Dear Neighbor,
House Democrats have begun bringing their omnibus finance bills to the floor for votes of the full body. Votes on these bills are the first real steps toward the all-important negotiation process in setting the state’s next two-year state budget.
Bills related to housing, the Legacy Amendment, state government finance and transportation are among the first packages making their way to the floor. While there are major sticking points with each of the House majority’s bills, significant changes are likely to occur before they come back to the floor for final passage because common ground will need to be found with Senate proposals.
Pretty much everything in these bills is subject to negotiation. That’s a good thing in cases where the House majority proposes raising taxes by billions of dollars at a time the state has a historic surplus. It’s not such a good thing in other areas, such as with the need to eliminate state taxes on forgiven Paycheck Protection Program loans businesses received from the federal government to keep people on the payroll and stay afloat amid the pandemic.
Minnesota remains the only state in the Upper Midwest that has yet to address this issue. Widespread support has been expressed for eliminating the PPP tax, yet legislation to do so has been slow to go this session and now this provision could be held up as a bargaining chip in final negotiations.
We do not need to subject PPP tax relief to end-of-session negotiations. Most of us agree the state should not be making a profit off the misfortune of businesses, so let’s get this done. Find another bargaining chip if you’d like.
House Republicans have moved numerous times on the floor to pass PPP relief as a stand-alone bill. The majority has blocked each attempt, doing a disservice to businesses who need timely help and ultimately jeopardizing its passage. It will be a huge disappointment if this legislation doesn’t get done this session, or if the finished product falls short. They’re flirting with disaster and causing unnecessary headaches by waiting.
The aforementioned transportation bill is expected to come to the floor later today. As noted in my last email, the House majority proposes $1.5 billion in tax/fee increases over four years, including a gas tax increase ($363 million) by linking Minnesota’s gas tax to the Highway Construction Cost Index.
I continue opposing raising the gas tax for numerous reasons and want to see us get back to other, more reasonable solutions. For instance, in 2017, we directed existing sales tax collected on the purchases of auto parts, car rentals, etc., toward roads and bridges. This is the kind of approach we should be taking in the name of stability; especially as more and more electric vehicles make their way on the roads and gas-powered vehicles getting better mileage.
Watch for more from the Capitol soon as we make our way into the final month of the session. A lot of twists and turns could lie ahead because, as they say, the situation is fluid.
Matt