We remain at work on a final agreement for a new two-year state budget as we approach Monday's deadline for adjournment. We will work through the weekend to get a budget plan in place.
We have made progress in some areas, including higher education and courts/public safety funding. However, the big-ticket budget items such as K-12 education and health and human services funding remain unresolved. We have put forward a modest increase in education funding that does not mandate all 4-year-olds begin attending public school and have provided increased funding for our elder and disabled care system.
The governor and senior Senate leadership continue to support an increase in the gas tax as a condition for a transportation funding plan. In response to an overwhelming demand by the citizens of Minnesota, the House passed legislation that provides substantial long-term funding for roads and bridges but does not include raising the gas tax. We permanently direct the general sales tax we already pay on tires and other auto and truck parts to transportation. We understand that adding a new gas tax hurts lower- and middle-income earners.
The Senate and House conference committee on taxes have already discussed phasing out the state income tax on social security retirement benefits, but the governor and the Senate leadership still remain unwilling to move in that direction.
With a $2 billion projected surplus we passed common-sense tax reform legislation like eliminating the state income tax on seniors' Social Security retirement benefits. It makes no sense for the Senate leadership and the governor to continue demanding that seniors pay state income tax on their hard-earned Social Security retirement benefits at a time when the state is collecting millions of dollars of excess tax revenue every month.
We remain committed to reaching agreement. I would expect that we will see movement on these big issues shortly and will provide updates throughout the weekend as they occur, please stay tuned.