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Legislative News and Views - Rep. Eric Lucero (R)

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Legislative update

Friday, March 19, 2021

Dear Neighbor, 

In a recent email, I noted that, unless a bill is enacted, Minnesota will be collecting taxes on forgiven Paycheck Protection Program loans the federal government provided to businesses to help them keep afloat amid COVID-19 setbacks. 

Two weeks later and all we have passed is March 15, the deadline to file business taxes. Failure to act means businesses now will be forced to file extensions, adding to the headaches and taking on additional costs. 

The Senate did its job, approving a bill to eliminate the PPP tax by an overwhelming, bipartisan, veto-proof 55-12 margin. The holdup is in the House, where an effort to bring a PPP bill to the floor on Monday was blocked for no valid reason. Minnesota remains the only state in the Upper Midwest to not correct this problem that impacts more than 102,000 businesses in our state that took out PPP loans and now could be on the hook for significant, unexpected state tax bills. 

It makes no sense to offer emergency funding to businesses, many devastated by the pandemic, only to turn around and tax those relief dollars.

The inaction on this issue actually is reflective of the session as a whole where, through 10 weeks, the House passed just five bills. That was the fewest at that point in a session since at least 1995 — as far back as records are available on the House website. 

It goes without saying most of the top-tier bills in any given session typically come to the floor during late May when the session is nearing its end. But these are different times and several bills warrant prompt action, including legislation to correct tax problems for businesses and workers, provide funding for our law enforcement and help children who need to catch up in school. Efforts by the House minority to address each of these issues on the floor were blocked this week. 

The majority did bring to the floor a bill to address public safety weeks ago, but then voted down its own proposal and we’ve been at a standstill ever since. We need to make sure our law enforcement has the resources needed to respond to emergencies and prevent a repeat of the riots in the Twin Cities last summer. House Republicans have put forward a bill that we believe is a true compromise, so much so that it was endorsed by the Star Tribune editorial board. 

Bills to address each of these time-sensitive issues deserve fast action and should be brought to the floor for approval as soon as possible instead of making people wait by subjecting good legislation to the gamesmanship and uncertainty of late-session negotiations.  

GOV’S BUDGET 

In other news, the governor issued a revised budget proposal on Thursday. It includes $670 million in tax hikes despite a $1.6 billion state surplus, flush reserve accounts and $2.5 billion coming to the state from the recently passed federal relief bill. 

The governor's revised budget fails to fully exempt those forgiven federal PPP loans from state taxes and includes tax hikes on both individual and corporate income taxes. 

It has been a rough year for workers and families in our state. Tax increases are not necessary to balance our state budget and should not be part of the finished product. Let’s give people some breathing room and let them get back on track without the added burden of tax increases. 

The House majority is set to issue its own budget proposal next week. We will see whether it, too, proposes raising taxes at a time the state is flush with cash, or if it will exhibit some restraint and not add to the burdens workers and families already face. I will continue advocating for the latter. 

Sincerely, 

Dean 

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