Dear Neighbor,
The governor issued an updated budget proposal yesterday and the best I can say about it is at least he moved from completely out of touch to just extremely unreasonable.
The governor’s initial plan called for a $1.7 billion tax increase, which is completely detached from reality. But, in fairness to him, since that time we learned Minnesota has a significant surplus and received confirmation the state is receiving billions more in federal funds. Those are game changers from a budget perspective and he, of course, is provided an opportunity to rethink his plan.
Except for one thing: He must need more time to think because his revised proposal still includes $670 million in tax hikes despite a $1.6 billion state surplus, overflowing reserve accounts and $2.5 billion coming to the state from the recently passed federal relief bill.
It is mind-boggling that our governor wants to raise taxes on hardworking Minnesotans during a pandemic, and at a time the state is flush with cash and is receiving billions more in federal aid. If Democrats in St. Paul can’t agree that tax increases are unnecessary and a bad idea now, will they ever?
People in our state have been through enough challenges during the last year, especially those put out of work by the governor’s very own orders. We need to take the direct opposite approach by actually helping Minnesota workers and families get back on their feet after the setbacks they’ve been dealt. Tax increases only add to their burden.
The governor’s revised budget also fails to fully exempt forgiven federal Paycheck Protection Program loans from state taxes and includes tax hikes on both individual and corporate income taxes.
In other news:
Historically slow session
Through the first 10 weeks of session, the House passed just five bills, the fewest at that point in session since at least 1995 — as far back as records are available on the House website. According to a report from House non-partisan staff, the House also processed just 333 committee reports through 10 weeks, the fewest at that point for an odd-numbered session since 2011.
Meanwhile, the Senate has actually taken action on a number of important bills this session. It has approved bills related to Paycheck Protection Program tax relief, unemployment insurance tax relief, Chapter 179 conformity, supporting law enforcement operations and extending a program that makes health insurance cheaper.
The House has not approved bills related to any of these issues. House Republicans conducted a news conference this week to kick-start bipartisan legislation that has stalled and made efforts to bring bills to the floor this week to address the following issues:
- The SAFE Account — Funding for mutual aid for anticipated law enforcement response for the Chauvin trial and other major public safety events.
- Exempting forgiven Paycheck Protection Program (PPP) loan income for businesses from state income taxes.
- Exempting boosted Unemployment Insurance payments for workers from state income taxes.
- Summer school funding to help students catch up after a year of distance learning.
Unfortunately, the majority blocked each and every attempt and is willing to ignore these time-sensitive issues to the detriment of Minnesotans. Legislation to address each of these subjects is capable of generating broad, bipartisan support, yet the majority won’t even give them a chance.
The Senate approved the PPP bill 55-12 but the House majority just makes excuse after excuse to unnecessarily delay progress. We remain the only state in the Upper Midwest that, as of now, will be skimming state taxes off of forgiven emergency loans the federal government issued businesses.
If the House does not act, local business owners who received loans to stay afloat when the governor ordered them to close will be forced to pay thousands – or tens of thousands – in unexpected tax bills.
It is an injustice to Minnesotans who deserve better from the House on these issues and others.
Sincerely,
Chris