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Legislative News and Views - Rep. Nathan Nelson (R)

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Thursday, December 9, 2021

Minnesota’s economic experts recently announced that the state’s economic condition is healthy. Very healthy.


For the current budget cycle, Minnesota now projects a $7.746 billion surplus – a state record amount.


This presents the question: what do we do with it?


It should be noted that some of it is being put away for the future. According to the Minnesota Management and Budget Office, with this forecast, allocations to the budget reserve are triggered and $870 million is allocated to the budget reserve account compared to end of session estimates. The balance of budget reserve account, as of this release, is $2.656 billion. This puts us on solid ground if and when Minnesota’s economic condition begins to falter.


Ultimately, I believe we should be looking for ways to get this money back into the hands of the taxpayers, or those who created the surplus in the first place.


With a nearly $8 billion surplus, I believe it’s time to address giving all senior citizens permanent Social Security tax relief. They paid into the program over the years, and they should get their money back without the state taking a cut. There’s no reason to continue punishing seniors by taxing their Social Security benefits.


Another area that must be tackled is repaying the state’s unemployment insurance $1.13 billion trust fund debt that is owed to the federal government. Without action, state business owners will be paying higher payroll taxes – potentially 15% - to make up the difference. It does not make sense to force local business owners to pay higher taxes when the state has billions of dollars waiting to be redirected.


There will also be a call by some to spend this money on new, permanent state government programs. Before that is explored, why not fully fund the programs we already have on the books?


A good example is a program I’ve been looking closely at – probation. The reimbursement level for probation from the State of Minnesota to Pine County was 28% of what it should have been this past year. Numerous other state programs suffer the same fate. If Minnesota believes in these programs, then we should fund them fully so they can operate efficiently. If we can’t properly fund what we already have, there is no reason to spend money on new government obligations.


State surplus news is always better than a deficit projection. But with that news, expect hundreds of ideas from lawmakers on how we should spend it. When you have $8 billion that needs allocation, it’s a safe bet that the surplus will dominate the headlines at the Capitol this year, and it’s my hope that by year’s end you will be receiving some needed tax relief.