Dear Lakeville Neighbors,
Hello, warmer weather has arrived and things are heating up in St. Paul.
Last week, Minnesota Management and Budget (MMB) released the final updated budget forecast. State economists reported that Minnesota now has a $1.6 billion projected budget surplus for the upcoming 2022-23 budget cycle. In November, these same economists were projecting a nearly $1.3 billion deficit.
According to MMB, the nearly $3 billion turnaround is due in part to fiscal actions taken by the federal government that were not taken into account during the November forecast and better than expected revenue collections.
Despite this positive news on the budget front, thousands of Minnesotans and businesses are still struggling to cope with the one-size-fits-all shutdowns and its impact on their personal budgets.
One thing should be clear, with a $1.6 billion surplus, any talk of tax increases from Governor Walz should stop. With the economy hanging on, burdensome taxes on businesses would only serve to slow a recovery and continue to harm our neighbors and families that are employed by main street businesses.
Minnesotans have sacrificed a great deal over the last year, it is time for government to share in that sacrifice. The State is flush with reserves from you and expecting more federal funds.
One thing I’ve been working on this session is pushing for quick action to pass a bill exempting forgiven Paycheck Protection Program (PPP) loan income from state taxes and conforming to the federal tax treatment. This is even more important and financially feasible considering the state's projected $1.6 billion surplus.
PPP loans were lifelines for thousands of businesses to help keep staff employed as they were severely damaged due to forced closures. These forgivable loans are not taxed at the federal level or by any of the other states in the upper Midwest—except for Minnesota.
A surprise tax penalty puts our local job creators at a competitive disadvantage and will significantly harm small owners that employ our neighbors and families. We cannot delay and let this important fix get caught up in end-of-session political games. It is time to take action, now.
Last week, Governor Walz signaled support for exempting forgiven PPP loans, saying "it's not intended to punish those very businesses it helped," and replying "yeah, we need to find a solution" when asked directly if he supported exempting PPP loans.
I am hopeful that we will be able to work together to get this done. Our small businesses are counting on us to do the right thing. I also want to thank so many of you who contacted me about this tax penalty and urging tax conformity.
Recently, House Democrats scheduled a floor vote on legislation that would create a $35 million State Aid for Emergencies (SAFE) Account to fund mutual aide for law enforcement reimbursement in anticipation of the upcoming Derek Chauvin trial in Minneapolis, and other events across the state. This bill is not a bail out of Minneapolis, but funding for law enforcement that is needed in other cities. Local property taxes in Lakeville or elsewhere, should not pay for regional or state needs.
Instead of simply providing the funding, Democrats amended the legislation from its original form, in a way that caused law enforcement groups to withdraw their support for the bill. Because House Democrats could not find enough support within their own caucus to pass it, the SAFE Account bill was tabled, and we adjourned without a final vote.
Later that week, Democrats picked the SAFE bill back up for a vote. Our Republican Public Safety Committee lead offered an amendment that would have brought the bill back in line with what law enforcement groups have supported, but unfortunately the amendment was voted down by Democrats.
After a long debate and multiple amendments, the bill was voted down on a bipartisan vote of 71 against to 63 for passage.
It is extremely disappointing that Democrats played political games with this bill. Moving forward, I’m hopeful they will work with Republicans and law enforcement on this legislation, rather than pushing another bill forward that members of their own caucus refuse to support.
In the State Government and Election committee, we recently heard House File 9. This is a bill that Democrats are pushing that would make significant changes to Minnesota’s election systems, laws, and procedures.
Here are a few top line items from the bill:
The bill is also extremely expensive, due in large part to the creation of a new “Democracy Dollars” or increased Welfare for Politician campaign program. This program would send nearly $16 million in 2022 and $19 million in 2023 to politicians and political parties. The program would increase in cost in subsequent years up to $30,784,000 in 2030. The nine-year cost of the program would be $216,028,000.
This legislation is essentially a liberal wish list of election rigging. It provides zero new initiatives to secure our elections.
Free and fair elections are the bedrock of our Republic. Now more than ever, we need to instill trust and faith in our voting systems. I oppose this bill as it would do the opposite.
Thankfully, I do not anticipate it becoming law thanks to the GOP Senate Majority. Here is a clip of my comments when the bill was presented: https://youtu.be/FsbbIUiNGpg
Finally, I had a bill heard in the Environment Committee that would appropriate part of the funding for federally required improvements at the hydroelectric generating facility at Byllesby Dam.
This is a commonsense bill that will double the amount of hydroelectric output at the Lake Byllesby dam and I am proud to be carrying this legislation.
Presenting the Lake Byllesby Bill in Committee
Feel free to forward this Koznick Connection to neighbors or friends that would be interested in keeping up with legislative business. We will try to keep you connected on what’s happening here every few weeks or as important news develops.
Hope to see you out enjoying the spring weather this weekend or the soccer fields soon.
State Representative, Lakeville, 58A