Dear Neighbor,
It’s the home stretch of the 2023 session, with budget bills all having received preliminary approval and conference committees now working to reconcile differences between what the House and Senate propose. Only two full weeks remain to gain final approval on these packages and have a new two-year state budget in place before we are scheduled to adjourn.
The House Democrats’ budget bills combine to increase state spending by 40 percent and increase taxes by $9.5 billion despite a $17.5 billion surplus. That trajectory of spending growth is far steeper than I can support and is higher than most Minnesotans would deem reasonable. Raising state spending by such a significant amount – from the current $52 billion to $72 billion – likely will lead to further consequences for taxpayers down the road.
As the ranking House Republican on capital investment, I continue working with fellow legislators to have a bonding bill in order if/when that issue comes back to the forefront. You may recall the House approved a bonding package in early March and it has remained on the table in the Senate for the last several weeks.
Watch for more as things develop during the final days of this session. For now, here’s more on another subject that’s not directly budget-related:
Costly, expansive details in worker leave bill
House Democrats approved legislation Tuesday which hurt employee wages and damage businesses by establishing a mandatory paid leave program funded by a new tax on employers and workers at a time the state has a $17.5 billion surplus.
State government does not need to mandate new benefits and taxes on every resident and business when that relationship belongs to the employer and employee. The Minnesota Chamber of Commerce reports 80 percent of its members already provide paid family leave, but this bill takes a one-size-fits-all approach. This is not the way to help address those outlier cases and it will cause serious strain on our communities in Greater Minnesota.
The program (H.F. 2) would cost billions of dollars to get up and running and require as many as 400 new full-time government employees to develop and administrate. This applies to virtually every industry in the state – private employers, nonprofits, cities, counties, and school districts – despite objections. It would be funded with a $2.9 billion tax on employers and employees and expands employers’ leave obligations to part-time and temporary employees.
Unlike the Federal Family and Medical Leave Act, which only applies to employers with 50 or more employees, this program would apply to all employers including those with only one employee. Employees can stack leave together, allowing for up to 24 weeks of paid time off per year.
On the other hand, House Republicans have developed a plan which takes a different approach, providing a small-business tax credit to incentivize employers to join the plan. The key difference is the minority’s plan provides paid family and medical leave benefits for employees without mandates and new taxes.
The House Republican proposal provides a small business tax credit to incentivize employers to join the plan. Minnesotans may opt into the program for $5 per week if an employer does not join by using the parameters of the state’s paid leave policy, leveraging the power of the state’s 10s of thousands of employees.
Workers who are pleased with their current employer-provided benefits can keep them without being forced to enter a government program. The House Republican approach is more flexible without the added mandates and tax increases of the House Democrat plan. The House Republican option also is backed by an insurance company, so taxpayers will not be expected to cover the costs of program shortfalls or losses. It was offered as an amendment to the Democrat bill, but House Democrats voted down that offering before approving their own bill, sending it to the Senate for action.
Until next time, your input is welcome on these or other issues.
Sincerely,
Dean