Dear Neighbor,
We worked through another taste of winter last week. We also had a minor hiccup with our computer system, which delayed getting this update out until today. On Friday we also began Easter break and will go back to St. Paul on Tuesday April 23.
Both the House and Senate have completed final committee markups of the agency funding bills. There is a wide variance between the House and Senate on both taxes and spending.
The House majority and Gov. Tim Walz’s approach for the next four years includes both massive tax and spending increases totaling about $12 billion over the next four years. The tax hikes include:
- Changes to state tax laws (tax hikes only): $4 billion
- Transportation bill: $3.9 billion in increased gas taxes & license plate fees
- Provider tax: $2.6 billion increase to Minnesotan’s health care costs
- Paid Family leave: $2.1 billion in new costs to employers and employees
Their plan for the next two years (FY2020-21) is to increase state spending overall by about 9%. We will finish the current biennium at $45.5 billion in spending. If the House/governor’s proposal is adopted state spending would jump to $49.5 billion beginning July 1, 2019 and continue to grow at an excessive rate over the next four years.
The Senate approach reflects only modest spending increases all of which are paid for within our current state tax structure. Upon return to St. Paul, each body will pass their respective agency finance bills and because of the major differences they will end up in conference committees to work out the differences.
I favor the Senate’s approach. We currently have a stable economy, unemployment remains low, there has been some increase in wages, now is not the time to implement huge across the board tax increases. Minnesota already ranks in the top 10 of high tax states in almost all tax categories.
Last week we sent the hands-free cell phone bill (H.F. 50) to the governor and he enacted it into law. The bill passed on 107-19 vote in the House and 48-12 in the Senate. The bill allows drivers to use cells phones and other devices as long as they are affixed to the vehicle and are in hands-free mode. The law takes effect Aug. 1, 2019. A strong education push will be made as we near the implementation date so drivers will understand the new rules.
Sincerely,
Dale