Greetings from the Capitol-
Minimum Wage Increase
House File 92, the bill to increase the state’s minimum wage up to $9.50 over the next two years, passed out of the House today. The Senate version of this bill would move the state’s minimum wage into conformity with the federal rate and would move the rate from $7.25 to $7.75/hr; this appears to have more support because of the impact this could have on businesses. The wage increase in the House bill is very large, and would make Minnesota have the highest in the nation. While the costs of Affordable Care Act (Obamacare) and MNsure (the state health insurance exchange) on our job creators are still unknown, a large wage increase could come at a very bad time, forcing layoffs or price increases that hurt those it intends to help. I expect the bill to come back to the House for final passage with a smaller increase and appreciate the willingness of my Democrat colleagues to help make the bill a little better for Minnesota.
Tax Omnibus Bill
Last week, the Minnesota House passed the controversial Tax Omnibus bill with bipartisan opposition. The bill includes one of the largest tax increases in our state’s history, and will be done through changes in various parts of our state tax code. There will be around $2.6 billion in new taxes collected from Minnesotans over the next two years. Here’s a breakdown of the changes:
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Increases taxes on cigarettes and alcohol ($434 million increase in taxes on cigarettes and $350 million increase in alcohol taxes for beer, wine, distilled spirits, and production of these).
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Eliminates state tax credits for research & development and long-term care insurance.
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Reduces the tax deductibility of charitable giving for Minnesotans on their state tax return.
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Increases income taxes through higher rates on upper brackets and by shifting lower brackets up (forcing some middle income payers to even pay slightly more). Income Tax increases begin to affect single filers at $21,651 and married joint filers at $31,651.
The bill is currently in conference committee, where it will need to be reconciled with the Senate version which includes different income tax increases and a tax on services and products. The final version will come back to the House for final passage soon.
Pensions Bill
The Omnibus Pensions bill passed today contains new changes to how our biggest public employee pensions are contributed to, including the state’s fire, police and teachers pensions, among others. Right now, these pensions are not fully funded and face a shortfall. The legislation would ask employees and employers to both contribute more. We need to take more steps in the coming years to increase the stability of these funds.
Funding for Senior Living and Services
Last week, the House also passed the Health & Human Services Omnibus bill which cuts funding to organizations such as Aging Services of Minnesota. The cuts could jeopardize the work of non-profits in rural Stearns and Benton Counties that care for seniors.
National Guard Leadership Conference
I was honored to be asked to be the keynote speaker at the National Guard Association of Minnesota annual conference last Saturday, where I addressed the top leaders in the Minnesota National Guard and was presented an appreciation award for my commitment to veterans.
Maj. Kip Fondrich presenting the award.
Sincerely,
Tim