It was an honor to speak during home school day this week at the Capitol (above) and to meet with Farm Credit folks at my legislative office (below).
Dear Neighbor,
Greetings as we make our way to the end of another week in the 2020 session. Here is some of the latest news:
State economic update
Minnesota Management & Budget has issued an updated state economic forecast and it shows a $1.513 billion surplus for FY 2020-21, up by $180 million over the last full forecast in November.
The state’s budget reserve and cash flow account balances are unchanged. The cash flow account balance is $350 million in each year 2020-23. The budget reserve balance for the 2020-21 biennium is $2.4 billion.
Our state’s economy is in great shape, our reserves are statutorily full, and a significant surplus exists. This means major tax relief should be a slam dunk this session and House Republicans are working on a package to provide it. Stay tuned for more details on what we propose.
Section 179 bill
A bad tax law approved by House Democrats and signed into law by Governor Walz last session is now costing farmers thousands of dollars. Farmers and other business owners who traded equipment are having that trade value counted as income and are being billed by the Department of Revenue.
I have authored a bill (H.F. 3136) as one component to help remedy our state’s failure to fully conform to Section 179 – accelerated depreciation – in the federal tax code. My proposal allows the carryover of unused section 179 expensing and bonus depreciation subtractions. The bill received a committee hearing this week in the House and I look forward to working it through the next steps in the bill process.
Local infrastructure bill
Legislation I authored to help the Lincoln-Pipestone Rural Water System received a good hearing this week in the House. This bill would provide $13 million for the project, which includes acquisition of land, design, construction, furnishing, and equipping new wells, a water softening treatment plant (lime softening plant), and installation of new water distribution pipes. This is the kind of essential infrastructure work that should be the cornerstone of a bonding bill this year.
Addressing K-12 achievement gap
House Republicans conducted a press conference this morning to discuss a variety of bills to help our state close the achievement gap among students. One of the bills highlighted in the press conference was H.F. 3790, a bill I have authored which extends tax credits to individuals and businesses who make donations to fund K-12 scholarships. The expanded scholarship availability derived from this tax credit would assist our goal of closing the achievement gap by providing low-income children with opportunities to explore new educational choices that currently may be unattainable to them.
Replenishing RFA loans
The biggest news from the House this week is we approved $50 million to replenish the depleted Rural Finance Authority loan funding to help farmers. House Republicans proposed bringing urgency to this issue in mid-February – before the RFA funding ran dry – to help farmers as they prepare for the new growing season. House Democrats blocked that effort and caused further uncertainty for farmers until bringing the bill to the floor this week.
RFA partners with agricultural lenders to provide low-cost financing to farmers on terms and conditions not otherwise available from other credit sources. The RFA portion of the loan is carried at a reduced interest rate to improve the cash flow of eligible farmers. RFA offer loans within the beginning farmer loan and seller assisted program, agricultural improvement program, debt restructuring program, and livestock expansion programs.
Let me know if you have any questions on these or any other issues.
Have a good weekend,
Chris