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Good morning and Happy March!
We are now wrapping up the third week of session, and things are moving quickly at the Capitol. Committees are hearing bills daily, and the major priorities for the year are front and center. House Republicans remain focused on addressing fraud, strengthening accountability, and lowering taxes for hardworking Minnesotans. Our goal is simple: protect taxpayers and make Minnesota more affordable.
February Budget Forecast
The February budget forecast was released on Friday, and revealed a current surplus while the looming deficit remains in place. The report makes it clear that while the state’s short-term outlook has improved, the long-term challenges have not gone away. Revenues are coming in higher than expected right now, which has created a temporary surplus. But in future years, the state is still projected to spend more than it takes in if nothing changes. That is what a structural deficit means, and it points to a spending problem that cannot be ignored.
The state budget has grown significantly in recent years, thanks to the DFL trifecta, and much of that growth is ongoing. A short-term increase in revenue (translation: more taxes) should not be treated as a reason to expand government further. Additionally, a future deficit is absolutely not an excuse to demand more taxes from Minnesotans who have already been fleeced. When House Republicans introduced a bill this week to eliminate tax on overtime and tips, in line with the federal government, Rep. Andy Smith said that this would "handcuff" our budget. When spending outpaces revenue, it is a spending problem not a revenue problem. We cannot handle more tax increases.
Now, a large portion of the budget is concentrated in Health and Human Services and K-12 Education, which together account for nearly three-quarters of total state spending. These are essential services, but when a large portion of the budget goes out the door to fraud, it's clear that we can trim it down and allocate less money to these categories. These facts further emphasize the need for fraud prevention and oversight measures, such as the Independent OIG.
The forecast provides helpful information, but it does not change the need for responsible budgeting. We should focus on slowing the growth of spending, reviewing programs carefully, preventing fraud, and providing meaningful tax relief where possible. Taking a disciplined approach now will put the state in a stronger position no matter what happens with the national economy.
 Fraud Isn't Free Act
This week, the "Fraud Isn’t Free" Act was formally introduced in committee, putting real accountability reforms on the table. The bill is built on a simple principle: when government fails to stop fraud, taxpayers should not be the ones left paying the bill. For too long, billions of dollars have been lost with few consequences for the agencies responsible. This legislation changes that.
Under the proposal, when fraud is uncovered, agencies must submit a corrective action plan to the Legislature, immediately suspend enrollment in the affected program, and remove the leadership responsible. Those individuals would be barred from state employment for five years. Agency budgets would be reduced by 10 percent, and agency head salaries cut by 25 percent until fraud cases are referred to law enforcement, responsible staff are terminated, and some of the stolen funds are recovered.
The bill also requires Minnesota Management and Budget to estimate the cost of fraud in future budget forecasts and permanently extends the state’s authority to withhold payments when fraud is suspected. Fraud is not victimless. Every dollar lost is a dollar taken from taxpayers or from vulnerable Minnesotans who depend on these services. This bill makes clear that accountability is not optional.
Shoutouts
Congratulations to the Osakis fifth grade class on their graduation from the DARE program this week!
Shoutout also to the Osakis boys basketball team on their advancement to postseason play this week. You should be proud of all your hard work this season!
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