By Rep. Dean Urdahl
Democrats have full control of the Capitol and they got most of their wish-list items this session: Historic tax increases, record spending levels, same-sex marriage and a thank-you for unions.
The $2.1 billion tax increase they passed just before our session adjourned at midnight Monday will result in higher costs for all Minnesotans. One of the most concerning new taxes is on business-to-business transactions. This will result in higher costs for consumers and make our state less competitive in the business world. Border cities like Moorhead and Winona could be hit especially hard.
Other new tax increases include cigarettes (up $1.60 per pack), internet purchases and digital downloads, and warehouse storage. Our state’s top earners also will now be paying some of the highest income tax rates in the nation.
All these taxes are unnecessary, especially since we are projected to enjoy an $856 million surplus in 2016-17. It was possible to set a new two-year state budget without these tax increases, but that would have meant holding our spending to within our projected revenue growth. Instead, the governor and the legislative majority increased state spending by 8 percent, more than double the rate our revenue is increasing.
A big piece of this spending increase will go toward the estimated 1,300 new government jobs bills from this session will create. With each new job commanding at least $50,000 in wages and benefits, that adds another $63 million annually to the state spending base. I would have preferred to help people get back to work through economic freedom and a healthy private sector.
Maybe the most contentious debate this session pertained to an initiative to unionize day care providers and personal care attendants. The vast majority of providers, parents and editorial boards from throughout the state opposed this initiative. Union heads, the governor and Democrat legislators seemed to be the only ones behind this push, which ultimately passed after many hours of discussion in both legislative chambers. A House member flatly admitted “there’s probably some of that” when a radio host asked him if this bill was a thank-you to unions who helped Democrats win elections last fall.
One place the minority played a significant role this session was in bringing reason to a capital investment bill that funds construction projects throughout the state. House Democrats initially proposed an excessive $800 million bill, but Republicans deemed that price tag to be too steep and did not provide the votes necessary to gain the super majority these bills require to pass.
Negotiations continued and we settled on a focused $177 million plan in the waning hours of the session. Top components include restoration work on the Capitol ($109 million), flood mitigation ($20 million), expansion of a veterans home ($19 million) and funding for wastewater and clean-water projects that primarily benefit rural Minnesota ($8 million).