Read it first in the Mesabi Tribune

Published March 7, 2026

Every year, we get a budget forecast to guide the legislative session. Although this isn't a budget year, it helps us understand how the economy is affecting revenues, provides updated spending projections, and determines whether we have extra funds or shortfalls to address.

In 2025 when session started, we learned that we were expecting a $6 billion budget deficit. This stemmed from one-party control that spent the entire $18 billion surplus, raised taxes by $10 billion, and let fraudsters steal an estimated $9 billion from Minnesota taxpayers. However, with political balance back at the capitol, we are seeing a small surplus of $3.7 billion, and projected smaller deficits. This is what I continue to hear from the district: People want us to work together, no matter who is in charge, to govern responsibly.

Since we have a small surplus, I am supporting a few bills to address the high costs of living here with meaningful tax relief. First, there is bipartisan support for ending the tax on tips and overtime as both presidential candidates supported in 2024 and it was passed into law for federal tax policy last year. Whenever there are changes in federal tax law, states will look at “tax conformity” to adopt the same changes. This one makes a lot of sense.

The wages earned by tips and overtime should not be taxed. These wages are different than the expected salary and are usually because of excellent service or going above and beyond to meet the employers’ needs. It might not impact a lot of people, but this is a change that will have a big impact on those who can really use it.

Second, we should look at capping property taxes at 3% of assessed value. I heard from many of you this fall when the bills for property taxes were mailed out and there were surprisingly steep increases. This is a result of unfunded mandates from St. Paul being forced on cities and counties. Yes, there are federal requirements too, but those are being put in place to stop the fraud, something we all agree we need to do.

Putting a cap on property taxes makes it a lot harder for legislators to keep adding to the mandate list. This should be paired with a moratorium on mandates to help local budgets stabilize and I’d support allowing local governments to opt out of mandates that are stressing their budgets.

Finally, the majority made changes to the tab fee structure in Minnesota and drove up the costs for a lot of families. The change means drivers aren’t seeing their tab fees on new cars go down, even as the value of the car drops each year. Minnesota is a significant outlier in the Midwest. On an average new car purchase, we are 36% more expensive than Iowa, 366% more expensive than Illinois, 657% more expensive than North Dakota, 728% more expensive than Wisconsin, and a whopping 831% more expensive than South Dakota.

These costs add up and are making everyone feel the pinch just a little more right now. Minnesota does have a large road system – but after wasting billions on fraud and subsidizing failing train projects, we could do better to keep costs affordable for all Minnesotans. In addition, since most new cars purchased in the United States are made with Iron Range steel, we should not have tax policies that discourage people from purchasing new cars.

These ideas to provide meaningful tax relief are not partisan. We all want to keep costs down and help people afford their lives. I’m glad that balance at the Capitol means bipartisanship will be required for things to get done, and I hope that these bills will make it over the finish line. As always, please don’t hesitate to reach out to me with any concerns, issues, or ideas you may have. Call my office (651-296-8436) or email me (Sen.Robert.Farnsworth@mnsenate.gov) anytime!