Dear Neighbor,
House Democrats have begun bringing their omnibus finance bills to the floor for votes of the full body. There are several of these bills that, together, would set the state’s next two-year budget. Before we get into the details of what we have seen so far, it should be noted this is only the starting point in a long process. The Senate has its own budget bills so whatever passes the House now will remain a work in progress as we look to find agreement with the Senate.
So, while these various finance bills remain works in progress, here is a look at some of what we have heard so far regarding House Democrats proposals:
Housing
Housing Finance and Policy was the first omnibus bill on the floor this week and, by its title, you would think it would help provide affordable housing. Concerningly, this bill includes more costly mandates and does nothing to address rising home costs or to make housing more affordable. Furthermore, this bill removes local control, takes away the autonomy of housing providers to exercise their property rights, and inhibits the ability of communities to build new single-family homes and developments.
We need housing policies that make it easier and more affordable to build new homes in Minnesota. We should be addressing the shortage of market-rate housing, the high cost of developing housing, and making it easier for Minnesotans to achieve the dream of owning their own. This bill does nothing for actually addressing the cost drivers behind the rising cost of homeownership.
Legacy
This bill appropriates revenue raised by a three-eighths of one percent additional sales tax that was passed by Minnesota voters in the 2008 Clean Water, Land and Legacy Amendment to the Minnesota Constitution (“Legacy Amendment”). The additional sales tax revenue is distributed into four funds as follows: 33 percent to the Clean Water Fund; 33 percent to the Outdoor Heritage Fund; 19.75 percent to the Arts and Cultural Heritage Fund; and 14.25 percent to the Parks and Trails Fund. The Legacy Amendment runs through the year 2034.
While many parts of this bill are not overly controversial, it does contain problematic provisions such as the lack of realistic funding for Soil and Water Conservation Districts. Concerns have been voiced with conditions placed upon the SWCD funding (grants awarded based upon karst geography or shallow sand aquifers; grants awarded for sustainable forestry and soil health.)
Also, language relating to “celebrating cultural diversity” seems a bit vague and not entirely fitting with some Legacy funds that pay for things like drinking water supply projects, state trails, or habitat restorations.
State Government Finance/Veterans
The Omnibus State Government Finance bill is on the floor this afternoon. This bill includes $1,004,769,000 in spending, an increase of $39.5 million over base and $5.5 million over what the governor requested. The Veterans Omnibus Bill was folded into this bill.
The main takeaway is that, while Minnesotans are struggling and making do with less, House Democrats continue to grow government and refuse to ask our state agencies to tighten their belts. Instead, they are putting government spending on auto-pilot. This bill shovels money to state bureaucrats and agencies and includes radical partisan election policy without any bipartisan buy-in.
Transportation
The House Democrats’ omnibus transportation bill includes more than $1.5 billion in tax and fee hikes over the next four years. It also is expected to come to the floor later today.
None of the tax/fee proposals in their bill have received committee hearings this year, making their inclusion late in the session even more surprising. Among the notable proposed tax increases, Democrats have brought back their unpopular gas and light rail tax hikes that are most damaging to middle- and lower-income earners. Here is the quick blow-by-blow of transportation tax increases House Democrats are pushing:
- A gas tax increase ($363 million over four years) by linking Minnesota's gas tax to the Highway Construction Cost Index. This would result in an automatic annual inflationary gas tax increase.
- A sales tax increase to fund light rail and other transit ($916 million over four years). Democrats are proposing a half percent increase in the Metro sales tax.
- A Motor Vehicle Sales Tax (MVST) increase ($120 million over four years).
- Registration tax increase ($149 million over four years) through changes to vehicle depreciation schedules.
- Luxury vehicle registration tax increases ($10.7 million over four years).
Overall, these taxes would be yet another setback for Minnesotans of all income levels at a time when many are just trying to get back on their feet after a difficult year the governor made even harder by putting people out of work.
We don’t need to be raising taxes by billions of dollars on Minnesotans, especially at a time the state has a historic surplus.
Watch for more notes on omnibus bills as additional packages come to the floor next week. In the meantime, stay in touch and let me know how I can help.
Sincerely,
Chris