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

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Reflecting on 2013 session

Thursday, June 13, 2013

Greetings,

 

It remains an incredible honor and humbling experience to represent the fine people of this area in the Minnesota House of Representatives.

 

That said, it has been nice to return home since the 2013 legislative session ended in late May. It has been good to spend more time talking with district friends and neighbors about the issues. I also have had more time to spend with my family and get caught up at my photography studio, as well as photographing for my clients the rest of the year.

 

I thank my wife and our wonderful children for supporting me along the way. They have a way of putting life into perspective. I thank God and count my blessings each and every day.

 

As for the 2013 session, I want to pass along some highlights of what transpired at the Capitol the last several months. Most notably, a $2.1 billion tax increase and hundreds of millions more in fee increases were enacted in order to increase state spending by around 8 percent.

 

I firmly opposed this approach to budgeting and am concerned it will stall much of the economic gains we have enjoyed since the Republican Legislature and Gov. Mark Dayton compromised on a budget in 2011.

 

Some key developments since then include:

We have generated around $3 billion in more-than-expected revenue since November of 2011. This is in addition to erasing a shortfall of more than $5 billion that year.

The unemployment rate is down from 7.5 percent to 5.3 percent and last year alone 55,000 new jobs were created.

Minnesota was last projected to enjoy an $856 million surplus in 2016-17 – without raising taxes on any Minnesotans.

We have restored our once-depleted reserves and cash-flow account.

We also have fully repaid the K-12 funding shift enacted in 2011 and paid off much of the K-12 debt incurred under the previous Democrat majority and Gov. Tim Pawlenty. Note: Democrats abandoned paying off the remaining balance this year and are relying on future surplus revenue to finish this job.

 

Our focus on eliminating wasteful spending, creating a more efficient government and allowing businesses to grow is continuing to produce positive results. The governor and fellow Democrats who control the Legislature went a different direction this year, with that historic tax increase in order to spend more. They grew government to the tune of some 1,300 full-time, taxpayer-funded jobs.

 

Here are some other issue-specific bullet points:

 

CAPITAL INVESTMENT

House Republicans voted down an excessive $800 million capital investment bonding bill late this session, which was supposed to be a non-bonding year. In the end, we negotiated a more responsible, slimmed-down $177 million version to fund some important projects like much-needed restoration of the state Capitol, flood relief and a veterans home.

 

ENERGY BILL

The energy bill that was passed mandates that most utility companies get a minimum of 1.5 percent of their energy sales from solar generation. This and a host of other additional solar mandates will increase costs to everyone, except for those in the Northeast Iron Range. That area is exempt from the mandates since it would raise rates for industries located there, making them less competitive. I opposed this bill for the same reasons the Iron Range received an exemption.

 

TAX INCREASES

A $2.1 billion tax increase passed the Legislature. I did not support this bill and am concerned it will cause a setback of our economic recovery from the recession. The new increases will make Minnesota the fourth-most taxed state in the country. Included in these new taxes is a business-to-business services tax and:

 

·         Mom & Pop Shop Tax, New 4th tier tax: $1.12 billion by increasing income tax on top bracket by 25 percent, including small businesses. This makes Minnesota’s income tax rate the second-highest in the nation for comparative income.

·         Cigarette Tax: $408 million from increase of $1.60/pack (from $1.23 to $2.83).

·         Sales and Gift Tax: $137 million by expanding sales tax to services like warehousing and storage, IT services and telecommunications and gift tax.

·         Everyone pays more: Groceries like bread, milk, gas, and medical products (due to warehousing tax), electric bills (due to additional mandates on utility companies), health insurance (due to new Insurance Exchange), batteries and paint (due to new disposal/recycling taxes), new drivers’ licenses, vehicle registration, and vehicle title fees, farm equipment repairs (due to new electronic and commercial repair services sales tax), and new Internet purchases (due to sales tax expansion).

 

UNIONIZED DAY CARE & PERSONAL CARE ATTENDANTS

A controversial bill that could lead to unionizing child care providers and personal care attendants passed this year. I sided with the vast majority of citizens – and providers themselves – who opposed this top-down push. It appears unionization would lead to higher costs and fewer choices for parents, while providing no improved quality of care being provided to children. Still, the governor and fellow Democrats led the bill to passage.

 

2ND AMENDMENT RIGHTS

People in our part of the state hold our 2nd Amendment rights in high regard and I am proud we worked together to hold off attempts to enact new gun restrictions. The outpouring of 2nd Amendment supporters at the Capitol was effective in getting Democrat legislators to pull back their excessive proposals.

 

K-12 FUNDING

The Legislature passed a $158 per-pupil increase over the next two years and provided $134 million for expanded optional all-day Kindergarten. My concern with the plan which passed is it includes spending new money on wasteful government bureaucracy.

 

PROPERTY TAXES

Legislation passed this session that is, in theory, designed to provide $400 million in “property tax relief” through various means. It is not a certainty this will become reality, however, because it appears as if decisions made by local governments could have an impact.

 

I appreciate all the input I received throughout the session on these and other issues. Please remain in touch through the summer as we begin preparing for the 2014 session.

 

All my best to you and your families this summer,

Joe

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