Dear Neighbor,
There is no way of sugar-coating this: House Democrats are responsible for a significant tax increase at a time the state has a historic surplus and people already are being crushed by higher prices in the Biden-Walz economy.
House Democrats blocked Republican efforts to vote on bipartisan Senate legislation that could have prevented a tax increase from taking place despite a state surplus of around $10 billion. This tax increase is completely unnecessary, but House Democrats continue playing politics with people’s livelihoods and this squarely is the result of their extreme partisanship.
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.
Workers in our state have been through the wringer the last couple of years and many employers were unable to survive the pandemic, especially with restrictions the governor placed upon them. Those that did stay afloat are working to recoup their losses and now House Democrats are cutting off their recovery at the knees with unnecessary tax increases.
Gov. 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 and 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. House Democrats can spin this a million ways, but they bear sole responsibility for failing on this issue.
Members of the House majority can try to downplay the impacts of their inaction on this issue all they want, but 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.
On a final note, in my last newsletter I mentioned a package of bills House Republicans have assembled to address the spike in violent crime that is taking place in our state. A recent Star Tribune article indicates “Minneapolis has about 544 officers, about 300 fewer than before George Floyd's killing in 2020, according to one recent count.”
The city has until this summer to hire around 200 more and comply with a court order. It is going to be a serious undertaking to bring on that many new officers in such a short amount of time and we will see how this plays out. A short-staffed Minneapolis PD means an increased reliance on support from law enforcement elsewhere in the state if another volatile situation unfolds in that city. That, in turn, could compromise law enforcement elsewhere, which is concerning.
-Steve