Budget Forecast and Taxing PPP Loans
Last Friday, Minnesota Management and Budget (MMB) released their February economic forecast, showing a projected $1.6 billion surplus for the next biennium, up from a $1.27 billion deficit projected in November. This is great news and shows that not only is our economy recovering, but our current tax levels are more than able to handle this year's budget session. Unfortunately, Democrats are still pushing for massive tax hikes that hit Minnesotans at all income levels. A large portion of the Governor's proposed tax hikes land squarely on those who can least afford it, and are some of the most regressive taxes according to the Minnesota Department of Revenue's own tax incidence study. The governor's proposed budget includes a nearly 10% increase in state spending, up to $52.4 billion, and includes $1.7 billion in tax increases. It includes only $150 million, or .3%, in cuts.
Even with all these massive tax and spending increases, the budget proposal leaves out full federal conformity for PPP loan forgiveness, which both the Democrat Tax Chair and the governor have signaled that they support. Minnesota is currently the only state in the upper Midwest that has not exempted forgiven PPP loans from taxes. The bill for full federal conformity is sitting in the Tax Committee currently, and has not been brought up for any sort of committee action. Minnesota families and businesses have struggled this past year, and now is not the time to force an even higher tax bill on them. It is time for Democrats to abandon these massive tax hikes and pass federal conformity for forgiven PPP loans so that our economy can continue on the road to recovery.
Committee Deadlines
We are getting close to committee deadlines, with the first deadline being next Friday. This means that all bills need to be in a finance committee in either the House or Senate. Because of this, committees are working overtime to pass bills - unfortunately, this means that Democrat chairs often stifle debate and rush bills through committee with little or no debate. You can see this in action in one of this week's Commerce committee meetings here.
Getting Students Back In Classrooms
Finally, we are approaching the Governor's identified date for getting every Minnesota student back in classrooms. The Governor announced in February that he expected all schools to reopen by March 8th. It is long past time for our students to be back in classrooms, as distance learning has been increasing the achievement gap and hurting student mental health. As we approach March 8th, I look forward to an update from the Governor on how many of our students are back in school and whether there are any that still have no options other than distance learning.
|