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Legislative News and Views - Rep. Joe McDonald (R)

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Update from the House

Tuesday, April 14, 2015

Greetings,

Things are picking up in the House as the attention shifts toward getting finance bills to the House floor and approved so we can have a new two-year budget in place before we are scheduled to adjourn May 18.

House Republicans recently had two important unveilings. One brought to the public a 10-year, $7 billion roads-and-bridges plan. The other provided details of a new two-year state budget proposal.

One common thread between these two proposals is that House Republicans are not proposing tax increases like Gov. Mark Dayton is with his versions of these plans. Our philosophy is that we have enough revenue to support our needs as long as we stick to our priorities, reorganizing and finding areas we can bring greater efficiency. The easy thing to do is to say we need more money and turn yet again to the taxpayers, but the more fruitful approach is to dig in and find ways we can do more with the resources hardworking Minnesotans already are providing.

For example, the governor proposes a 6.5-percent tax on gasoline at the wholesale level. That translates to approximately 16 cents per gallon at today's prices. On the other hand, the House proposes placing general sales tax revenue already being paid on auto parts into what would be a new fund called the Transportation Stability Fund. Estimates show this generate approximately $2.5 billion over the next 10 years without raising taxes one penny.

That is a common-sense approach which would pay for an estimated 15,500 lane miles and 330 bridges. These are just some of the results we can gain without resorting to tax increases if we are willing to focus on what is important.

In addition to the dedicated funds provided by the Transportation Stability Fund, the Road and Bridge Act of 2015 uses $1.3 billion in Trunk Highway bonds, $1.2 billion from realigning Minnesota Department of Transportation resources, $1.05 billion in General Obligation bonds, and $228 million in General Funds.

The House majority also put forward its state budget proposal for the next two-year cycle. It would spend $39.9 billion, provide $2 billion in tax relief and place $100 million in reserves. The overall total is less than Gov. Mark Dayton's $43 billion the Senate's $42.7 billion.

The governor has issued a proposal that would borrow $842 billion for projects all around the state and he spoke more about this during his recent State of the State Address. Big bonding bills like that traditionally are reserved for even-numbered years, so the sheer size of that plan from the governor raised some eyebrows. The bottom line is our state is projected to have a $1.9 billion surplus, yet he wants to spend all that and borrow another $842 million. If the projects he proposes are so important, why not use a portion of the surplus to fund them?

The governor says it is a great year to bond because interest rates are low. I've heard that from the governor and from both Republicans and Democrats. I believe we should follow state law and wait for the bonding year. This would allow for the time necessary to study all the requests.

One bill I have been working especially hard to bring through the process would strengthen laws pertaining to sales and usage tax exemptions for cities and non-profit organizations during local celebrations or fundraisers. The gist of my bill is allowing cities and groups to keep more of their money would, in turn, benefit local youth organizations, veterans clubs, etc. A provision also would help fix a glitch that arose in Delano, where the state is trying to claim $30,000 of our local money over a technicality.

I will keep you posted as things develop. As always, input from constituents is welcome on these and other issues.

Regards,

Joe

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