By Rep. Joe McDonald
We are heading into the final month of the 2022 legislative session and soon negotiations on this year’s biggest bills will take place in earnest.
There are sizable differences between what the two majorities – Senate Republicans and House Democrats – propose on the headline issues. For example, there is a massive gap between approaches taken on how to appropriate the state’s surplus of around $10 billion.
On one hand, House Democrats propose $21 in new government spending for every $1 in tax cuts. They propose spending more on programs, with total tax reductions in the House Democrat tax bill amounting to less than $600 million over the next three years compared to more than $12.2 billion in new government spending. That translates to a 14-percent state spending increase.
Meanwhile, the Senate recently passed the largest tax cut in state history – at more than $8 billion – which accounts for most of the budget surplus. The Senate Republican plan includes eliminating the state’s Social Security income tax and reducing income taxes. The average tax relief per filer would be $759, with a family making $100,000 per year receiving a tax break of $1,066 every year.
I do not support the house majority’s tax increases and instead prefer permanent, meaningful tax relief for overtaxed Minnesotans. I continue hearing from people who are dismayed by increases they are facing on their property taxes, and I support reductions on those as well. The state is fully funded for the biennium and it still has over-collected taxes by around $10 billion. We need to do our best to put those dollars back in the hands of hardworking Minnesotans.
While those issues will play out over the coming weeks, it has been concerning to see a lack of development on a more pressing matter related to an unnecessary tax increase our employers now are suffering because of inaction by House Democrats. With a historic surplus, Minnesota can more than afford to fill its Unemployment Trust Fund to solvency, reverse the tax increases on employers, and stop Minnesota from having to borrow $50,000 a day from the federal government.
It has been two months since the Senate passed a bill to refill the UI trust fund on a bipartisan 55-11 vote. Gov. Walz, House Republicans, Senate Republicans, and Senate Democrats all have expressed support for replenishing the UI trust fund. But it’s been two months since a UI bill has received a House committee hearing and Democrats have blocked efforts to bring the subject to the floor for a vote.
The Democrat House Speaker downplayed the original March 15 deadline prescribed by state officials, insisting that lawmakers had until April 30, when tax bills are due, to take action. But here we are, with that date just around the corner, and Democrats have excluded UI repayment funding from their supplemental budget package for this session. If the trust fund is not repaid, it would result in 10 years of higher taxes on employers.
I look forward to the challenge that lies before us in finding agreement on these issues to help Minnesotans. It also is crucial we take action to improve public safety in our state at a time violent crime has been soaring out of control and I remain hopeful the Legislature will do what’s right by the people.