Dear Neighbor,
Before we get to official House business, I want to congratulate the Cass Lake-Bena girls basketball team for earning a spot in the state high school tournament this week. Also, good luck to the Cass Lake-Bena boys team as it plays in the Section 8A championship Friday with a state tournament berth on the line. Nice job, Panthers, and good luck!
The biggest news from the Capitol this week is the deadline to enact legislation preventing a tax increase from needlessly taking place passed without action in the House. The state’s unemployment insurance trust fund was depleted with more people out of work during the pandemic. The federal government provided funding to the state to keep the program afloat and now that debt of more than $1 billion is due.
Without legislation enacted to pay off this debt, the default is a tax increase on employers. Gov. Tim Walz, House Republicans, Senate Republicans, and most Senate Democrats support passing a clean bill to fully replenish the UI funds.
The Senate one month ago approved by a veto-proof majority legislation to do so. It is just sitting there, waiting for the House to pass it and send it along to the governor for his expected approval.
House Republicans made motions twice in the days leading up to the March 15 deadline to declare urgency on the matter and take up the Senate bill for a vote. Both times the House Democrats blocked a vote on approval from taking place.
This unnecessary tax increase will impact all of us one way or another at a time we already are seeing costs soaring at 40-year highs and the state has around $10 billion in surplus revenue. This issue could have been put to rest weeks ago but, instead, the majority decided to hold back the UI bill as political leverage.
Now, because the majority did not act, a tax increase is set to take place to pay the state’s federal debt despite the fact Minnesota has a surplus of around $10 billion.
Real-life reports indicate the tax increases could be significant. One recent article quotes Greater Minnesota employers saying they face tax increases in the tens of thousands of dollars next year. In one reported case, a 130% increase translates to a $21,000 spike.
Our focus should squarely be on helping Minnesotans recover income they lost during the pandemic, yet the House majority just made that hill steeper to climb. We face an opportunity to provide historic tax relief this session but allowing this unnecessary tax increase to take place is taking us the opposite direction.
We’re six weeks into the session and all the state has to show for it is a tax increase at a time the state has a massive surplus.
Sincerely,
Matt