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Legislative News and Views - Rep. Mary Franson (R)

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Legislative Update (September 3, 2013)

Tuesday, September 3, 2013

Dear neighbor,

Next Monday, the legislature is scheduled to convene for a special session to address disaster relief for the victims of the June storm. I’m proud that we can come together in a bipartisan way to help those communities in need of assistance as they work to recover from the storm’s devastating effects. However, I’m dismayed that we will not have the opportunity to repeal many of the onerous taxes imposed by Governor Dayton and the Democrats in the legislature from the last session.

When Governor Dayton first began to talk about calling a special session, he initially insisted that the scope of the session be focused solely on disaster relief. However, when the governor arrived at Farm Fest several weeks ago, he announced to farmers that he supported adding the elimination of the tax on farm equipment repair to the agenda for special session. Curiously, he claimed that he and his staff were unaware that farm equipment repair tax – part of the overall new tax on equipment repairs – was in the final tax bill. I continue to be puzzled by that statement given the fact that the debate on the House floor made it quite clear that provision was part of the Democrats’ tax bill.

While I appreciate Governor Dayton’s words in support of repealing the tax on farm equipment repair, we have a cornucopia of bad tax increases we need to eliminate. Small business owners from our community and across the state have contacted me urging me to support the repeal of all three business-to-businesses enacted this past legislative session by Democrats. These taxes affect labor costs for repair and maintenance of equipment, the purchase of telecommunications equipment, and a warehousing and storage tax to take effect in April 2014.

The call to repeal these taxes hasn’t come just from Republicans. The former Democrat Speaker of the House, Margaret Anderson Kelliher, called for repeal of the telecommunications tax. Governor Dayton said he even supports eliminating the warehousing tax, but wants to wait until the 2014 legislative session to address it since the tax doesn’t kick in until next April. Unfortunately, our small businesses and the hard-working people they employ can’t wait that long.

You don’t need to take my word for it. Small businesses around the state have been speaking out about the impact these taxes would have on them.

In June, Minneapolis-St. Paul Business Journal reported that Red Wing Shoes is delaying construction of a $20 million distribution center in Red Wing because of this new tax.

The chief of business development at a warehousing and freight transportation provider located in Dayton expressed his frustration to KARE 11 during the summer, “Why would a customer want to do business with us in Minnesota when they can go somewhere else and not have that 6.8% sales tax?”

In Minneapolis, the CEO of a warehousing company was quoted in the Star Tribune saying “Why wouldn’t I go to Hudson, and just ship across the border?”

During the negotiations for special session with Governor Dayton and legislative leaders, House Republican Leader Kurt Daudt offered three opportunities for Democrats to fix their mistakes from last session and Democrats said no each time. The proposal pushed by Representative Daudt advocated for full repeal of the equipment repair tax, telecommunications tax and the warehousing tax. Unfortunately, Democrats could not even commit to repealing one of them. Now, hardworking Minnesota taxpayers will remain on the hook for these burdensome new taxes with no guarantee of their repeal in the 2014 legislative session.

While I’m happy that Minnesotans – especially those in Douglas County – will receive the disaster assistance they need, I’m disappointed that we’re missing an opportunity to address the man-made disaster brought upon Minnesota by the 2013 legislative session.

As always, please feel free to contact me by e-mail at Rep.Mary.Franson@House.MN or contact my office at 651-296-3201. You can also send mail to my office address: 211 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.