The legislature has returned from its annual, week-long Easter break. I hope you were able to spend time with your loved ones last weekend as we celebrated this joyous holiday.
We have a little less than six weeks to go until the end of the 2021 legislative session and there is still a lot of work to do. This week, the House Democrat majority rolled out their omnibus finance bills. As can be expected, their spending bills significantly grow the size of government and take more money out of the paychecks of hardworking Minnesotans through increased taxes.
Their omnibus taxes bill raises taxes by more than $1 billion and fails to fully protect businesses from Paycheck Protection Program (PPP) tax hikes on forgiven loans.
The bulk of the tax increases in this bill come from a brand-new 5th tier income tax of 11.15% that would give Minnesota the 2nd highest top income tax rate in the country and directly impact many businesses who have been hit hard during the pandemic. It also caps PPP relief at $350,000, meaning many businesses will still be taxed on forgiven PPP loans that were used to pay employees and keep their doors open during a difficult year.
In addition to the tax bill, Democrats’ transportation omnibus bill includes more than $1.5 billion in tax and fee increases.
Here is a quick breakdown of some of the tax/fee increases in the bill:
Here is a brief breakdown of some of the tax and fee increases in this bill:
- A gas tax increase ($363 million over four years) by linking Minnesota's gas tax to the Highway Construction Cost Index. This would result in an automatic annual inflationary gas tax increase.
- A sales tax increase to fund light rail and other transit ($916 million over four years). Democrats are proposing a half-percent increase in the Metro sales tax.
- A Motor Vehicle Sales Tax (MVST) increase ($120 million over four years).
- Registration tax increase ($149 million over four years) through changes to vehicle depreciation schedules.
- Luxury vehicle registration tax increases ($10.7 million over four years).
Such dramatic tax increases are unconscionable at a time when the state has a multi-billion-dollar budget surplus, billions in the budget reserves, and is set to receive billions more from the federal government from the congressional COVID bill.
These sorts of tax increases will only serve to slow our recovery from the pandemic.
Public Safety Omnibus Bill
This week House Democrats unveiled their Public Safety Omnibus bill, which includes numerous anti-law enforcement policies, as well as provisions to reduce sentences for criminals and hide even violent offenses from the public record.
Folks should know that Minnesota's top law enforcement organizations — the Minnesota Police and Peace Officers Association (MPPOA), the Minnesota Chiefs Association, and the Minnesota Sheriff's Association — sent letters this week in opposition to the Public Safety Omnibus, highlighting several concerns, including unfunded mandates on local law enforcement agencies, automatic expungement of numerous violent crimes, and granting activist civilian organizations policy and discipline power over local agencies.
Stay tuned for updates on this as it moves through the legislative process.
Staying in Touch
Please continue to reach out to me to share your questions, thoughts, or concerns. I can be reached by phone at 651-296-4293 or via email at firstname.lastname@example.org.
Have a great weekend,