesota House. They include income tax cuts for social security and the pensions of veterans. There's also a provision to conform the estate tax with federal estate tax exemption, so families can pass on their farms or their businesses to their children. All are worthy of discussion, in my opinion.
The 2016 session will be about choices. Government is fully funded, yet the appetite is there among our liberal friends to continue its growth. Do you want to continue feeding the stuffed bellies of special interests, or would you prefer that your money stay in your pocket?
For me, the answer is very simple: I want you to keep more of your money, and I will be fighting for tax relief proposals that give you that opportunity.