Omnibus Bills
As a reminder, Minnesota started the year with a record $9.3 billion surplus. The Legislature has spent some of those funds in key areas, including repaying the Unemployment Insurance debt and replenishing the trust fund and the Frontline Worker bonuses. The surplus now sits at nearly $7.2 billion.
As I have said many times, we must return this surplus to Minnesotans in the form of permanent tax relief. With inflation running hot, the economy doesn’t need any additional stimulus. Instead, we need to make our state’s economy competitive in the long run by lowering tax rates and ending the tax on Social Security – more on that below.
Unfortunately, House Democrats continue to be more concerned about spending the surplus and expanding the size of government even further, which is unsustainable. As a reminder, this is not a budget year. We are in the first year of a fully-funded two-year budget we passed last session. Creating new programs and spending now will only increase the base budget for the next biennium, increasing the growth of government.
Our state Constitution has a balanced budget requirement. If, after completing the two-year budget, we have a surplus, it should be returned to the taxpayers.
Thus far in the House Omnibus bills, the House DFL Majority has proposed $21 in new spending for every $1 in tax cuts. This is unacceptable when families, seniors and businesses are struggling to make ends meet. These House bills will now head to conference committee where I hope the Senate will hold the line on all of the spending increases.
Here's a quick recap of DFL spending proposals this week:
Health and Human Services: This bill spent hundreds of millions of dollars over the next four years only to drive up the cost of health care for Minnesotans and impose burdensome new regulations. It failed to address the current long-term care crisis in our state. We have lost 16 nursing homes since the start of the pandemic, including four facilities this year alone. Instead of increasing reimbursements to allow homes to pay housekeeping, dietary, and direct care staff better wages and attract workers, Democrats sought to establish an unelected commission to require facilities to increase wages and hire more staff.
Democrats also put Minnesota on the path to a single payer system by increasing regulations on health care and growing government's involvement by requiring hospitals to create staffing ratios and making them responsible for helping patients find affordable insurance. A government takeover of health care would require billions in tax hikes on Minnesotans of every income level. I voted against this bill.
Taxes: The Democrat tax bill prioritized “targeted tax credits” for specific groups instead of permanent income tax cuts for all Minnesotans. Although they did increase the income limits and subtraction for the Social Security tax, they did not fully eliminate the tax on Minnesota Seniors.
Our current high tax rates make us uncompetitive with our surrounding neighbors and with all other states in the country. Minnesota currently ranks 45 out of 50 for “Business Tax Climate” and have the 5th highest income tax and 4th highest corporate tax in the country. We also rank 10th for the most outward migration in the country. We are also only one of 12 states that still taxes Social Security income.
If we want to keep and attract new talent and new investment to our state, we must get out of the top 5 highest taxed states or we will significantly reduce our long-term economic growth.
You can watch my speech about making our state more competitive here. The DFL bill provided a lot of one-time "tax relief" to Minnesotans with little or no tax liability through a variety of refundable credits, including a whopping $1.1 billion for a Renter’s Credit. The bill would shift $18.7 million in rising property tax burdens directly onto middle class families.
The failure to provide permanent tax relief for Minnesotans made me a “no” vote on the Tax bill. I am hopeful it will come back from Conference Committee with proposals for permanent tax relief to make Minnesota more competitive.
Labor, Workforce, Climate & Energy, and Commerce: Energy and gas prices are soaring under the Biden/Walz economy. This bill made the problem even worse by raising billions of dollars in taxes and imposing new mandates on job creators. The Labor portion of the bill focused on burdensome mandates, regulations, taxes, and increased fines. In the Workforce portion, Democrats allocated millions of dollars to friendly nonprofit and community organizations with little oversight from DEED or other state agencies. At a time where there have been prominent high-profile cases of nonprofits abusing taxpayer dollars, we need stronger accountability and oversight for any tax dollars that go to nonprofit groups.
The Climate portion of the bill did nothing to address the skyrocketing energy and gas prices Minnesotans are facing. It provided climate change grants, electric Met Council buses, and mandates on housing providers for more EV charging stations. It also did nothing to responsibly source materials and components needed for wind, solar, and energy storage systems. Given the current geopolitical climate, we should not be sourcing materials for solar panels from foreign adversaries like China and Russia. I also voted no on this bill.
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