Hello from St. Paul,
This week was supplemental budget week in the Minnesota House. Last session, lawmakers set the state’s budget and fully funded all agencies within state government.
The Democrat House majority plans to increase state government spending by $7.4 billion. If their plan was signed into law, Minnesota would spend $59 billion during this current budget cycle. Unfortunately, much of this surplus is one-time money, and the Democrats budget gives none of the surplus back to the taxpayer. For those reasons, among others, I will likely be voting against each budget bill.
This week, many of their increased spending priorities were debated on the House floor. Supplemental budget proposals in the areas of Legacy funding, agriculture finance, housing, broadband, state government, transportation, veterans, pensions, and education finance have all been presented and approved by the House majority. The remainder of their supplemental budget will be debated in the coming days.
As always, the House and Senate will need to work out their differences. Conference committees made up of an equal number of representatives and senators will be tasked with crafting compromise legislation that can be approved by both legislative bodies.
Speaking of conference committees, one was recently appointed to craft a compromise on solving the unemployment insurance trust fund debt.
As you’ll recall, record-setting unemployment claims depleted Minnesota's UI trust fund at the start of the pandemic. This resulted in a debt of more than $1 billion to the federal government, which serves as the backstop when states deplete their UI funds. Our state is also wasting $50,000 per day just to make the interest payment on this federal loan. To make up for that loss, payroll tax rates on local employers increased on March 15 by 14% or more to replenish the fund. Those payments are due on Saturday.
More than 70 days ago, the Minnesota Senate approved a bill that would not only solve this problem but stop the unnecessary tax increase on every job provider in this state. Their bill was broadly bipartisan. It passed on a vote of 55-11. Over half of the Democrats in the Senate voted for the bill. On Monday, the Minnesota House finally took up this bill, but added a number of poison pill provisions onto it that have nothing to do with the unemployment insurance trust fund. This is incredibly frustrating since Governor Walz, Senate Democrats, Senate Republicans, and House Republicans all agree on this issue. It is only the House Democrats who are preventing this from becoming law.
So, a conference committee will iron out the differences and will hopefully get compromise legislation to us very soon.
Talk to you soon,