Here is a round-up of the latest legislative news as we now make our way into the second month of the 2021 session:
Gov. Tim Walz recently put forth his proposed budget for the state’s next two-year cycle. It raises state spending by 9.5 percent, raises taxes by $1.7 billion and includes almost no cost-saving measures to help the state share the taxpayers’ burden.
In other words, the governor’s budget plan is pretty much the complete opposite of what Minnesotans need. He wants to take more money from many of the same people he has prevented from working in recent months. To make matters worse, the governor again offers nothing to help the state share in this burden by finding ways the state can save on spending.
He proposes raising Minnesota’s business (corporate) tax rate by 15% to become the nation’s second highest. He also wants a 10% increase to the top income-tax bracket, creating a fifth tier and giving Minnesota the third-highest income tax rate in the nation.
It is disingenuous for the governor to insinuate the middle- and lower-income earners will not be impacted by his tax increases. This simply is not the case and, one way or another, we’ll all feel it.
In fact, the Minnesota Department of Revenue’s own numbers confirm that corporate taxes result in increased taxes on low- and middle-income families, with 43% falling on Minnesota consumers through higher prices, 43% on other state consumers/employees, and 5% on employees (layoffs, wage reductions, reduction of hours, etc). Simply: corporate tax increases fall only 9% on the company (owners/shareholders) and 91% on consumers and employees.
In addition, the governor’s plan also raises regressive taxes (including on cigarettes and vaping products), impacting lower earners the most. Overall, $941 million in the governor’s $1.7 billion tax increase are regressive taxes that will impact Minnesotans of every income level.
Overall, the governor’s proposal will only further divide Minnesotans and should be a non-starter in the Legislature. Instead of taking more from struggling, over-taxed families and businesses, we should be looking at ways we can balance the budget and set a new two-year plan without raising taxes.
The good news is the governor’s proposal is just the first step in a long budget process. The House and Senate each will come out with their own plans after an updated economic forecast is provided in about one month and even the governor himself will produce a revised proposal. Watch for more as this subject unfolds between now and late May when the Legislature is scheduled to adjourn.
Calif. Cars Comments
There seems to be a major lack of public awareness regarding the governor bypassing the Legislature and using the administrative rulemaking process to put decisions on our state’s auto emissions in the hands of California.
And many people who are aware of this issue and want to weigh in are at a loss for how to do so because the governor is making his move without subjecting his proposal to the complete set of legislative hearings it warrants.
At least there are a couple of public information sessions scheduled for later this month and a window to provide public comments lasts until March 15. The Minnesota Pollution Control Agency has scheduled public information sessions at 3 p.m. Feb. 22-23. Click here for more regarding those sessions. Also, prior to adopting the new rules, there is a public comment period running through March 15. People can learn more or submit their comments here.
I really hope people take advantage of these opportunities because this is a significant issue. If it goes through, the governor’s proposal would increase vehicle costs, limit choices to vehicles such as trucks and SUVs and also strain our local auto dealers.
House Energy and Climate Committee recently held a hearing for the Democrats’ 100% Renewable Energy 2040 mandate. The bill (HF 278) increases the existing renewable energy mandate to 55 percent by the year 2035 and bill creates a new 100% “carbon-free” electricity mandate to take effect in 2040. This bill is not something I support because it would raise energy rates on Minnesota families, reduce the reliability of our power grid, and continues to exclude key technologies like hydro and nuclear. Our focus should be to deliver reliable, affordable energy to Minnesotans through an all-of-the-above approach and this proposal goes backward in each regard so I cannot support it.
There was good news regarding the Line 3 pipeline replacement project that is underway across northern Minnesota. A Minnesota Appeals Court on Tuesday denied a request for a stay of construction for the project. A disruption to construction would have been a major setback and the court’s decision to allow it to proceed further supports the due diligence that was conducted in the project’s environmental review.
The existing pipeline is more than 50 years old, and the Obama administration ordered it to be replaced. The new, state-of-the-art model will be safer, and its construction is providing an influx of thousands of jobs and millions of dollars in private investment to our state.
I’m glad to see justice prevailed in the courts because this pipeline underwent an intense environmental review process and cleared each hurdle before construction began. That said, you can bet extreme activists will continue employing various methods of trying to stall this project, so we’ll have to keep an eye on this.
Mask mandate bill
I’ve been receiving a lot of comments from people asking about (HF 604), a House Democrat bill requiring facemasks be worn in numerous public settings. This mask mandate would last until the CDC issues guidance that does not include a recommendation that facemasks be worn to prevent COVID-19 transmission. I disagree with the approach bill takes, and it is unlikely to end up on the governor’s desk.