New budget will jumpstart the economy and support taxpayers
The last year and a half has been incredibly challenging for many Minnesotans. The governor’s response to Covid-19 included blanket closures of small businesses and forced thousands of workers onto the unemployment line through no fault of their own. Yet, strangely Gov. Walz and House Democrats spent most of session demanding more than $1 billion in tax increases from working Minnesotans. It didn’t make any sense — why in the world would we ask Minnesotans to pay more of their hard-earned money when many of them were still struggling to get by? For me, it was a nonstarter.
It also doesn’t make sense for Gov. Walz and House Democrats to ask for tax increases given our status as one of the highest taxed states in the country. Minnesota is the 7th highest in state and local individual income tax collections per capita. We currently have the 5th highest income tax bracket; under the House Democrats’ proposal, we’d be second behind only California. In fact, our LOWEST income tax bracket is higher than the HIGHEST tax bracket in 15 states. We should be working to reduce Minnesotans’ tax burden, not increase it.
The feds provided a couple of different forms of assistance for people affected by Gov. Walz’s business closures. Businesses received Paycheck Protection Program loans that would be forgivable if employees were kept on staff and other conditions were met. Workers forced onto the unemployment lines were eligible for supplemental unemployment insurance to help make ends meet.
The federal government exempted this aid from taxes, but both would have been subject to Minnesota taxes without action from the legislature and Gov. Walz. Republicans quickly passed a bill to spare Minnesotans from taxes on this aid. But Democrats in the House and Gov. Walz resisted. It was only in the final hours of session that we were able to convince them of how important this issue is.
Tax relief on those Paycheck Protection Program loans and pandemic unemployment insurance payments were the two marquee items in the nearly-$1 billion tax bill we passed during special session. It’s great news — the idea that people might have had to pay taxes on this emergency assistance was just ridiculous.
The tax bill includes several provisions to help the state’s job creators and businesses invest and grow. Main street businesses will see lower property taxes as a result of this bill through the lowering of the statewide property tax levy, and we end a budgeting gimmick that forces businesses to pay sales tax payments for the month of July in June. These provisions will help businesses increase capital to reinvest in their companies and employees.
The bill includes a provision I carried that re-establishes the sales tax exemption for collegiate preferred seating. This provision provides a sales tax exemption for the right to purchase collegiate athletics season tickets. The amount paid for the right to purchase those tickets will be used to support student scholarships, wellness, and academic costs.
The tax bill also establishes a working group to make recommendations on the disbursement of $250 million as a direct cash benefit to frontline workers. These Covid relief funds can be used to support workers who were at risk as they continued to work during the pandemic.
Finally, we’ve got to get people back to work. I’ve spoken to a lot of business owners who are struggling to find workers to fill their open positions, and workers are even turning down jobs because they are getting so much supplemental unemployment. Paying people to stay home when they otherwise could be working is not the key to a strong economy. I hear about this almost everywhere I go. We’ve got to get people back on the job.
Everything we do should be focused on putting more money back in folks’ pockets and jumpstarting our economy. That is exactly what this tax bill does, and Minnesotans should be thrilled with the result.
If you have any questions about these provisions or any other issue the legislature is working on, feel free to contact me any time at sen.john.jasinski@senate.mn or 651-296-0284. It is a privilege to serve you!