Dear Neighbor,
Week 2 of the legislative session is coming to a close, highlighted by news that our state’s economy continues to grow and we just experienced the largest surge in a couple of decades.
Minnesota Management & Budget issued our state’s February economic forecast on Wednesday, one of two full state finance reports we receive each year. The current forecast calls for a $329 million revenue surplus for the biennium ending in June of 2019. That total marks a $518 million improvement since the November forecast, the largest three-month rise in 20 years.
Our state has a remarkably low unemployment rate, stocked-up reserve accounts and continues benefiting from the historic tax cuts we passed last year. These positive economic indicators paint a far brighter picture than the doom and gloom some people were portraying as they tried to criticize the tax relief we enacted last year as too large. The results speak for themselves as tax relief at the state and federal levels has left more money in people’s pockets that they, in turn are able to put back into the economy.
One of our biggest challenges this session will be to determine how this revenue surplus – or this over-collection in taxes, if you’d rather call it that – should be handled. Look for those discussions to unfold over the next few months, especially as we work on a bill allowing our state tax provisions to conform with the recent federal overhaul.
Another news item from this week is that House members are authoring a bill designed to bring some accountability to the governor’s administration for the mess that has been created with our state’s new program for vehicle licensing and registration.
With around $100 million in taxpayer money already spent on a broken system, the governor’s office last week requested an immediate $10 million infusion to fund the MNLARS operation. This request comes just after reports emerge suggesting the Dayton administration ignored warning signs and went ahead with the MNLARS launch despite knowing it was likely to encounter serious malfunction.
The bill that is being introduced would allow the governor to use funding currently dedicated to his executive agencies to provide the first $10 million requested by his administration to continue MNLARS operations. It puts responsibility back in the hands of those who created this mess.
We all want MNLARS to work the way it is intended. Taxpayers deserve a system that functions but, sadly, there is no guarantee that spending another $10 million on this project will make a bit of difference. In fact, the MNLARS project ultimately may prove to be beyond state government’s capabilities. If that worst-case scenario proves to be the case, a bill is being drafted to study the feasibility of turning this task over to a commercial vendor that would "develop, deploy, and maintain" a system to replace MNLARS.
Look for more on these issues as things develop. In the meantime, work continues on my largest personal project of the session, which is to assemble a bonding bill to fund projects around the state.
Sincerely,
Dean