On February 28, lawmakers learned that our state budget surplus had grown once again, as one record total was replaced with a new benchmark.
In their latest economic forecast, Minnesota’s economic experts project a $9.3 billion surplus for the 2022-23 legislative biennium. That figure is up $1.5 billion from the already historic $7.7 billion surplus projected in November.
In its report, Minnesota Management and Budget also indicates the structural balance in the FY 2024-25 planning estimates remains positive and largely unchanged from November.?It also says uncertainty due to inflation and geopolitical conflict pose risk to the budget and economic outlook.
But in the short term, decisions must be made on $9.25 billion. It’s worth remembering that our government is also fully funded for this biennium.
With prices skyrocketing under the Biden/Walz economy – higher prices on food, gasoline, natural gas and many other cost-of-living necessities – it’s clear we need to provide Minnesotans with tax relief.
Finally ending the state tax on Social Security would be a good place to start. Many senior citizens are living on fixed incomes to begin with, and it doesn’t make sense for Minnesota to be taxing their benefits.
I also have a plan that would help farmers. The Minnesota House Taxes Committee heard my legislation that would remove the sales tax from agriculture fencing materials. I brought this bill forward mainly in response to the drought and to aid livestock producers in their effort to feed their animals. This bill could become part of a more comprehensive House taxes proposal that will be unveiled by the committee in the coming weeks, and the Senate will hear it on March 8.
We also must prevent a local business owner tax increase of 14% or more from taking effect on March 15. A debt of more than $1 billion in Minnesota’s Unemployment Insurance (UI) Trust Fund must be repaid, and unless the legislature agrees to use surplus funding to cover the cost, every local employer will be hit with tax increases to make up the funding difference.
At the end of the day, all areas of tax relief should be on the table this session, as we should be seeking to help as many Minnesotans as we can. The measures we enact need to be significant and permanent, and with a nearly $9.3 billion surplus we need to be bold with our tax relief vision.