Here is an update from the Capitol.
I presented HF 1356 in the Committee on Taxes today. This bill provides a sales tax exemption for materials and supplies used in the construction of the Monticello Fire Station.
Bids for this project just came in at $4.1 million. The final budget is not yet complete, but it is projected that additional equipment and site improvement costs will result in a total project cost in the neighborhood of $5.6 million. The fiscal note on HF 1356 shows that it will save the Monticello tax payers $180,000 in sales taxes for the building.
The fire station will be an attractive structure, but it will be built for practicality, featuring a modest Emergency Operations Center. It will serve the city well into the future and replace an undersized fire station on the Monticello Community Center campus that will be repurposed.
Thank you to City Administrator Jeff O’Neill, Fire Chief Michael Mossey, and Fire Marshall-Emergency Services Coordinator Dan Klein for coming to St. Paul to testify in committee.
The bill was laid over for possible inclusion in the Taxes Omnibus Bill. Legislation that benefits essential functions of local communities is generally not controversial; I’m optimistic that it will have the support of my colleagues when the time comes to draft the Omnibus Bill.
Governor Walz’s Proposed Budget
Last week, Governor Walz released his budget proposal for the FY2020-21 biennium. The proposal contains more than $3 billion in new taxes over the next two years. This is in addition to the $1.5 billion surplus Minnesota currently has. Overall, this budget would be an increase of 8.6 percent over the FY2018-19 budget.
Unfortunately, two of the most notable tax increases in the budget will hit low and middle income families particularly hard.
Under this budget proposal, the gas tax would be raised by 20 cents per gallon. This is a 70 percent increase over the current rate, which would make Minnesota’s gas tax the 4th highest in the nation.
The other tax, the sick tax, is a 2 percent tax added to most patient services in Minnesota and is one of the most regressive taxes in the state. It was supposed to sunset in 2020, but Governor Walz has proposed to fully reinstate it. This would add about $1 billion to health care costs over the next two years.
I oppose making health care and daily living expenses more burdensome for Minnesotan families. A surplus offers opportunities to find real solutions to these challenges. Unfortunately, this budget focuses more on taxing-and-spending than reforming.
Generally, once the governor’s budget is released, the House and Senate start focusing on our budgets. I’m ready to work with my colleagues in both bodies to find solutions that work for all Minnesotans, and I hope that we can change the direction from this initial proposal.
As always, if you need assistance on an issue pertaining to state government or have concerns or ideas about legislation, my office is available to you. You can e-mail at Rep.Marion.ONeill@House.MN or call my office at 651-296-5063. You can also write a letter to me. My office address at the Capitol is 357 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd, St. Paul, MN 55155.