Dear Neighbor,
The governor and legislative majority Democrats last week announced they reached agreement on the framework for the state’s next two-year budget, with a $71.9 billion total and a 40-percent increase in state spending.
That set the stage for this to be a big week for omnibus finance bills in the House, where we have been busy working on packages to fund various parts of state government within the parameters set in last week’s agreement.
As the House Republican lead on agriculture, I have significant concerns with that particular bill, starting with an overall lack of funding targeted to this area relative to the overall scope of spending that is proposed. There also are a number of policy provisions that are problematic, including a provision requiring farmers to gain permission from the state for each use of systemic pesticide-treated seed, along with submitting a “verification of need.” Another measure increases the board of animal health from six to 11 members, watering down the position and drawing concerns that our efforts to prevent and contain outbreaks in our animal herds could be compromised.
As for other parts of the state budget, we have learned the House Democrat transportation bill raises taxes and fees by at least $4 billion – $1.71 billion in 2024-25, and by more than $2.2 billion in 2026-27. Here is a sampling of what they propose:
- LICENSE TAB FEE INCREASES Democrats look to raise $861 million ($351 million in 24/25, $510 million in 26/27) in fees on Minnesota drivers who want to renew their license tabs.
- $10 SURCHARGE ON LICENSE TABS Because the proposed license tab fee increase wasn’t quite enough, they are also proposing a $10 surcharge on all renewals. That totals another $88 million ($43 million in 24/25, $45 million in 26/27) leveled on Minnesota’s drivers.
- MOTOR VEHICLE SALES TAX INCREASE Under this provision, the Motor Vehicle Sales Tax (MVST) would increase from 6.5% to 6.875%, costing motorists more than $227 million ($105 million in 24/25, $121 million in 26/27).
- 75-CENT DELIVERY TAX Nearly $721 million ($297 million in 24/25, $424 million in 26/27) is expected to be leveled on residents who shop from home thanks to this tax on goods and prepared food deliveries. Think everything from Amazon packages to the pizza delivery driver.
- ¾-CENT METRO AREA SALES TAX INCREASE FOR TRANSIT Residents in the 7-county Metro Area are estimated to pay more than $2 billion ($917 million in 24/25, $1.165 billion in 26/27) through this ¾ cent sales tax.
Meanwhile, House Republicans have called attention to the lack of funding for nursing homes included in the House majority’s budget proposal, despite the ongoing long-term care crisis. Together with Republican legislators, nursing home providers are calling on the Legislature to take action and ensure our nursing homes have the investments they need to keep caring for our seniors. We made a motion on the floor today to fast-track funding to help our nursing home industry, but the majority blocked that move.
There is a lot of time to make improvements on these finance bills between now and when the Legislature adjourns in late May. Let’s hope more of the state’s $18 billion surplus goes to supporting our core priorities that should not be partisan – including caring for our seniors in nursing homes.
Sincerely,
Paul