The 2020 legislative session begins Feb. 11 and, once again, many challenges are in store for this year.
While the two-year state budget was enacted last year, important fiscal decisions are still on the agenda with the projection of a $1.3 billion state surplus (the state’s rainy day fund is full at $2.359 billion).
There is a great opportunity at hand with the $1.3 billion surplus, and the focus should be on providing tax relief instead of using those dollars to grow government.
We should look at reductions in income taxes, reducing/eliminating the tax on Social Security, eliminating the provider tax on health care and beyond.
One of the best ways we could use surplus funds is to fix a problem which has led to farmers and other Minnesota business owners being slapped with unexpected tax bills this year. The state’s failure to fully comply with federal Section 179 tax code has left like-kind exchanges to be treated by the state as income.
In other words, anyone who uses a trade-in as part of a capital purchase could be subject to this new Minnesota tax, often in the thousands of dollars. Businesses and farmers trying to expand their business or update their equipment are really getting dinged, and this needs to be corrected.
We also could use surplus funds to help reduce health care costs, an issue that is straining people throughout our state. Last session, the House majority effectively raised health care costs on Minnesotans by $900 million per year by choosing to extend the health care provider tax. You obviously don’t reduce health care costs by raising taxes on health care. For all the talk about reducing health care, this session is a chance to do something about it.
This year’s capital investment bill to fund projects throughout the state – aka “bonding” – will be another headline issue this session. Even-numbered years such as this typically are when larger bonding bills are considered. The key is to strike a balance between completing crucial infrastructure projects while also keeping the cost at a level that is respectful to taxpayers.
The House majority and the governor both want multi-billion-dollar packages, which likely will need to come down in order to receive support from a super majority that is necessary to pass the House and Senate.
Decisions on energy also could come to the forefront this session with “Green New Deal” legislation having been proposed in our state. Minnesota-only cost estimates of green new deal legislation range as high as $1.6 trillion over the next 10 years.
We need a firm, reliable grid of base energy, but the Green New Deal push that’s coming from the House majority would be detrimental by moving away from baseline energy.
We have been hearing a lot about the energy issues going on in California, which has been at the forefront of green energy. They are having reliability issues and rolling blackouts.
In Minnesota, we’re seeing acres upon acres of farmland gobbled up by solar conglomerates, and that’s a big concern for us.
As the population of the world grows, we’re going to need food to feed those people. An all-of-the-above energy approach would best ensure diversity and flexibility to help meet changing demands.
On a final note, reports of fraud, waste abuse and significant staff turmoil within the Minnesota Department of Human Services over recent months have been extremely disappointing. The DHS is the state’s largest agency, and taxpayers deserve to know their tax dollars are being used responsibly. Vast overhaul of the agency is needed, with the focus on increasing transparency and accountability and protecting taxpayers.
Stay tuned for more news as the legislative session gets under way and, as always, your thoughts, questions and concerns are welcome.
– Chris Swedzinski serves as the District 16A State Representative for the State of Minnesota