The 2018 legislative session began last week and members and staff hit the ground running, already working on a number of important issues. Hope springs eternal at the beginning of every legislative session and this year is no different as I look forward to accomplishing the things you sent me to St. Paul to do. I am grateful and humbled for your continued support.
Perhaps the largest issue that will be debated this session will be centered on the state's response to the federal tax reform bill that was enacted at the end of 2017. The crux of the issues lies in whether the state should fully conform to the new federal tax code or not.
The 2017 federal tax law, enacted last December, changed the federal tax code substantially. Without Minnesota taking action to respond to these changes through tax conformity there will be a series of complex issues that the state's revenue department cannot easily mitigate. Filing your tax return will likely be delayed or simply unable to be processed.
Conversely, if the state does fully conform without additional policy changes, the revenue department estimates that an additional half-million in new state taxes could be collected from Minnesotans in the current biennium and more than $1 billion in the 2020-21 biennium.
Clearly, such an increase in revenue would be unacceptable. However, not conforming to the federal tax changes would also be unacceptable. Here you can see the bind that lawmakers are in as we try and untangle this complex problem.
Ultimately I expect some type of federal tax conformity to happen this year. My goal is to make sure that you and your family are able to enjoy the benefits of the new federal tax reform bill while being held harmless for any additional revenue the state may collect.
Ensuring that you are able to keep more of your hard-earned money is crucial in helping to grow our local economy. Thankfully, tax relief isn't only taking place at the federal level.
Just last year, Minnesota enacted one of the largest tax relief bills in our state's history. That tax cut combined with the federal reform means that Minnesotans will be keeping as much of their hard-earned money as ever before.
We continue to get further confirmation that tax reform at the state and federal levels are helping grow the economy as state economists released their annual February budget forecast on Wednesday. The forecast revealed that Minnesota can expect a $329 million surplus for the remainder of the biennium.
The state's official budget office, cited "increased U.S. economic growth arising, in part, from short-term stimulus from federal tax law changes" as causes for the positive budget outlook. They went on to say that because of the federal Tax Cuts and Jobs Act of 2017, economists expect more money in consumers' pockets, which, coupled with low unemployment rates, will help grow the economy.
As you can see, tax cuts are growing the economy and bringing in increased revenue, despite lower tax rates. Things are looking up for both the state and national economies.
Again, it is an honor to represent you at the capitol. Please do not hesitate to reach out to me to share any thoughts or concerns you may have about state government or the job I'm doing as your representative. It would be great to talk with you. I can be reached by phone at 651-296-8237 or via email at email@example.com.
Have a great weekend,