By Rep. Jerry Hertaus
Minnesota House District 33A
The 2020 legislative session begins Feb. 11 and I look forward to returning to the Capitol in St. Paul so we can begin addressing the vast array of challenges which await the Legislature’s return.
While both finance and policy issues oftentimes overlap respecting agendas during the biennium, typically every odd-numbered year of a biennium the Legislature’s primary focus is fiscal in nature with priority given to establishing and adopting a budget for the next biennium. This task was completed last year during the 2019 session.
During the even-numbered years, with a budget previously adopted, policy issues and bonding requests tend to be uppermost on legislative agenda. With the latent effects of the Great Recession now behind us and the budget reserve account fully funded at $2.375 billion, the cash account flush with $300 million and, according to last November’s budget forecast projecting a $1.2 billion surplus, the Legislature should be focused upon re-examining taxation policies going forward.
With the economy still growing and expanding, Minnesota is collecting more revenue than is needed to fund government. Possible areas in which tax rates and policies could be re-examined include:
- State conformity with the recent federal tax changes.
- Individual income tax rate reductions.
- Reductions on state taxation of Social Security income on seniors.
- State estate tax exemptions to conform with the federal exclusion.
- Reducing the state general levy (property tax) on cabins and business property.
- Reducing corporate franchise taxes.
- Re-examining annual vehicle license tab fees. According to a recent Center of the American Experiment study, Minnesota has among the highest tab fees, or is the highest, among the 50 states. Coincidentally, there are a couple of messages in my inbox from persons moving to Minnesota who are concerned about this.
The state budget surplus also is enough to lower health care costs by fully repealing last year’s ill-advised extension of a health care tax which effectively raised health care costs for Minnesotans by $900 million.
Closer to home, here in Senate District 33, I will be involved with helping guide a smooth and timely start next year for the Highway 12 safety improvements which have been past funded and also advocating for several bonding requests for local projects here in the district of regional significance to be included in a bonding bill this year.
While the governor has proposed a record-setting $2.5 billion amount for infrastructure spending including both bonding and cash from the general fund, it is not likely that such an amount will eventually be adopted.
The Capital Investment committee was on tour this past summer reviewing proposed projects, and it will be their task to separate the statewide requests giving priority to needs over wants. However, as is always the case, there are projects usually included in a bonding bill that satisfy both. In the end, there is always stiff competition from local community requests to “make the cut” and have their request included in a bonding bill.
On a final note, expect to see proposals develop this session that would bring much-needed reform to the Minnesota Department of Human Services, our state’s largest agency which has been in a state of turmoil in recent months with reports of waste, fraud, abuse and significant staff turmoil including the exodus of leadership. Bills to provide greater accountability, transparency and responsibility for taxpayer dollars at DHS are likely to be up for discussion this session.
As always, please feel free to contact my legislative office regarding any legislative issue of concern by calling (651) 296-9188.
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