It has been a busy week in the House as we now have conducted floor debates and votes for numerous omnibus finance bills which, together, will form our state’s next two-year budget.
Before we get into those details, I want to take a moment to acknowledge that earlier this week a verdict was reached in the Derek Chauvin case as he was convicted on three counts. This case has weighed heavily on our state, nation and world. I pray for the Floyd family and their devastating loss. I pray for healing, for unity and for peace. We must continue working to address core issues. We must do better.
As for the House’s finance bills, here is a quick snapshot of what we have seen so far:
The House majority’s transportation package spends over $6.9 billion in FY22/23 which is over a 12% increase in funding over current biennium. It also raises taxes by $1.6 billion over the next four years at a time Minnesota has a surplus of more than $4 billion. These taxes will hit Minnesotans of all income levels at a time when many are still struggling and will make Minnesota a more expensive place to live and drive. We do not need to raise taxes to take care of one of our most basic functions of government.
This bill raises taxes by more than $1 billion for the upcoming biennium when, again, Minnesota has a historic surplus. Its brand-new 5th tier income tax would give Minnesota the 2nd highest income tax rate in the country and directly impact many businesses who have been hit hard during the pandemic. The bill does not fully exempt Paycheck Protection Program loans from the federal government, meaning many businesses would still be taxed on forgiven PPP loans that were used to pay employees and keep their doors open during a difficult year.
State Government Finance
The Omnibus State Government Finance bill represents an increase of $39.5 million over its base funding and $5.5 million over what the governor requested. While many Minnesotans are struggling and making do with less, this bill does not ask our state agencies to tighten their belts. The Veterans Omnibus Bill was folded into this bill.
We need our students back in the classroom full-time so those who suffered learning loss over the last year can start the work of catching up. At a time when a generation of students have been harmed by forced closures, I would prefer an approach which does more to put education dollars in the classroom and provides more local control to help students who lost ground catch up and close the achievement gap. Also, while we should be looking for ways to provide more flexibility for local districts to do what is best for their students, this bill includes 75 mandates which add additional pressure to schools.
While this is a largely noncontroversial bill, it would be good to see more important reforms added to address the rising cost of college. This bill also could do better to fund student mental health resources to the level necessary to address the problem.
Commerce, Climate and Energy
This commerce side of this bill will make health care and energy bills more expensive for Minnesota families by not extending Minnesota’s nation-leading, bipartisan reinsurance program. As for energy, Minnesotans deserve affordable, reliable power achieved by an all-of-the-above approach that once helped our state enjoy some of the nation’s cheapest rates. Policy changes now have made our state’s rates among the country’s most expensive. We need to get back to what was working, and this bill appears to take us even further in the wrong direction by adding more costly mandates and prescriptive bureaucracy while limiting our energy options.
Jobs and Economic Development
We should be helping businesses recover from setbacks they’ve suffered over the last year by providing relief, including eliminating state taxes on federally forgiven Paycheck Protection Program loans. This bill implements burdensome regulations that would make it much more difficult for Minnesota businesses to recover from the COVID-19 pandemic.
Thank you to all of our law enforcement officers for your work to help keep us safe. Your efforts are highly appreciated. That said, this bill is counter to public safety, is hostile to law enforcement and will inhibit the recruitment and retention of peace officers statewide, while letting criminals off with lighter sentences than the court imposed and hiding their records from the public.
We are blessed in Minnesota to have an abundance of natural resources; look no further than our very own area. While this bill does include environmental support, it also provides more power to bureaucrats at the Minnesota Pollution Control Agency and increases regulations that will create uncertainty for job providers and potentially drive businesses out of Minnesota. The bill also increases fees on businesses and recreational activities at a time of massive state budget surplus.
Homeownership is unaffordable for too many families and we should be addressing the shortage of market-rate housing, the high cost of developing housing, and making it easier for Minnesotans to achieve the dream of owning their own home. This bill does not address those issues and instead reduces local control and adds mandates.
On a positive note, the bill provides $30 million in additional funding for the Border-to-Border Broadband Grant Program that helps bring high-speed internet to unserved/underserved areas of our state. There also is controversial policy language in this bill which raises fees on farmers and reduces legislative oversight has compromised the bipartisan tradition of the agriculture omnibus bill.
We are still waiting for a Health and Human Services omnibus bill come to the floor for a vote and we may take a look at that next time. Until then, conference committees are forming to begin work reconciling differences between House and Senate versions of these finance bills. I am optimistic the proposals will come back to the House floor in better shape than they are leaving so that we may provide broad, bipartisan support for the state’s next two-year budget.
Watch for more from the House as we go through the twists and turns of finding an agreeable plan. Until then, please stay in touch.