The Legislature has until May 17 to get a new two-year state budget in place before adjournment. That could be a tall order considering the vast differences between respective omnibus finance bills approved by the House and the Senate over the last couple of weeks.
There are around a dozen different finance packages covering various aspects of the state’s budget. With each body now having approved their full set of budget bills, we are now in the phase where conference committees are meeting in an attempt bridge gaps and find agreement between the House and Senate. In addition, it has become quite clear the governor is going to thrust the executive office into lawmaking negotiations, something the House Speaker acknowledged during a press conference Thursday.
The conference committees’ budget work will take place with the backdrop of a growing state surplus and fully stocked reserves. State revenue has continued to increase since the February forecast projected our state to have $1.6 billion in excess taxpayer revenue. Furthermore, the state is receiving billions of dollars more from the federal government, pushing that surplus figure to more than $4 billion even without taking into account excesses from the last couple of months.
As many people expected, tax increases appear to be the most significant sticking point in reaching an overall budget compromise. The House’s plan includes major tax increases, with separate omnibus bills related to taxes and transportation together adding up to more than $2.5 billion in added taxes and fees. The Senate proposal takes a different approach, one I support, by not placing a heavier tax burden on Minnesotans so workers and families can continue working on regaining their financial footing after an immensely challenging year for many.
Another issue related to taxes – Payment Protection Program loans – also will need to be resolved in order to reach agreement. Minnesota remains the only state in the Upper Midwest that has not acted to lift taxes on PPP loans, which the federal government issued businesses to make payroll and stay afloat. While the House majority proposes setting a cap on this tax relief, I am of the opinion the state should not be looking to profit off the misfortune of struggling businesses. This tax should be altogether eliminated, especially given the state’s historic surplus.
I also am keeping a close eye on an omnibus bill related to agriculture, which passed the House despite lacking the broad, bipartisan support packages on this subject typically receive. Points of contention include a provision in the bill which eliminates the Senate’s confirmation process for the governor’s appointments to the Board of Animal Health. This would eliminate legislative oversight and cede power to the governor. This bill also strips the BAH of its authority to appoint the state veterinarian and provides the governor with that responsibility a move which could politicize the position.
Environmental issues also are a hot topic in the House this year and something to keep an eye on the rest of the session. I do not support the House’s bill, largely because it gives more power to bureaucrats at Minnesota Pollution Control Agency and increases regulations that will create uncertainty for job providers and drive businesses out of Minnesota. It also has $20 million in increases fees on businesses and recreational activities when, again, the state has a massive budget surplus.
Finally, as the House Republican lead on the committee related to energy, I am very interested to see how that omnibus package evolves during negotiations. My main thing is Minnesotans deserve affordable, reliable energy achieved by an all-of-the-above approach that once helped our state enjoy some of the nation’s cheapest energy rates. Radical liberal policies now have made our state’s rates among the country’s most expensive. House Democrat energy proposals go even further in the wrong direction by adding more costly mandates and prescriptive bureaucracy while limiting our energy options.
Stay tuned as things unfold at the Capitol. It is my sincere hope the House’s hyper-partisan provisions will be stripped from budget bills before they come back to the floor for final votes of approval so that we have a bipartisan plan and get the job done on time as Minnesotans expect and deserve.