Budget Update and Town Hall Reminder

Hello from St. Paul-

Capitol Visitors

I met with many individuals and groups at the Capitol this week, including:

• Farm Bureau - Lac qui Parle, Lyon County and Yellow Medicine
• Cooperative Network
• Education MN
• Loren Hacker, Superintendent of Canby School District
• Jon Radermacher, City Manager, City of Madison

Budget Update

The budget process at the Capitol is beginning to heat up. With a revised budget plan from the Governor now available, the House DFL leadership announced their intentions for spending in the next two year cycle. While the House plan approves of Dayton’s idea for higher income taxes on a “fourth tier” bracket, DFL’ers doubled down and added plans for a “fifth tier” historic tax increase on the highest income earners to pay off the school shift. This highest tier could be taxed over 12% on their income, which includes many small businesses and farmers, and would make Minnesota one of the top two highest taxed states in America. All together, this group of individuals would now pay over 50% of their income in federal and state taxes.

At some point, Minnesotans need to have a conversation about how far government should go to penalize one class of citizens for the benefit of another. With the Obama budget deal struck in Washington on January 1, all Americans (and especially the wealthy) got a substantial tax hike.

Details and highlights of the DFL plan are listed here:

Proposed House DFL Budget FY14-15

• The budget proposes general fund spending of $39.3 billion for the next two years, which is a $4.1 billion increase in spending over the current two year cycle that ends on June 30, 2013. The $39.3 billion number does not include any of the proposed fees, surcharges or fund transfers that may be a part of any individual fiscal bill. For reference, Minnesota spent around $18.6 billion in the 1996-1997 biennium but our population was not drastically lower.
• The budget plan calls for the addition of a fourth tier tax rate on individual taxpayers making more than $150,000 or married couples making more than $250,000. This new tax rate would be 9.85%.
• A fifth tier tax rate is also being proposed to pay off the final payments of the multi-year school funding shift. The remaining balance on the school shift is $800 million, down from $2.7 billion two years ago. As you may recall, current state law requires payment of the school shift to be done with the surplus receipts that the state has been experiencing. The surplus money received this year through the 2011 GOP budget has allowed the state to pay back schools nearly $2 billion in shifted money.
• The budget will dedicate an additional $700 million in K-12 and Higher Education spending and fully-funds all-day Kindergarten for public schools in Minnesota.
• Although not general fund spending, the budget plan calls for $800 million in bonding money to fund various state and local infrastructure projects. Repayment of principal and interest on such bonds is, however, a general fund expense.

As you know, I have concerns when government grows at the pace my DFL colleagues have proposed. We will be examining the details of this budget beginning April 2 when we return from the Easter/Passover break.

Reminder - Town Hall Meetings Next Tuesday

Senator Dahms and I will be co-hosting several upcoming Town Hall Meetings around our district on Tuesday, March 26. Here is some more information:

• Granite Falls ~ 9:45 – 10:45 a.m. in the Law Enforcement Center Conference Room, 415 – 9^th Ave
• Dawson ~ 11:30 a.m. – 12:30 p.m. at the Community Center, 675 Chestnut Street
• Madison ~ 2:00 – 3:00 p.m. at the City Hall Auditorium, 404 – 6^th Ave
• Canby ~ 4:00 – 5:00 p.m. at the Community Center, 110 Oscar Ave North
• Marshall ~ 7:00 – 8:00 p.m. at the YMCA, 200 South A Street

For more information, please contact Senator Dahms' Assistant, Wendy Haavisto, at 651.296.8138.

Sincerely,

Rep. Chris Swedzinski