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Legislative News and Views - Rep. Paul Anderson (R)

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Budget plans under consideration at session’s midway point

Monday, March 25, 2013

 

By Rep. Paul Anderson

 

With the Legislature on its week-long Easter/Passover break, reviewing what’s happened so far and then looking ahead to the final seven weeks of session seems appropriate. The Governor released his revised budget following the February forecast, a report that continued the series of improved outlooks for the state. Following that, both the House and Senate made their spending plans public and, although similar, they differed in their focus and on how to raise the funding needed to carry out their plans.

Governor Dayton dropped his controversial plan to revise the state’s sales tax, but he also gave up his idea of sending rebate checks to all property owners in the state. He is still calling for an increase in Minnesota’s income tax with a new, fourth-tier rate that would increase taxes on couples making over $250,000 and single filers whose incomes are above $150,000.

The plan put forth by the DFL-controlled House goes even further than the Governor in raising the state’s income tax rate. It calls for an additional fifth income tax bracket, giving our state the dubious honor of having the second or third highest tax rate in the nation. Money raised by this tax on those with incomes over $500,000 would be dedicated to repaying the education shift to our schools. The plan calls for the tax to sunset after two years when the shift has been repaid.

I’m not in favor of this plan at all. First, have you ever noticed how “temporary” taxes seem to last longer than first promised. Remember our “temporary sales tax of 4 percent” years ago, and what it’s evolved into today? And second, this plan would raise “new” funding to pay back an old debt to our schools. It most likely wouldn’t result in any new programs, as it would simply allow schools to repay loans they had taken out at extremely low interest rates to maintain their cash flow. We have made good progress in getting the school aid payments back to the traditional 90-10 split. With each of the past several budget forecasts calling for excess funds, the state has automatically re-paid part of the shift. It currently sits close to an 85-15 ratio of funds received in the current year.

The Senate plan also raises income taxes, with one of its top priorities being the lowering of property taxes. One glaring item noticed by many after the release of the Senate plan was a spending cut in the area of Health and Human Services. That raises concern about the future of a plan that I support to increase funding for our nursing homes and the Elderly Waiver Program, both of which are extremely important in rural Minnesota.

It’s been a busy time in St. Paul. Other issues that have received attention and/or hearings include school bullying, gun control, gay marriage, and the unionization of day care providers. The biggest piece of legislation passed so far and signed by Gov. Dayton deals with setting up the Health Insurance Exchange, which will dramatically change the way many Minnesotans purchase their insurance beginning in October.

Another area where major legislation has been introduced is energy. The omnibus bill offered by the chair of the Energy Committee in the House would have a major impact on electric rates paid by all Minnesotans. I’ll discuss that more fully in next week’s column.

May you and your family have a blessed Easter. Don’t suppose many potatoes will get planted by Good Friday this year!

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