Hello from St. Paul,
Minnesota’s budget experts gave lawmakers their updated budget forecast recently.
For the current biennium, Minnesota is expected to see a $3.7 billion surplus in the current budget year (Fiscal Year 26-27), which is an increase of $1.3 billion from the November forecast. However, for the Fiscal Year 2028-29 budget cycle, a $3.4 billion structural deficit is projected.
The good news is that, at least for now, the economy is doing better than expected. Even though the state is currently bringing in more money, we still have a structural deficit for the next budget cycle. Increasing taxes or spending is only going to make matters worse in the future.
Many have also complained about rising property taxes. One of the reasons they have jumped is due to a Democrat House and Senate and Governor Walz passing numerous unfunded mandates on to local governments two years ago. The only tool a county has to pay for rising costs – in this case, forced upon them by a Democrat-led state government – is to increase property taxes to meet the demand. Reduce the number of unfunded mandates ordered by the state can only help your property tax burden.
An interesting bill moving forward would create a property tax commission that would investigate the cause of local property tax increases, and present options that would increase transparency regarding the budgets of local governments.
WALZ ADMINISTRATION REDACTS MAJORITY OF AUTISM SERVICES PROGRAM FRAUD REPORT
A new analysis from Optum raises serious concerns about oversight in Minnesota’s autism services program. Even more concerning is that the Walz administration blocked lawmakers from reading 90% of it.
According to the portions of the report that we could read, as much as 90 percent of claims reviewed may be improper or potentially fraudulent, deepening an already significant accountability crisis.
The number of providers billing the state for autism-related services has surged dramatically, climbing from just 41 to 328 within five years. Investigators found that some of these businesses appeared to lack even the most basic public-facing information, such as a listed phone number or website, yet were still approved to receive public funds. During the same period, average billing per client reportedly increased by roughly 3,000 percent.
Minnesota taxpayers have already seen an estimated $9 billion lost to fraud across programs. Continued delays and limited transparency from the Walz administration will only compound financial losses and further undermine confidence in state oversight.
ELIMINATING TAXES ON TIPS AND OVERTIME
One of the ways we can help families keep more of what they earn is to approve federal tax conformity and eliminate the taxes leveled on a worker’s tips and overtime.
Those earning tips and overtime are overwhelmingly low to middle-income earners who are picking up extra shifts to afford everyday costs. It is direct tax relief for workers – not corporations – and helps address affordability without creating new government programs.
These proposals were heard in the House taxes committee on Tuesday, and I am hopeful we will see positive action on them in the weeks ahead.
LOCAL VISITS
Area nurses stopped by this week to share their input on legislation important to their industry.
I also had a nice visit with dentist Michael Ahn from the New Art of Dentistry in Hastings. He was at the Capitol taking part in “Dental Day on the Hill.”
Hastings residents Mary and Edith also stopped by to share many of their legislative views.
Have a good weekend,
Tom