Less than two weeks remain in the 2019 legislative session and, in the time remaining, the Legislature’s primary task will be agreeing upon our state’s budget for the next two years.
Earlier this session, Gov. Tim Walz and each legislative majority laid out their respective funding plans. In previous weeks, both the House and Senate have debated, voted on, and passed budget bills to fund state government.
The proposals put forth by House Democrats and Senate Republicans differ greatly, and the next step is Conference Committee — where legislators from each body come together in negotiations to agree on budget bills to eventually send the governor.
I have some serious concerns with the current slate of bills passed by the Democratic majority in the House, and it’s during the conference committee process that I hope these bills can be improved.
Atop my list of concerns is the hefty tax increases that are at the core of these bills. Democrats’ budget bills collectively contain $12 billion in tax increases over the next four years. This large tax hike is headlined by a much-talked about 70 percent gas tax increase, which works out to 20 cents per gallon.
Such a drastic gas tax hike would give Minnesota the fourth highest gas tax in the country, and would result in Minnesotans paying more every time we fill up. Not only would it raise the cost of gas — and thereby driving and commuting — but it would also likely raise the price of most of the goods and services we consume.
Small business owners using vehicles and trucks to deliver goods and products will tell us how impactful a 70 percent gas tax increase will be on their operation, and their capacity to pay employees and create new jobs. In most cases, in order to recover lost margins from higher gas prices, small businesses would need to raise the price of products, passing these costs along to consumers.
I’ve certainly heard from families in Carver County who commute around the metro, and they are worried about the significant impact this proposal would have on their monthly gas bills. I’ve also heard from local small businesses who are planning to hold back on hiring a new employee, due to anticipated tax impacts from these new costs.
These budget bills also contain a continuation of the sick tax, which is a 2 percent tax collected on nearly all healthcare services. This is expected to add $2.5 billion to the price of healthcare over the next four years and would especially raise costs for the sickest Minnesotans who visit the doctor the most and often have already mounting medical bills.
Last week, the Department of Revenue announced the governor’s tax plan would hit low and middle-income Minnesotans the hardest, with those earning less than $45,000 facing double-digit percent increases. Likewise, the gas tax has the greatest impact on those who make less money and pay a greater percentage of their income for necessities like food and gas.
As the Legislature considers the above tax increases, it’s important to keep in mind that Minnesota still has a $1 billion budget surplus, meaning taxpayers have already paid in more than is necessary. During a time of such a large surplus, raising taxes on Minnesotans by $12 billion should be out of the question.
With the immense tax increases (and some controversial policies) found in these budget bills, arriving at a final agreement with divided government will undoubtedly present challenges. At the end of the day, I believe Republicans, Democrats, and Gov. Walz are all here to work to improve the lives of Minnesotans and make our state the best possible place to call home.
Nonetheless, it’s clear there are some significantly different philosophies and approaches to best get there. These differences won’t be easy to overcome, but I’m eager to find common ground with fellow legislators and the governor. As we enter the final stretch of the 2019 legislative session, I will continue to work for a responsible state budget that invests in our priorities without the weight of tax increases.