Dear Neighbor,
We are down to the final few days of the 2019 session and, with no budget agreement in hand, it looks as if the Legislature will be working straight through the weekend, right up to Monday’s midnight adjournment.
Overall spending targets for the next two-year biennium still have not been determined through negotiations. That means conference committees still don’t know how much funding they will receive and, without those totals, they really can’t start to hammer out differences in spending between House and Senate versions of the major finance bills.
Things can happen fast late in the session but, because of large differences in spending and taxes proposed by the House/governor and the Senate, it will be challenging to find that middle ground where both sides can agree.
Because the state will be starting the new biennium with around $1 billion surplus – in addition to nearly $500 million in increased revenue since the last budget forecast – the case for raising taxes is difficult to understand. The two biggest tax hikes in the DFL House proposal are the 20-cents per gallon gas tax increase and the 2-percent provider tax, which is set to expire at the end of June. The gas tax represents a 70-percent increase over the current level and would put Minnesota among the highest in the nation at 48 cents per gallon when fully phased in. The provider, or “sick” tax currently raises more revenue than needed to provide state-sponsored health insurance programs.
In addition to the financial differences between the Senate and the House/governor, there are also policy provisions that are markedly different. They, too, need to be addressed in order to reach a final over all compromise.
Look for more news as things unfold in St. Paul.
Sincerely,
Paul