Friends,
Last week, Governor Tim Walz released his budget proposal for the 2020-2021 biennium on Tuesday, highlighted by more than $3 billion in tax increases over the next two years alone, and $4.7 billion in tax increases for 2022-2023. His proposal would raise Minnesota's gas tax by twenty cents—a massive 70 percent increase—vaulting Minnesota's gas tax to 4th highest in the nation. It also includes increases to tab fees, the motor vehicle sales tax, the Metro Area sales tax, business taxes, and reinstatement of the sick tax, which is set to expire at the end of the year, adding $1 billion to the cost of health care for Minnesotans over the next two years.
At a time when Minnesota has over a billion dollar surplus, we should be looking at ways to enact tax reform not proposing a 70 percent gas tax that will move Minnesota to the 4th highest gas tax rate in the country. We have put forth ideas, including eliminating the tax on social security, to make Minnesota a more attractive state to live, work, and retire in; but this proposal by the governor would have the opposite effect.
In 2020-2021, the Governor's budget raises general fund tax revenue by $1.224 billion. The extension of the sick tax adds an additional $947 million, with transportation-related taxes adding $907 million for a total tax increase of $3.078 billion. In 2022-2023, the tax increases balloon dramatically; the governor increases general fund tax revenue by $1.43 billion, with another $1.52 billion for the sick tax and $1.73 billion in transportation taxes.
Governor Walz's plan also fails to extend reinsurance, which could cause rates to skyrocket once again by 50% or more on the individual market. Instead of extending reinsurance, the governor has proposed a 20% premium subsidy only for those who do not receive federal tax credits under the Affordable Care Act. The cost in calendar year 2020 of the 20% rebate is approximately $106 million, which would only impact about half the market. The 20 percent subsidy is twice as expensive than the state cost in calendar year 2020 of extending reinsurance, which would only cost approximately $54 million. The Governor's proposal would do nothing to prevent rates from skyrocketing, and would very likely mean that the administration is proposing to pay twice as much so Minnesotans can ultimately pay higher premiums on the individual market.
My Bills
- HF 469: This bill is being heard in the Public Safety Committee next week. It is to start the process to set limits for scheduled drugs, which can trigger a DUI charge. Adderall, medical marijuana, and other medications don’t have set limits, and thus even days after taking, if any trace is detected, you can be charged for DUI. We need to use science and medical experts to help determine limits.
- HF 437: Funds a HWY 14 and Co. Rd 104 intersection interchange. This is a very dangerous crossing, with several recent accidents. About 30k people dive in and out of Rochester through it, every weekday.
- HF 740: This bill will also be heard in the Early Childcare Division next week. This modifies the childcare licensing requirements, making the Department of Human Services develop these policies in plain and understandable language.
Contact Me
Please continue to stay in touch to share your thoughts and ideas on issues important to you. You can schedule a time to meet with me in my office anytime by calling (651) 296-9236, or share your thoughts via email by emailing me at rep.duane.quam@house.mn
Have a great weekend,
Duane