Greetings,
The big news from St. Paul this week is state officials issued a new economic forecast for Minnesota Monday, projecting a $17.5 billion surplus for the new biennium.
The bottom-line surplus figure remains in line with the last full forecast, issued in early December. Revenue actually surpassed the previous projection by almost $1.5 billion, but this week’s report factored for inflation for the first time in decades – effectively canceling out the added revenue.
All things being equal, this forecast only serves to highlight the importance of passing meaningful, permanent tax relief this session. That should be our top focus from now until the end of this session, starting with a complete repeal of the state tax on Social Security. In fact, just hours after receiving the updated economic forecast, House Republicans moved to fast-track legislation fully eliminating the state tax on Social Security, but House Democrats voted against that effort. In fairness, several Senate Democrats are also saying they need to make good on promises by repealing the pass social security tax.
It would be a travesty if tax relief Minnesotans need and deserve continue playing second fiddle as the majority continues pushing pet projects almost nobody wants – such as banning gas-powered lawn implements and prohibiting the sale of water in plastic bottles in our state. Aside from immediate tax relief, we also need to make changes to ensure massive over-collections of taxes do not happen again in our state.
On the tax relief side, House and Senate Republicans put forward a “Give It Back” plan this week to provide Minnesotans with relief both immediately and into the future. It provides $13 billion over two years in permanent tax cuts and one-time rebates.
The package features tax relief benefiting Minnesotans both now and in the long-term, such as:
- Lower first and second tier rates
- Full elimination of Social Security tax
- $1,800 tax credit per child
- Property tax relief
- $5 billion in rebates
As we await formal budget proposals from Democrat majorities in the House and Senate, the governor already has made his plan public and it takes a decidedly different approach, increasing our state budget by 26 percent and raising taxes at a time the state has this massive surplus. One of his most egregious, unbelievable and irresponsible proposals would tax motor vehicle license tabs at 160 percent of your car’s value. I don’t care who is proposing this, or what party they belong to, it’s just a bad idea.
Here’s the main question: If we can’t give tax relief to Minnesotans now, with a $17.5 billion surplus, when can we?
I also want to mention this week House and Senate Republicans put forward a “Reading RESET” to address our state’s reading crisis. Half of Minnesota’s students are unable to read proficiently at grade level and, until now, our state had no real science-based reading plan in sight to address this urgent problem.
Reading RESET has three primary components: funding for schools that would like to replace the ineffective literacy materials they are currently using and purchase proven Science of Reading curriculum and instructional materials and books; funding for teacher training and professional development in the Science of Reading, and funding for tutoring to help struggling students who have fallen behind in reading.
Our children deserve to achieve better results in reading. It has become clear during my time in the House that we are not getting acceptable returns on this very important investment we are making in our kids. This is not a partisan issue and I’ve have heard from several of my friends on the other side of the aisle that what we have been doing clearly isn’t working and change has to be made. I hope we can acknowledge it is our responsibility to help get them on track and follow through with action.
Watch for more from the House soon. Have a good weekend and please stay in touch.
Regards,
Joe