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Legislative News and Views - Rep. Dean Urdahl (R)

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Everyone is now a tax cutter

Friday, March 7, 2014

Dear Neighbor,


It’s interesting how a $1.2 billion surplus makes everyone in St. Paul a tax cutter.


How can Democrats at the Capitol slap themselves on the back for generating a $1.2 billion surplus after raising taxes and fees by $2.5 billion? They raised spending by historic amounts, taxed Minnesotans at unprecedented levels and act as if this is a good thing. It’s ludicrous.


Sure, we have repealed $500 million worth of their mistakes. That’s like me – a house painter for decades – taking credit for touching up the threshold I just stomped on before it dried. That would not fly with my dad, Slim.


But I do sincerely thank Gov. Mark Dayton and other Democrats for their work to repeal these taxes. It is a start.


We legislators never – ever – would question motives of fellow representatives, but these tax cuts come at a curious time. November is not too far away. Can they find a way to cut one of the task forces they created last year and be champions of a more efficient government while they’re at it?


Anyway you look at it, we are still taxed around $1 billion more than necessary even after the majority raised spending to historic heights. Only two years ago, one of the biggest complaints I heard from folks on Main Street is that our former majority was not cutting spending enough. Now, with one-party control in St. Paul, we have approximately $5 billion more in state spending and are paying around $2.5 billion more in taxes and fees.


My top priority from Day 1 in the House has been to make Minnesota a better place to do business, providing our citizens with more opportunities. Our state’s business climate often is ranked among the nation’s worst and that is unacceptable. New taxes Gov. Mark Dayton and fellow Democrats passed last year on equipment repair, warehousing and telecommunications only made business more difficult in Minnesota. They’ve been repealed, but we still are suffering their damage.


We heard testimony in the House about how job providers are relocating to places like Wisconsin or Iowa. We also heard about out-of-state accounts bailing on contracts with Minnesota companies because these new taxes were proving too costly. Thankfully, my friends across the aisle recognized these mistakes and repealed those three taxes early this session. The question remains how much damage already was done. Businesses plan years ahead, meaning some already chose to abandon Minnesota.


It is good that we continue experiencing revenue growth above prior projections. The former majority erased a $5 billion shortfall without raising taxes back in 2011 and we have seen positive economic growth every biennial forecast since. There are a number of theories regarding how we should appropriate the anticipated surplus revenue and I advocate a responsible approach.


First of all, we should not treat this as found money. We need to be good stewards. Our top priority should be to cut taxes and the aforementioned are a good start. But we can do more and also should look at putting more money in reserves. Our reserve accounts have remained static while the state budget has increased, leaving a lower percentage of back-up funds available in case of an economic fall.


What are your thoughts on what we should do with surplus funds? I’m interested in receiving feedback as we consider our options.