Dear Friends and Neighbors,
On Sunday night, the governor and legislative leaders were able to come to a budget agreement outlining what the state’s budget will look like. However, this proved to be too late in session as the Monday at midnight deadline came and went, ending the 2019 regular legislative session without the passage of a full budget to fund state government for the next two years. Because the finance bills that are necessary to fund the state have yet to be approved by the House and Senate, we will need to return for a special session to avoid a government shutdown come July.
No Gas Tax Increase
Regarding the tentative budget agreement, the good news is that the proposal to raise the gas tax by 20-cents per gallon – a 70% increase – has been eliminated from the plan. As you’ve heard from me throughout session, this gas tax hike is unnecessary and would have made life more expensive for Minnesota families and small businesses. Many of you expressed concerns regarding the harmful impact it would’ve had on your budget, so I’m pleased to report this proposal is off the table.
Under the compromise, proposed fee increases on titles and registrations have also been removed. In addition, a law that devotes sales tax revenue from auto parts will continue to be used to specifically fund transportation infrastructure. This is great news for Minnesota, as we will continue having statutorily dedicated funding to put towards roads, streets, and bridges.
Sick Tax
On the other hand, I am disappointed that in the budget agreement the sick tax – a tax on nearly all healthcare services in Minnesota – will be continued and not phased out. This 2% tax was slated to disappear at the end of this year due to a sunset clause that was previously approved by Governor Dayton and the legislature. Its reinstatement is projected to add around $2 billion to the cost of healthcare for Minnesotans. Unfortunately, this tax makes healthcare more expensive, and it disproportionately hurts the sickest Minnesotans who go to the doctor the most.
Looking Ahead
Legislative leaders have indicated that a special session will likely take place during the next week or two. While a special session is now necessary to fund state government for the next few years, I’m disappointed that we arrived at this point due in large part to Democrats’ unwillingness to back off their demands for $12 billion in tax increases.
Despite the general framework that was agreed upon in the budget deal on Sunday evening, many of the details for funding for each program area (as well as policy provisions) still need to be worked out. Once there is agreement on each finance bill, they will need to be passed by the House and Senate during the special session before going to the governor for his signature. I will follow up with more information once this process takes place.
Please Contact Me
I would like to encourage you to contact me and share any legislative questions or suggestions you may have. I can be best reached by phone at 651-296-5066 or by email at rep.greg.boe@house.mn.
Sincerely,
Greg