We’re heading into the last month of the legislative session, which means we soon shall find out how much of the state’s $10 billion surplus will be converted to tax relief. And the differences are rather substantial in what the House and Senate majorities propose.
Let’s start with House Democrats, who propose $21 in new government spending for every $1 in tax cuts. Their plan spends more on programs, with total tax reductions in the House Democrat tax bill amounting to less than $600 million over the next three years. This is a mere fraction of the $12.2 billion they propose in new government spending, representing a 14 percent state spending increase.
The Senate is taking a different approach and recently approved what would be the largest tax cut in state history, at more than $8 billion. Tax cuts account for most of the budget surplus in the Senate Republican plan, including eliminating the state’s Social Security income tax and reducing income taxes. The average tax relief per filer would be $759, with a family making $100,000 per year receiving a tax break of $1,066 every year.
Suffice to say there is a long way to go in finding agreement on these supplemental budget proposals. While I may not agree with each and every detail of the Senate Republicans’ plan, I generally agree with their idea to put over-collected tax dollars back in the hands of over-charged taxpayers with meaningful, permanent relief.
Funding to resolve the unnecessary tax increase that recently hit our employers stands as one glaring omission from the House’s proposal.
Minnesota, with its massive surplus, can more than afford to replenish its Unemployment Trust Fund, repeal the tax increases on employers, and stop Minnesota from having to borrow $50,000 a day from the federal government.
Remember, the Senate already passed a bill, with significant bipartisan support, to take care of this issue but inaction by the House Democrat majority continues to bog down this legislation. The Democrat House Speaker downplayed the original March 15 deadline prescribed by state officials, insisting that lawmakers had until April 30, when tax bills are due, to act. But that date, too, is rapidly approaching with no progress to show.
On a final note, a conference committee has been meeting to reconcile differences between House and Senate packages for drought relief that impacted farmers throughout our state last summer. The House bill includes a $5.1 million total – and a maximum of $10,000 available to each farmer. The Senate bill includes a $7 million appropriation with up to $5,000 available per farmer.
One major difference that needs to be resolved as this bill is prepared for final approval surrounds $13.3 million the House provides to the DNR in its drought relief bill, compared with 0 DNR dollars in the Senate version.
I hope this bill soon comes to the floor worthy of strong bipartisan support so we can approve it and help our farmers who suffered losses during last year’s dry conditions.
Have a good weekend and, as always, your input is welcome.