Dear Neighbor,
The House has wrapped up its regular committee schedule for the session and we will spend more time on the House floor the next month as bills are brought up for votes on final passage before we adjourn in late May.
The conference committee I was named to on a bill providing relief for farmers in the wake of last year’s drought has begun meeting to prepare that package for final passage. The House’s bill includes $5.1 million – and a maximum of $10,000 available to each farmer. The Senate bill includes $7 million with up to $5,000 available per farmer.
Aside from reconciling those top-line numbers, the largest issue to be resolved before an agreement can be reached is the House’s package also provides $13.3 million to the DNR for trees. The, Senate has 0 DNR tree dollars in its version and I agree with that position. That issue can be addressed in other finance packages if necessary and shouldn’t muck up passage of much-needed drought relief.
As mentioned in a column I submitted to area newspapers this week, the current legislative session as this non-budget year is taking on the look of a regular budget session. That's because of the well-publicized state surplus, and various groups wanting a piece of it. A cautionary note has to do with using this one-time money for projects that become locked into the base budget and become annual expenses. The surplus has largely been caused by increased consumer spending resulting in higher sales tax receipts, and higher income tax revenue brought on by increases in wages. The underlying cause of all this spending is the mountain of federal money that came into our state from Washington, some $72 billion, as the result of the programs designed to lessen the effects of the pandemic.
The House and Senate majorities differ sharply on how they propose appropriating the approximately $10 billion surplus. The Senate recently passed the largest tax cut in state history, at more than $8 billion. This accounts for most of the budget surplus and includes eliminating the state’s Social Security income tax and reducing income taxes. The average tax relief per filer would be $759, with a family making $100,000 per year receiving a tax break of $1,066 every year.
House Democrats, meanwhile, propose $21 in new government spending for every $1 in tax cuts. Their plan spends more on programs, with total tax reductions in the House Democrat tax bill amounting to less than $600 million over the next three years to go along with more than $12.2 billion in new government spending. That represents a 14 percent state spending increase.
Concerningly, the House majority’s supplemental budget proposal includes no funding to repay the deficit in Minnesota’s unemployment insurance trust fund to reverse the recent tax hikes that Minnesota employers are suffering. There is broad, bipartisan support for taking care of this issue and the Senate approved legislation to do so more than two months ago. But the House has not followed suit and every day we wait needlessly costs Minnesota taxpayers $50,000 per day in interest.
The state has the funding to resolve this issue and I hope it happens soon.
Until next time, have a good weekend and please stay in touch. I’ll be back soon with more from the House as we look to start voting on the majority’s omnibus finance bills next week. A package related to agriculture should be among the first we take up and I’m sure I’ll have some thoughts to share on that issue.
Sincerely,
Paul