ST. PAUL – House Democrats blocked a last-ditch Republican effort Monday to vote on bipartisan Senate legislation that could have prevented a tax increase from taking place despite a historic state surplus.
State Rep. Steve Green, R-Fosston, said the issue centers on the state’s unemployment insurance trust fund that was depleted with more people out of work during the pandemic. The federal government provided funding to the state to keep the program afloat and now that debt of more than $1 billion is due.
“There is no way of sugar-coating this: House Democrats are responsible for a significant tax increase at a time the state has a historic surplus and people already are being crushed by higher prices in the Biden-Walz economy,” Green said. “Workers in our state have been through the wringer the last couple of years and many employers were unable to survive the pandemic, especially with restrictions the governor placed upon them. Those that did stay afloat are working to recoup their losses and now House Democrats are cutting off their recovery at the knees with unnecessary tax increases.”
Gov. Walz, House Republicans, Senate Republicans, and most Senate Democrats support passing a clean bill to fully replenish the UI funds. The Senate one month ago approved by a veto-proof majority legislation to do so.
But House Democrats continued to withhold that bill through the March 15 deadline. Their own UI bill, which the Minnesota Department of Employment and Economic Development testified would result in six years of tax increases on businesses, has been stagnant since early February.
House Republicans made a move to declare urgency on the matter Monday and take up the Senate bill for a vote but, for the second time in the past week, House Democrats blocked the effort.
Now, a tax increase is set to take place to pay the state’s federal debt despite the fact Minnesota has a surplus of around $10 billion.
Green said members of the House majority continue to downplay the impacts of their inaction on this issue, but said real-life reports indicate the tax increases could be significant. One recent article quotes Greater Minnesota employers saying they face tax increases in the tens of thousands of dollars next year. In one reported case, a 130% increase translates to a $21,000 spike.
“House Democrats can spin this a million ways, but they bear sole responsibility for the state’s failure on this issue,” Green said. “This tax increase is completely unnecessary, but House Democrats continue playing politics with people’s livelihoods and this is the squarely the result of their extreme partisanship.”
The Minnesota Department of Employment and Economic Development also has raised significant concerns about the consequences of not enacting UI legislation by March 15. DEED Commissioner Steve Grove recently told members of the House workforce committee Monday that time is critical. “As of (Tuesday) this gets a lot harder to unwind, and time is of the essence on this piece,” Grove said.
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