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Legislative Update from Rep. Peggy Scott (January 25, 2013)

Friday, January 25, 2013

Rep. Scott Reacts to Governor Dayton’s Budget Proposal


Dear neighbor,


This week, Governor Dayton released his budget proposal to the legislature for the 2014-2015 fiscal year. I can tell you already that I have deep concerns about how this budget would grow the size of government, damage our business climate in Minnesota, and hurt middle class Minnesota families.


The governor’s budget proposal calls for $37.9 billion in state spending for the next biennium. For some perspective, the budget for the 2012-2013 fiscal year was $35.2 billion. This is a 7.6% increase in state spending and an 11.9% increase in taxes for the next fiscal year. Governor Dayton actually made history by proposing the biggest tax increase ever put forward by a Minnesota governor - $3.7 billion in tax increases! His plan to make $225 million in cuts while pushing $3.7 billion in new taxes is hardly a “balanced” approach. When every government job is supported by five private sector jobs, our focus must be on growing the private sector, not government. Hard-working Minnesota families cannot afford to pay more to grow the size of government at this unsustainable rate.


I’m also concerned about the effect this budget would have on our business climate in Minnesota. The income tax hike that the governor wants would impose a two percent tax increase on the top two percent of earners. Income tax increases hurts small businesses registered as S-Corps and LLCs that file through their individual tax returns. Ninety-two percent of businesses, job creators in Minnesota, file through individual tax returns. In addition, Governor Dayton is seeking to tax business-to-business transactions such as legal, accounting, and advertising services. While Governor Dayton touted this proposal as a “Budget for a Better Minnesota” this week, I believe a more fitting title would be a “Budget for a Better Wisconsin.”

The middle class will certainly be hit hard by this proposed budget. Governor Dayton wants $2.1 billion of new sales taxes on goods and services. This would include clothing over $100, health club memberships, over-the-counter drugs, haircuts, legal services, accounting services, online purchases, digital downloads, and auto repairs. At a time when we’re experiencing freezing weather in Minnesota, we should not be taxing warm winter coats. With the federal payroll tax going up, Minnesota families are already taking home less money in each paycheck. These kinds of tax increases will drive middle class families from our state. We simply cannot afford them.


It’s still early in the budget process and I’m eager to see how the budget proposal moves through the legislature. I will keep you updated as I learn more about how this budget will affect you and your family.


I am always interested in your feedback. Please feel free to contact me by e-mail at Rep.Peggy.Scott@House.MN or contact my office at 651-296-4231. You can also send me mail to my office address: 201 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.