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Legislative News and Views - Rep. Dale Lueck (R)

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Bills clearing hurdles in House; new state economic forecast received

Friday, February 27, 2015

Dear Neighbor,

This week two bills I have authored cleared that very important first committee hearing milestone. That is a major step in the legislative process. Bills introduced in the House must be acted upon by the relevant committees by March 20 and the Senate companion bill must also have cleared the relevant Senate committees no later than March 27.

I am pleased to report that HF 304 which would end Minnesota's practice of taxing Social Security retirement benefits had a favorable hearing in the Committee on Aging and Long-Term Care Policy. It was referred to the Tax Committee. Minnesota is one of only six states to fully tax Social Security retirement benefits. Our state is an outlier in this regard. My bill would phase out that state imposed income tax over a five-year period. This would directly help our senior citizens, as most are on fixed incomes.

We also moved HF 516 forward in the Transportation Committee. This bill captures the general sales tax we already pay when purchasing tires and apply that tax revenue to our roads and bridges. That, along with other similar proposals on auto repair parts sales taxes, are being considered for possible inclusion in the larger transportation funding bill we are working on. I want to be clear, this is not a new tax, it's simply a common-sense approach that would put that existing tax revenue toward the roads and bridges that those auto and truck tires travel on.

Many of you have contacted me expressing concern about the Governor's proposal to add a new sales tax on gasoline. What I am hearing from almost everyone is that a new gas tax simply does not pass the common-sense test. That appears to be especially true considering the state's economic forecast released today.

Based on the positive economic forecast we likely will collect approximately $1.9 billion dollars in surplus tax revenue over the next two years. That is $832 million dollars more than our last full forecast from November, 2014. This recent economic forecast is the last major piece of information we need as we move forward in assembling the next two-year state budget which goes into effect July 1, 2015.

The economic forecast is good news, however, we must be very careful with how we respond. There are many ways to deal with the projected surplus. Some of my colleagues here in St. Paul want to give every surplus penny back, others, including the governor, suggest spending most of it on new programs and also would still add a new gas tax.

I want to hear from you on this matter. Should some of the surplus tax revenue be spent on roads and bridges? Should we give some back to our senior citizens by ending the state income tax on social security retirement benefits? Should we spend some of that surplus on our nursing homes, assisted living facilities, in-home care workers and caring for the disabled? Please let me know your thoughts.

There is a lot to sift through and I welcome your feedback.



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