Dear Neighbor,
Here’s a quick snapshot of the latest news and notes from St. Paul as we bring Week 2 of the 2024 session to a close:
Partial tax-bill fix
The House this week approved a bill to fix errors in the omnibus tax bill Democrats enacted. There is good news and bad news to report. First, the good news: Many Minnesotans likely will see their income-tax returns improve upon enactment of the bill.
Last session, the Democrat-led legislature approved comprehensive taxes legislation that reduced standard income tax deductions, leading to tax increases for roughly 76 percent of Minnesotans. The bill we approved this week correctly inflates the statutory amounts for the standard deduction, additional standard deduction for seniors and blind taxpayers, and standard deduction amounts for dependents.
Without this correction, the Department of Revenue estimates that an additional $352 million in general fund tax revenue would be raised starting in tax year 2024.
Here’s the not-so-good news: It is disappointing the bill did not include agreed-upon language that would provide a technical fix to the Net Operating Loss provision. The effective date simply needs to be corrected and, if it is not fixed, tax year 2023 filers will be liable for additional tax revenue with a general fund revenue gain of an estimated $14.8 million.
This provision reduced the NOL deduction from 80 percent to 70 percent of taxable income for corporations. The legislative intent was to make this provision effective for tax year 2024. However, the 2023 Tax Bill contained an effective date of tax year 2023.
Democrat tax chairs in both the House and the Senate wrote a letter to state officials last June saying said they would pursue legislation at the earliest possible opportunity to correct this problem. Unfortunately, they went back on their word and Minnesotans are on the hook.
In unrelated tax news, some 350,000 Minnesotans are still paying taxes on their Social Security because of a different promise Democrats broke last year.
Local Association of Minnesota Counties visitors
Enjoyed meeting with county commissioners from the District 15A area during an Association of Minnesota Counties day at the Capitol yesterday. Thanks for taking time to visit and provide valuable input.
State economic forecast
Next week we will receive an updated economic forecast, providing a current budget picture for our state after Democrats spent the entire $17.5 billion surplus, raised commissioner salaries, raised $10 billion in new taxes on Minnesotans, and spent $730 million on a new palace for politicians.
The November forecast projected a shortfall in the next biennium – just months after the Democrats spent the historic state surplus and raised state spending by 40 percent. We’ll soon see what the bottom line looks like now, but the need for balance in St. Paul remains because the current one-party rule in Minnesota is irresponsible and unaffordable.
On a side note, the $730 million State Office Building renovation is underway, with the above photo taken from my current legislative office. The view is of an adjacent park which was leveled to literally provide space for excessive government growth. You could say there are now holes in the ground to match the holes in taxpayers’ pockets.
If you think this office space for politicians is a good use of taxpayers’ $730 million, then please send a thank-you card to the governor and other Democrats who leveraged one-party control to pay for this monument to bureaucracy. (The building in the upper-right corner of the photo is the Senate’s new building, which was constructed in the last decade at a fraction of the $730 million cost for the SOB.)
Precinct caucuses next week
This year’s precinct caucuses will take place at 7 p.m. on Tuesday, Feb. 27. These meetings provide Minnesotans with the opportunity to participate in grassroots politics. The more people we have involved in this process, the better and I hope you can attend. The Minnesota Secretary of State website has a statewide Caucus Finder page to help citizens find their meeting locations.
National FFA Week
A tip of the cap goes to our area Future Farmers of America chapters as we make our way through National FFA Week. This is a fantastic organization dedicated to helping our youth develop leadership skills, personal growth, and career success. I look forward to meeting with FFA students when they make their annual visit to the Capitol next week.
Until next time, have a good weekend and please stay in touch. I hope next week we have real developments to share regarding a bipartisan solution on the school resource officers issue that has compromised safety in schools. We also may have some thoughts to pass along regarding a new economic forecast scheduled to be issued for the state next week.
Sincerely,
Chris