This 2013 legislative session is in full gear and I’ve been working on several pieces of legislation as well as hearing the details of Governor Dayton’s budget and the new health insurance exchange.
House File 67 is a bill I introduced to help small businesses comply with state tax laws without a huge hit to their bottom line. To maintain tax records, track how much they owe and pay taxes, small businesses use a large amount of labor hours which leads to lost productivity. This bill would provide a tax credit for the time spent complying with tax code.
I’m also excited to report that HF 71, which would require Minnesota to conform to the new federal estate tax exemption laws, will be heard in the House Taxes Committee on Feb. 5.
As you may know, I have worked hard with the Military Action Group (MAG) to push for tax reform relating to retired veterans.
Minnesota is currently only one of six states nationwide that still tax the retirement pay for the military. This legislation aims to attract more retiring vets to the state, ultimately bringing in millions in economic activity and a new wave of talent for hiring employers to take advantage of. This bill has bipartisan support in the House and Senate. Wisconsin and other neighboring states have made military retirement pay tax-exempt for several years and have seen a financial gain to their tax base as a result.
Committees Get to Work on Dayton's Budget
This week, the Minnesota House Taxes and Ways and Means committees began scrutinizing Governor Mark Dayton’s budget proposal and determining what it means for Minnesotans.
I sit on the Ways & Means Committee and have several concerns with the plan as it currently exists. It would increase state spending by $2.5 billion and increase taxes on Minnesotans by nearly $3.7 billion, which I believe will negatively impact the working poor and the middle-class through a sales tax expansion on goods and services.
You may have read the recent Wall Street Journal article on what states are doing to become more competitive and bring in more revenue. It cites Minnesota as a poor example, going as far as calling us the “Land of 10,000 Taxes” because of Dayon’s proposal (particularly his “Snowbird” tax).
We must take a balanced approach to the budget like House Republicans did in 2011, streamlining government operations and limiting new taxes we take from our private sector.
We have seen in recent months that strong economic growth improves the budget situation. What was once a projected $4 billion deficit for years 2014-2015 is now expected to be around $1 billion because the state’s economy has grown.
While Governor Dayton proposes not paying back MN schools for money borrowed from them until 2017, I feel paying back this entire shift should be a priority this session and hope to have the support of my colleagues in the coming weeks.
Health Insurance Exchange
As part of the Affordable Care Act, the Legislature is setting up a state health insurance exchange in Minnesota. While many of our neighboring states have elected to participate in the federal health exchange instead, our legislature has begun the process of constructing this marketplace for health coverage.
Some of the highlights include:
- A 3.5% user fee that will be applied to all health plans to pay for the exchange
- Oversight and contract approval by the MN Dept. of Commerce (deciding which health plans will be allowed into the exchange.
- Many public assistance programs will ultimately be merged into this exchange
I am concerned the exchange will raise the cost of insurance for many Minnesotans because of the processing fee it will add to existing plans.
I also have many questions about the new board which will oversee the exchange, how they are appointed and the power they will have.
You can check out the new website for the exchange at http://www.mn.gov/hix/ and I look forward to hearing your comments about this topic.