Now that we’re well into summer, I want to give an update on some new laws that took effect recently.
On July 1, Minnesota’s income tax rate became the second highest in the nation for comparative income. In addition, our state now has the fourth highest income tax percentage in the country. While some will argue the new taxes will only affect the wealthy, the experts at the Minnesota Department of Revenue released a study indicating that every Minnesotan of every income bracket will be paying more.
While also imposing higher income taxes, Democrats passed a $1.60 tax increase per-pack on cigarettes. With nearby North Dakota taxing cigarettes at 44 cents per-pack, Minnesota is putting local convenience stores at a competitive disadvantage with this tax. Taxing smokers is a regressive form of taxation and can be an unstable form of revenue collection.
A tax was also imposed on repairs of commercial and industrial equipment. A 6.875% state sales tax will now include farm machinery, construction machinery, mining machinery, industrial equipment used in restaurants, and capital equipment used for manufacturing, mining, and fabricating.
I’m especially concerned about the warehousing tax that was part of the Democrats’ tax bill. While this particular tax doesn’t go into effect until April 2014, several small business owners around the state have indicated they are considering moving their facilities and jobs to other states if the tax isn’t repealed. The 6.875% state sales tax will extend to general warehousing and storage at bulk shipping terminals such as railroads and commercial docks. Because storage companies have small profit margins, the tax imposed on them is likely to be passed on to consumers. If you purchase fuel, groceries, or medical products (just to name a few), you’re likely to be shouldering the burden of the warehousing tax. I’m hoping Governor Dayton will call a special session to address repealing the warehousing tax before these companies and jobs move out of state.
On the last day of session prior to the budget being finalized, House Democrats passed the childcare unionization law with the bare majority of votes needed to prevail. Requiring childcare providers who own their own business to pay union dues will only drive up the cost of childcare for parents. Childcare providers who accept state childcare assistance for low-income families may be forced to either join the union or stop accepting children of low-income families altogether in order to avoid becoming part of the union. We shouldn’t be putting young children, working parents, and childcare providers in such a difficult position.
After the childcare unionization proposal was signed into law by Governor Dayton, two lawsuits were filed in federal court by childcare providers to halt its implementation. In short, the attorney for the childcare providers argued that the laws were unconstitutional because they violated federal labor law and violated their First Amendment rights of freedom of association. The judge later dismissed the lawsuits saying it was simply too early and too speculative to rule on the merits of the case since no union has been formed at this point in the process. I’ll continue to keep you updated as I hear more about how this law is being implemented and the legal process surrounding it.
Beginning on August 1, the State of Minnesota began recognizing the civil marriage of same-sex couples. I opposed redefining marriage during this past legislative session and continue to believe marriage is defined as between one man and one woman.
Although session is over, I can still be reached via email at firstname.lastname@example.org. To contact me by phone, call (651) 296-9918. Mail can be sent to Rep. Steve Green, 231 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, Minnesota 55155.