Dear Neighbors,
It was a busy week in St. Paul with a lot happening in committee and on the budget front. On Tuesday, the Governor revealed details of his 2021-2022 budget proposal. This is the first step in the long process of debating and coming to agreement on a budget between the House, Senate, and Governor.
The Governor’s budget is headlined by $1.7 billion in tax increases, major spending hikes, and almost no meaningful spending cuts.
In fact, out of a massive $52.4 billion budget, the Governor is proposing just $150 million in budget reductions. That's not even a 0.3% reduction in spending — an outrageously small amount during a year where so many Minnesota families and businesses have seen their incomes fall off a cliff.
As for the tax hikes, the Governor is seeking a 15% increase to Minnesota's business tax rate which would vault Minnesota to the second highest in the entire nation. Additionally, he is also proposing a 10% increase to the top tax bracket, creating a fifth tier that would give Minnesota the third-highest income tax rate in the nation.
On top of that, the Governor is also raising regressive taxes on cigarettes and vaping products, which his own budget office says impacts low-income Minnesotans the most. We can estimate that about $941 million of the $1.7 billion in proposed taxes are regressive that will impact Minnesotans of every income level. Again, his budget office has shown previously that business, sales, and tobacco tax increases disproportionately impact low-income Minnesotans when compared to wealthy taxpayers.
It should come as no surprise that I am opposed to the Governor’s budget proposal. Thankfully, most of these initiatives will never become law.
It is nevertheless frustrating to see these proposed after nearly a year of damage caused by government-mandated shutdowns. Conversely, I am committed to working hard to make sure that the government shares in the sacrifice that so many had to endure in 2020. That is why we should balance the budget by reducing government spending and streamlining state agencies and programs.
Staying in Touch
Please be sure to reach out to me if you have any questions, concerns, or ideas on ways to improve state government. I can be reached by phone at 651-296-4237 or via email at rep.paul.novotny@house.mn.
Have a great day,
Paul