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Legislative News and Views - Rep. Marion Rarick (R)

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Legislative Update (May 27, 2014)

Tuesday, May 27, 2014

Dear neighbor,

The 2014 Legislative Session is now over. While I’m proud of the work I was able to accomplish – especially as the co-chair of the bipartisan Small Business Caucus – I found the session to be a difficult one for the job providers overall.

As a member of the minority party in the legislature, it’s often difficult to get any legislation passed. However, I was able to work on two major pieces of legislation that became law, repealing the business-to-business taxes and the I-94 expansion.


After hearing from a multitude of small business owners from across Minnesota, repealing the business-to-business taxes enacted by the Democrat majority in 2013 became a top priority of the Small Business Caucus for 2014. Once the 2014 Legislative Session began, I authored a bill and testified before the Tax Committee to repeal all three of the business-to-business sales taxes on the labor to repair commercial/industrial equipment, telecommunications machinery and equipment, and warehousing and storage services. I’m happy to report all three of those taxes were repealed!


I authored a bill to expand I94 from four lanes to six from the Rogers exit to the St. Michael exit.  With bipartisan cooperation at the federal, state and local levels, MNDOT announced that this expansion, slated to begin July 1, would be included in the Corridors of Commerce funding plan. I was thankful that my service on the Transportation Finance Committee resulted in raising the priority for I94 which is critical for the economic growth of our community.


Unfortunately, much of what passed out of the past two legislative sessions was not good for small businesses and the people they employ. For example, the new income tax increases hits small and midsized businesses particularly hard.  You may know personally that income tax increases hurt businesses that file through their owner's individual tax returns. You might be surprised to learn that 92% of businesses - the job creators in Minnesota - file through individual tax returns. For most of us, the business profit that we claim on our personal income taxes, stays right in the bank account of our business.  We never take that profit as our personal income, but rather invest it in the business to grow, hire new employees, make a capital purchase or just save it for future business planning. My fear is that with Minnesota's ever increasing taxes and regulations, border states like Wisconsin and the Dakotas will become destinations for new business start ups and expansions taking with it good paying jobs.


I also strongly opposed the effort by Democrats to impose forced unionization of childcare providers in Minnesota. Childcare providers are independent small business owners – mostly women – who take care of our precious children during the day. Unionization will only increase costs for providers and parents. Although this bill passes and was signed into law, currently, implementation of this law is on hold pending the outcome of a case before the U.S. Supreme Court.


I’m deeply concerned that the drastic hike in the minimum wage will lead to job losses. This new law increases the state minimum wage from $6.15 per hour to $9.50 per hour for large employers (gross sales over $500,000 annually) and $7.75 per hour for small employers (gross sales under $500,000 annually). The increase comes in three stages, and will reach the new minimums by August 2016. Current federal minimum wage is $7.25 per hour. Beginning January 1, 2018, the minimum wage will be adjusted based on the implicit price deflator with a cap of 2.5 percent. The Commissioner of the Department of Labor and Industry can suspend the inflationary increase if “leading indicators” show a “substantial” downturn in the economy.

Economic studies show that every 10% increase in the minimum wage leads to a 1-2% decrease in employment opportunities for low-skill and young workers. The House Democrats' minimum wage increase is 31% over the current federal minimum, meaning there could be a 3-9% drop in employment opportunities for people who already have trouble finding work or teens that need an entry-level job to build experience. Low-income workers are hit hardest by an increase in the minimum wage because it will make it more difficult and expensive for businesses to hire them.

It is my hope that the priorities of the 2015 Legislative Session will be friendlier to our small businesses and the hardworking people they employ.

As always, please still feel free to contact me about any state legislative issue. 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 229 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd, St. Paul, MN 55155.







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