House Wraps Up Omnibus Bills

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April 28, 2023

Executive Summary

• Taxes Omnibus Bill

• Standing Up for Nursing Homes

• Problems with Public Safety and Judiciary Bills

• Marijuana Legalization Bill Passes House

• New Threat to Drug Epidemic 

Taxes Omnibus Bill

Yesterday the House passed the Taxes Omnibus bill. Of all the omnibus bills, this is perhaps the most disappointing one. Despite Minnesota's $17.5 billion surplus, Democrats are raising taxes by nearly $10 billion so they can continue their out-of-control spending spree. This bill alone raises taxes by $2.2 billion.

You can watch me give an overview of the Tax bill here.

Some of the key provisions in this bill include:

Fails to Repeal Tax on Social Security

A full elimination of the social security tax received bipartisan support on the campaign trail. Minnesota is one of just 11 states that taxes this benefit. A full repeal would have given half a million Minnesotans an average of $1,276 in relief.

Instead, the House Tax bill expands the number of people who don’t have to pay state income tax on their Social Security Benefits to married joint filers with adjusted gross income (AGI) up to $100,000 and single filers with AGI up to $78,000. While this will certainly help more of Minnesota’s seniors, it leaves about 25% of Minnesota seniors still paying this tax.

We offered amendments in Committee and on the Floor several times this year to fully repeal the Social Security tax. All of our amendments failed on party-line votes. 

Minnesota seniors expected us to eliminate this tax and there was strong bipartisan support for it on the campaign trail. It is incredibly disappointing that the House DFL did not keep this promise.

Establishes a New 5th Tier Tax Bracket

This new bracket will tax individuals making over $600,000 and married joint filers making over $1,000,000 at a rate of 10.85%. 

This will give Minnesota the 4^th highest income tax in the country. It also increases our capital gains tax rate to 10.85%, since Minnesota treats capital gains the same as regular income. This gives us the 2^nd highest Capital Gains tax in the country.

Raises Taxes on Businesses

Mandates worldwide combined reporting when calculating the corporate income tax, something that no other state or country requires. 

Currently, all states currently collect taxes from multinational corporations based on the income they earn in the United States that can be attributed to Minnesota (“water’s edge” reporting). This bill will now tax companies with international operations based on their worldwide income and attribute a portion of that number to Minnesota.

This was actually tried and rejected in the 1980s as it was extremely difficult to calculate, due to all of the different exchange rates, interest rates, depreciation schedules and different financial accounting rules around the world. It almost caused a global trade war, which is why the states that had adopted it all abandoned it.

The United States is currently part of group of countries working through the OECD to come up with a framework to stop profit-shifting. This is an issue that should be handled at the federal level. 

If Minnesota becomes the only jurisdiction in the entire world to require combined worldwide reporting, it will put our state at a huge competitive disadvantage and make it much more difficult to attract jobs and investment from our important trading partners like Canada, Japan, Germany and South Korea. We will lose far more than we gain in short-term revenue from this proposal.

Changes E-pull tabs and Harms Local Charities

The definition of electronic pull-tab games will change to require the player to manually activate each ticket to be opened and manually activate the reveal of each row of symbols as a separate and distinct action. This will devastate Minnesota's charities and the local bars and restaurants they partner with. 

You can watch my speech on charitable gambling here.

No Public Safety Aid

The tax bill failed to include Governor Walz’ proposal for $300 million in public safety aid that would help our local law enforcement retain and attract new officers. House Republicans offered an amendment to take $30 million that was appropriated to the city of St. Paul to fix potholes and instead use that money for mental health support for our police and firefighters. That amendment was rejected on party lines. You can watch my speech on this amendment here.

At a time when Minnesotans are struggling with higher prices, it is extremely disheartening to see Democrats increase taxes and fees by $9.5 billion so they can increase state government by 40%. Family budgets haven't increased by 40%, so neither should the government. I voted 'no' on this bill and I hope significant changes will be made in the Conference Committee. 

Standing Up for Nursing Homes

The House passed the Human Services Finance Omnibus bill Tuesday. Despite good provisions to protect vulnerable Minnesotans, the bill utterly failed at addressing the nursing home crisis that is affecting every community in the state. 

We are in the middle of a long-term care crisis.  Fifteen nursing homes closed in our state in the last year and two more are on the brink of closing.

Families are waiting months and looking up to 4 hours away to find a safe place for their loved one. Hospitals are full of patients that should be discharged to nursing homes. Unlike other facilities, nursing homes are the only other option besides a hospital with nurses around the clock.

More than 1.3 million residents in the state are 65 or older. As these residents age, their need for care grows. Unfortunately, the State of Minnesota is not keeping up with these needs. 

In just the month of October, seniors were turned away 11,000 times from long-term care, mainly due to lack of staff. Of those, seniors were turned away 5,000 times from nursing homes. The inability to fully staff our nursing homes then creates unwanted stress on our hospitals, as nearly 20% of their bedspace is being taken up by people who should be recovering in nursing homes or assisted living facilities.

Since 2020, almost 2,600 nursing home beds have been taken out of service. That is the equivalent of fifty average-sized nursing homes. 

Democrats had originally appropriated 0.01% of their budget – $3.9 million for nursing homes. House Republicans were successful in adding an amendment to provide an additional $20 million, but our nursing homes still need more funding to stay afloat and attract and retain the staff they need. With a $17.5 billion surplus, we should be able to do more for our vulnerable seniors.

Problems with Public Safety and Judiciary Bills

On Wednesday, the House passed the Public Safety and Judiciary Omnibus bill and the Judiciary Policy bill. Major concerns with these bills include:

Reduces Penalties for Violent Crime 

At a time when we are facing increasing crime, this bill will reduce sentences for violent felons. Limiting prison time for violent criminals puts all Minnesotans at risk.

This change allows criminals to serve only half of their prison sentence or probation if they complete Department of Corrections programming. This includes those convicted of violent crimes including manslaughter, rape, kidnapping, assault, or domestic assault.

Anti-Law Enforcement 

Instead of providing law enforcement with the resources they need to keep Minnesotans safe, this bill ties their hands and ignores their needs by banning no-knock warrants and fails to make any significant investments to recruit, train, and retain law enforcement professionals. 

Instead, Democrats choose to invest over $100 million in unproven non-profits for “violence interrupters” and other community interventions with little accountability on how the money is spent. 

Expands Scope of the Human Rights Department 

The Human Rights Department is set to receive a 56% budget increase to significantly expand investigations of complaints of discrimination against employers, housing providers, educational institutions, and more.

It also creates a state “bias registry” where the state will track complaints from people who believe they have experienced bias, so the state can identify “hot spots” in communities. This provision requires the office to develop policies to solicit, receive, and compile reports from community organizations, school districts, and individuals regarding incidents a community member believes are motivated by bias – which can include actual or perceived race, color, ethnicity, religion, sex, gender, sexual orientation, gender identity, gender expression, age, national origin, or disability. There is no finding of fact or actual crime required. You can file a report simply if you believe someone spoke or did something based on bias.  This would create a de facto “snitch” line where anyone could turn their neighbor into the government for perceived instances of bias.

This Orwellian state registry has many problems and House Republicans offered an amendment to have it track only actual crimes motivated by bias. This amendment failed along party lines.

If this provision remains in the final bill, I believe it will lead Minnesota down a dangerous and divisive path.  Rather than encouraging people to come together and work toward understanding differences, it encourages people to assume and report bias. I hope it is removed in the Conference Committee. 

Marijuana Legalization Bill Passes House

This week, the House passed a bill to legalize recreational marijuana in Minnesota. I appreciate everyone who shared their views with me prior to the vote. I know that many people in our district and our state support legalization. 

Many of my colleagues who support legalization did not support this particular bill. I voted "no" because I have serious concerns with how the bill is structured and the impact it will have on young people, local control, public safety and the growth of the black market.

Below are some of my concerns with this bill:

Impact on Young People

The Minnesota Medical Association, the MN Psychiatric Association and the MN Association of Child and Adolescent Psychiatry all submitted letters or testimony about how THC impacts brain development until the age of 25 and how it can make long-term changes to how brain synapses work.

These groups also support a cap on the potency of THC, which has increased substantially over the years. The marijuana of the 1960’s and 1970’s had a concentration of about 1-3% THC. Current flower is about 15-17%. 

More troubling, however, is the increased potency of marijuana concentrates such as oils or wax that can be vaped. Some of these products have 80-95% THC concentrations and have been shown to cause anxiety, depression, psychosis and cannabis hyperemesis syndrome (uncontrollable vomiting).

Local Control

It also does not allow cities to have local control over the number of cannabis shops or allow cities to revoke a cannabis license. Cities and local police will have the responsibility of law and code enforcement, like liquor licenses, but they will not have the same right to limit the number of licenses in their jurisdiction or revoke the license if problems arise.

Public Safety

There is no standard for impairment in the bill and there is no road-side test available to determine intoxication.

I was happy to see an amendment was added to provide $10 million to train 250 new Drug Recognition Experts in the state patrol, but we still expect to see an increase accidents tied to marijuana use once it is legal. Evidence from other states and Canada suggest an increase in injury or fatal crashes between 6-15%.

Increase the Black Market

In addition, the stated goal of the bill is to provide a safe, regulated market for cannabis which will eliminate the black market for cannabis. The structure of the bill, however, ensures a black market will continue to thrive. Indeed, individuals can give away up to 2 oz without penalty, have 8 plants (4 flowering) at their home, and store 1.5 pounds at their home.  

This is an enormous amount of cannabis for an individual to give away or store.Two ounces of marijuana equals 168 joints and 1.5 pounds equals 2043 joints. That is far in excess of what an individual would use and it will perpetuate the black market. 

The bill makes marijuana legal as of August 1, 2023, but the regulated products are not expected to be available for another 18-24 months. The newly legal home-grown and current black market marijuana will be the only sources until the new regulated products are available. This will give the unregulated market a significant head-start before the products that are tested, packaged, labeled and taxed are available. 

My colleagues and I offered several amendments to improve public safety and local control, but all of them were rejected. I am hopeful that the Senate version of the bill will be better and that the Conference Committee sends back a bill with more guardrails to protect Minnesotans.

New Threat to Drug Epidemic

I recently learned about this and wanted to pass it on so parents and community members are aware.

Xylazine, or "Tranq" or "Tranq Dope," is increasingly being found as an adulterant in fentanyl. The drug is a long-acting sedative, but it is not an opioid. However, xylazine's use in combination with opioids, like fentanyl, can result in synergistic effects that may increase the risk of an overdose and/or death. 

Xylazine is not approved by the FDA, but it is approved for veterinary use and is used as an animal tranquilizer, sedative, analgesic, and muscle relaxant. 

The number of xylazine deaths in Minnesota have been increasing since 2019. One hundred percent of these deaths have also had fentanyl on board. In the state of New Jersey, about 90% of Fentanyl deaths are seeing xylazine mixed in. But detections of xylazine are also increasing in non-fatal overdoses.

Xylazine has been found in the form of pressed pills, powder, and rock-like material in Minnesota. NARCAN doesn’t work to reverse an overdose on this drug, but should be used if fentanyl is included. 

Please continue to talk to your kids and grandkids about the dangers of drug use.  One mistake can cost them their lives.

Photos

t was heartbreaking to attend the celebration of life service for Pope County Sheriffs Deputy Josh Owen. Law enforcement from around the state showed up in force to honor Deputy Owen and support his family and each other. Please keep Deputy Owen’s family and colleagues in your prayers.

Please Contact Me

Many of you have already been in touch to discuss your thoughts on the issues that matter most to you. Thank you for sharing your ideas! Please continue to contact me to discuss any matters to which I can be of assistance. I’d also love to meet you if you are coming to the Capitol!

The best way to reach me is by email: rep.kristin.robbins@house.mn.gov. For occasional updates, you can follow my Facebook Page at @RepKristinRobbins. You can also leave a voicemail on my office number, 651-296-7806, which is checked multiple times/week.

Have a great weekend!

Kristin

239 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
Saint Paul, MN 55155
ph: 651.296.7806