With adjournment looming on Monday, we are now in the final few days of the 2021 session. This seems to be the strangest end of a session I can recall during my time in the House, with very little activity taking place despite the fact there still is no agreement on a new state budget.
It is starting to look as though some are resigned to the fact there will be a special session sometime in June to finish the budget. This is largely due to the House majority continuing to push for tax increases at a time the state has more than $4 billion in surplus revenue.
In addition, the majority is now bringing to the floor bills that have no chance of passing into law – such as legalizing recreational marijuana. The House majority passed this bill Thursday evening despite the Senate majority having given every indication it will not act on it.
While the lack of urgency on passing a new state budget is itself a poor reflection of leadership, it may be even more concerning that a lack of timely action on Paycheck Protection Program and Unemployment Insurance tax issues is going to prove costly to struggling businesses and people who have been out of work. The House Tax Committee chair confirmed way back in March that bills to correct these problems would be part of end-of-session negotiations, a risky move that now may backfire to the detriment of Minnesotans.
If the Legislature doesn't act on this soon, hundreds of thousands of families and businesses will be stuck with tax bills through no fault of their own that they never should have had to pay in the first place. Reports show more than 500,000 Minnesota filers would be forced to pay state taxes on boosted federal unemployment benefits without legislative action.
Also, Minnesota businesses continue to wait on the Legislature to eliminate taxes on forgiven PPP loans businesses took out to make payroll during the pandemic. The business tax filing deadline passed on March 15 and Minnesota remains the only state in the upper Midwest set to tax these loans.
While the House has not brought forward a stand-alone bill on PPP/UI relief, the Senate overwhelmingly passed such a bill on a veto-proof 55-12 vote. If given the chance, this bill likely would receive strong support in the House as well. Unfortunately, it continues to be held back by the majority as negotiating leverage when a lack of negotiation is taking place.
The individual tax filing deadline was extended by the federal government to May 17, which also now is near and just happens to coincide with our Legislature’s constitutional date for adjournment.
It will be interesting to see how things play out over the weekend. I usually am optimistic that deadline pressure has a way of spurring action and that something will come together in the end. It feels a bit different this year and now even the governor and House Democrats have openly spoken of a special session starting in mid-June.
On a final note, it was good to see the CDC updated its COVID guidance yesterday by indicating fully vaccinated people no longer need to wear a mask. This ultimately caused the governor to lift the statewide mandate on masks, with communities and businesses still able to require them if they so choose. This is a nice step toward returning to normal and I am glad to see this development.
Until next time, enjoy your weekend and I will be back soon as things unfold at the Capitol.