Legislative update from Rep. Hertaus

House Democrats have refused to take up bi-partisan Senate action to replenish the state Unemployment Insurance Fund (UI) which was exhausted during the executive actions taken by Governor Walz shutting down businesses and the jobs that they provide during the pandemic.

Employers of all sizes began receiving their invoices for additional UI assessments this week, and in many cases the additional quarterly assessments are double the UI tax due on wages for the same quarter, resulting in thousands of dollars and tens of thousands of dollars of additional charges.

This is unconscionable. Employers had no say in this matter and the resulting layoffs by government orders and mandates had nothing to due with the business’s management. Businesses were promised these mandatory shutdowns would not affect their unemployment experience ratings as calculated by claims against payroll, and now state government is saying, “too bad, you have to pay additional taxes to replenish the fund.”

After the state’s UI fund was exhausted and the shutdowns continued, the state started borrowing funds from the federal government to continue unemployment checks to laid-off workers. The funds borrowed from the federal government were interest free until last September but are now accumulating more that $50,000 of interest per day while Democrats sit on their hands with inaction and refusal to pass legislation to repay this fund.

Unfortunately, promises made are not promises being kept at the state legislature. This will result in businesses paying more than $2.6 billion of additional taxes, which will contribute further to the nearly double-digit rate of spiraling inflation. These added costs of doing business are unnecessary, but ultimately will be passed along to consumers in the form of higher prices. Shrinking buying power, through higher prices resulting from inflation is indirectly a tax on consumers, largely at the hand of big government. Minnesota can do better!

Regards,