Dear Neighbor,
Greetings from the House, where we are now nearing the end of Week 2 in the 2022 session. Bills are being introduced left and right and tax relief remains my top issue this year.
Legislation now has been drafted to address my two main priorities – eliminating the state tax on Social Security and protecting businesses from the injustice of paying increased unemployment insurance taxes because more people were out of work during a pandemic (in no small part because the governor forced businesses to close).
The state has a $7.7 billion surplus and Minnesotans deserve meaningful, permanent tax relief. Social security tax relief is at the top of that list. In 2017, House Republicans successfully reduced or eliminated social security taxes for more than 270,000 Minnesota seniors. Now is the time to eliminate state Social Security taxes once and for all. House Republicans have authored bills to get it done and make our state more welcoming to retirees.
As for businesses, an immediate fix is needed to pay off the state’s $1.2 billion Unemployment Insurance Trust Fund debt, restore the fund to solvency and protect employees’ future unemployment benefits. A bill introduced by House Republicans does exactly that, providing $2.73 billion to eliminate the debt and replenish the account.
It was good to see the Minnesota Senate Finance Committee unanimously approved a bipartisan UI repayment bill this week. It seems nearly everyone is in support of fully repaying the UI fund – except for House Democrats. They advanced in committee a proposal on a party-line vote to repay the unemployment insurance trust fund only partially, rather than the full repayment proposed by House and Senate Republicans and even the governor.
We can’t afford to play games with this bill. The state will continue to incur interest and penalties and businesses will be hit with large UI tax increases of 15% or more if we don’t repay our debt to the federal government and restore this account. The Department of Employment and Economic Development itself has confirmed failure to fully repay the trust fund would trigger SIX years of increased tax rates for businesses.
With a $7.7 billion state surplus, there’s no excuse to not pass a bill to fully fund our unemployment system. The surplus is an overcollection of taxes and those dollars should be used to diminish the burden people and businesses in our state face.
Permanent tax relief needs to be our priority. Forget one-time gimmicks to buy off the public or using these surplus dollars to develop new government programs that will cost taxpayers into perpetuity. I’m a hard “no” on those. Permanent tax relief is what we need to put these dollars back in the pockets of taxpayers and not add to government waste.
Have a good weekend and I’ll be back soon with more from the House. As always, let me know how I can help.
Sincerely,
Shane