By State Rep. Paul Anderson
Revenues coming into the state continue to exceed projections. Since the last forecast two months ago, an additional $114 million has come into state coffers. Both personal and corporate income tax collections were above forecast for November and December, while sales tax collections were down a bit. Since these figures are always a month behind, the actual December Christmas selling season for sales taxes will be reflected in next month’s figures.
Estimated payments for corporate income taxes in December were at an all-time high. One possible reason for the surge in collections may be that individuals and businesses pre-paid taxes in December in anticipation of higher tax rates in the new year. One tax that has already kicked in is the 2 percent increase in social security withholding. Paychecks dated after the first of the year will be a bit smaller as the individual withholding rate went back up to 6.2 percent.
Congratulations to a Sauk Centre business, Felling Trailers, for being selected by TWIN CITIES BUSINESS MAGAZINE as one of their “Small Business Success Stories—2012.” Located near the junction of Highway 71 and Interstate 94, the company was started by Merle Felling in 1974 and saw increased sales every year until the recent recession. With the downturn in construction in 2009, trailer sales also went down. The number of employees dropped to 88 the following year as the company started building larger trailers and began customizing work as well, to position itself for the recovery. Today, the company has 214 employees and recently opened a new facility in Litchfield. They now have 200,000 square feet of manufacturing space and are looking to hire qualified welders, machinists and other skilled workers.
“Hats-off” to Merle and his wife, Kathy, along with the entire management team and all the employees at Felling Trailers of Sauk Centre!
Action at the state Legislature will pick up this week, following the opening of session last Tuesday. There’s not much action on the House floor until bills work their way through the committee process. We did have our first meeting last Thursday of the Environment, Natural Resources and Ag Finance Committee, which has seen a bit of controversy. A group of mostly rural legislators sent a letter to House leadership, asking that ag finance be taken out of that committee and put back with Agricultural Policy. An amendment to that effect was offered on the floor during the opening session, but it was quickly sent to the Rules Committee for action, which will take place early this week.
Among the first bills introduced last week was legislation that would pay back the entire education payment shift. Certainly, that type of bill makes for great publicity, but in this case, I’m not sure it’s the wisest course of action. The reason being the money re-paid to our schools is not “new” money, it’s simply money the state held back and that the schools most likely had to borrow for in order to meet cash flow needs. There are statutes in place that call for the repayment of those dollars whenever the state has excess funds and the reserve accounts have been replenished. That’s the situation now, and in the last 10 months, the state has re-paid schools about $1.5 billion. And with revenues coming in ahead of forecast, there’s a good chance another payment would go out following the February forecast.
My concern is that if we pass legislation to pay the entire amount back, it would represent “new money” going to pay back the shift, which quite possibly could take away from any actual new funding for our schools. While we all want to see the shift paid back, we need to proceed in the best way possible for our schools.
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Rep. Anderson can be contacted by email at rep.paul.anderson@house.mn or by phone at 651-296-4317. To receive email updates sign-up on his webpage at www.house.mn/12b