Hello from the State Capitol,
Our work in the legislature is continuing to accelerate with only a month left to pass a balanced budget and determine how to pay for it. This week, we’ve passed several omnibus bills that grow government and spend more. We’ve also had a few days to analyze the Tax Omnibus bill of 2013, which the Democrat leadership unveiled on Monday. Here are some more details:
Ag/Environment Bill Bad for Farmers, Business and Communities
On Thursday, the Minnesota House approved a comprehensive agriculture and environment finance proposal that spends $822 million in order to better protect our land, air, and waterways and promote the ag industry. Many lawmakers were taken aback by fee increases included in the bill. Most controversial: increases in water permit fees, lake property, and a “product stewardship” recycling program, which will directly increase the price of paint, carpet, and all batteries that you use for products in your home.
Tax Increase Bill Officially Introduced
While many of you rushed to meet the April 15 IRS tax deadline, Minnesota House Democrats unveiled a $2.6 billion tax increase proposal for the next two years this week. (Minnesota small business owners, the drivers of most new jobs, would be hardest hit through these tax increases.) The House Democrat plan would make Minnesota the state with the second-highest income tax rate. Here’s a breakdown of that tax increase:
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The bill creates a Fourth Tier income tax rate of 8.49% for couples with taxable income greater than $400,000 or individuals above $226,200,
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Imposes a “temporary” 4% income surcharge on incomes greater than $500,000 for two years to pay back money owed to schools. We are told the surcharge will “blink off” after the school shift is paid back, but not all “temporary” taxes have turned out that way in the past. With this surcharge, the top Minnesotans’ state tax rate would hit 12.49% and their overall tax liability will top 50% of their income.
Most states try to lure job providers, but House Democrats are insistent on sending ours away with job-killing tax increases. Under this proposal, every Minnesotan would be forced to pay more for the growth of government and wasteful spending.
When combined with new taxes, the new fees on hardworking taxpayers will raise the total liability to Minnesotans to around $3 billion. You can read about the various fees being introduced at the Capitol that will raise hundreds of millions more from Minnesotans on MPR’s website here.
“Jobs” Bill Moves Forward With Record Spending
The first budget bill was approved in the Minnesota House on Monday, a $436 million proposal that’s designed to promote economic development in Minnesota. While the goal of the bill is to grow jobs, the only ones House Democrats could guarantee were at least six new fulltime government positions. Sadly, the proposal contains at least $8 million in wasteful spending on programs that will not create any jobs and raises new taxes and fees on everyday activities, such as gas station operations, barber shops and plumbing inspections.
Byron Elementary Students Visit the Capitol
Thanks to 6th graders from Byron Elementary for visiting with Sen. Senjem and me at the Capitol on Tuesday.
Looking Ahead
The House will meet this weekend to consider the Legacy Omnibus and State Government Finance/Veterans Affairs Omnibus bills. We’ll also be tackling the very large Health & Human Services and K-12 Education bills next week, along with the Omnibus Tax increase bill.
Have a great weekend.
Sincerely,
Duane Quam