Dear Neighbor,
The House has continued bringing the majority’s omnibus finance bills to the floor for robust discussions and votes of the body this week. There are around a dozen omnibus bills in all and, while most of them already have received preliminary approval, each is likely to look far different after conference committees take them up to work out differences between House and Senate versions.
For instance, the House majority’s tax bill raises taxes by more than $1 billion for the upcoming biennium at a time the state has a surplus of more than $4 billion. It would create a brand-new 5th tier income tax, giving Minnesota the 2nd highest income tax rate in the country and directly impacting many businesses who have been hit hard during the pandemic.
The House bill also does not fully exempt Paycheck Protection Program loans issued by the federal government to help keep business afloat during the pandemic. Our state is the only one in the Upper Midwest that has yet to act on this.
Minnesota also has failed to conform to federal unemployment insurance language, meaning people who have been out of work are receiving unexpected state tax hits. This, too, needs to be fixed and the House’s omnibus bills do not address the problem.
After the most difficult year for businesses in more than a generation, we need to do more to help employees and employers alike. Job creators have been damaged enough during the pandemic. With billions of state surplus dollars, we do not need to deal another blow to business by creating more state mandates or raising their taxes. Instead, we should be offering support and flexibility in the form of PPP relief and other assistance.
The Senate’s tax bill looks far different from the House’s and I am optimistic the concerning provisions will be stripped before we take this up for final approval.
The House’s omnibus bill on transportation also takes a much different approach from the Senate in that the House proposes raising taxes by $1.6 billion over the next four years, including raising the gas tax. These taxes will hit Minnesotans of all income levels at a time when many are still struggling and will make Minnesota a more expensive place to live and drive.
On a positive transportation note, the House’s K-12 education bill includes funding that would help school districts in more sparsely populated areas of the state mitigate a bussing shortfall. Bemidji, for instance, would receive around $1 million in additional funds to aid their situation.
Overall, the House majority’s K-12 bill does not do enough to address learning loss from the last year of distance models. House minority proposals to put more funding directly into the classroom, help students make up lost ground from the last year and provide more local control were turned down.
Negotiations between the House and Senate are just starting to get going on the various state budget bills. We will see what transpires between now and when the Legislature is set to adjourn May 17 and I look forward to a finished product worthy of bipartisan support.
Sincerely,
Matt