ST. PAUL — House Democrats blocked a last-ditch Republican effort Monday to vote on bipartisan Senate legislation that could have prevented a tax increase from taking place despite a historic state surplus.
State Rep. Chris Swedzinski, R-Ghent, said the issue centers on the state’s unemployment insurance trust fund that was depleted with more people out of work during the pandemic. The federal government provided funding to the state to keep the program afloat and now that debt of more than $1 billion is due.
“House Democrats are raising taxes on Minnesotans at a time the state has a surplus of nearly $10 billion and people already are facing massive price increases,” Swedzinski said. “It is that simple. This is another case of House Democrats putting partisan politics ahead of doing what’s right for Minnesotans.”
Gov. Tim Walz, House Republicans, Senate Republicans, and most Senate Democrats support passing a clean bill to fully replenish the UI funds. The Senate one month ago approved by a veto-proof majority legislation to do so.
But House Democrats continued to withhold that bill through the March 15 deadline. Their own UI bill, which the Minnesota Department of Employment and Economic Development testified would result in six years of tax increases on businesses, has been stagnant since early February.
House Republicans made a move to declare urgency on the matter Monday to take up the Senate bill for a vote but, for the second time in the past week, House Democrats blocked the effort.
Now, a tax increase is set to take place to pay the state’s federal debt despite the fact Minnesota has a surplus of around $10 billion.
Swedzinski said members of the House majority continue to downplay the impacts of their inaction on this issue, while real-life reports indicate the tax increases could be significant. One recent article quotes Greater Minnesota employers saying they face tax increases in the tens of thousands of dollars next year. In one reported case, a 130% increase translates to a $21,000 spike.
“The majority is trying to play this off like it’s no big deal, which is completely out of touch with reality,” Swedzinski said. “Minnesotans – all Minnesotans – are going to end up suffering because of the House Democrats’ failure on this issue. But the people understand what’s happening here and that House Democrats bear sole responsibility for causing a completely unnecessary tax increase.”
The Minnesota Department of Employment and Economic Development also has raised significant concerns about the consequences of not enacting UI legislation by March 15. DEED Commissioner Steve Grove recently told members of the House workforce committee Monday that time is critical. “As of (Tuesday) this gets a lot harder to unwind, and time is of the essence on this piece,” Grove said.
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