Hello from St. Paul,
The March 15 deadline to prevent tax hikes on every single employer in the state has come and gone. Sadly, despite passing the Senate with broad bipartisan support on a 55-11 vote, it is being held hostage for end of session negotiations by the House Majority.
Minnesota needs to replenish its Unemployment Insurance (UI) Trust Fund by more than $1 billion. $9.3 billion in available state surplus funds could be used for this purpose, as could federal COVID relief funding that totals more than $1 billion. By not utilizing either of these pots of money, automatic tax increases will kick in on local employers by 15% or more. The House Majority is opposed to refilling the fund, and House Majority Leader Ryan Winkler has explicitly stated he wants to use this issue to leverage other Democrat priorities.
Last month, Governor Walz’s employment commissioner said March 15 was the deadline for the lawmakers to pass legislation and prevent significant tax increases on Minnesota businesses. The commissioner told the workforce committee that a failure to act would “create major problems” for the State of Minnesota.
Before the deadline, we tried twice to move legislation that would have prevented these tax increases. In both cases, the House Majority blocked them from debate.
This is the kind of political gamesmanship Minnesotans despise. We clearly had a problem that the legislature needed to solve. It could have very easily been taken care of with the billions of dollars currently sitting in the state’s coffers. Common sense would suggest you don’t need to raise taxes to pay off anything if you have more than $10 billion sitting there. Yet, this is being held hostage like so many other common sense bills have been in the past, even though the Governor, the Senate GOP, the Senate Democrats, and the House Republicans all agree. I can't imagine what House Democrats think they will get from this, but I hope they will come to their senses soon.
Because they blew through the deadline without addressing the issue, local employers can now begin preparing for massive tax increases.
My hope is we can address this before the end of session so employers can get a refund, but according to the administration, it looks like these tax hikes will be going through.
Talk to you soon,
Nolan