Our view: DFL, labor win; leave businesses to pay tabWith a full day to digest and decompress, winners and losers from this year’s session of the Minnesota Legislature are becoming clearer.
With a full day to digest and decompress, winners and losers from this year’s session of the Minnesota Legislature are becoming clearer.
The biggest winners, of course, are the DFLers. They were in charge and took full advantage by pushing through an aggressive social agenda, including gay marriage, and by passing measures sure to please their biggest supporters, specifically, the state’s public labor unions.
Delegated as losers are those the DFL decided should pay the bulk of $2.1 billion in tax increases, specifically Minnesotans earning $150,000 or more a year and as many as 20,000 small-business owners who run their income through personal income-tax returns.
“It was the most anti-jobs Legislature I’ve ever seen,” Charlie Weaver, executive director of the Minnesota Business Partnership, told the
Minneapolis-St. Paul Business Journal. “Clearly, Minnesota just became a less attractive place to grow and attract jobs as a result of this session.”
This year’s Legislature left Minnesota with the fourth-highest state income tax rate at 9.85 percent, a 25-percent increase over the existing 7.85 percent. Expect Minnesota to struggle to compete on a global, or even regional, level. So list Minnesota’s business climate as a “loser” of the legislative session that came to a close late Monday.
Some other winners and losers include:
Winner: The state’s bottom line. The budget passed by DFL Gov. Mark Dayton and the DFL-controlled Legislature does wipe out a $627 million deficit.
Winner: Education. The budget includes $485 million for schools, or $158 more per pupil in the funding formula. There’s money to pay for all-day kindergarten and $40 million for early-childhood scholarships. The budget also included $250 million in new money for colleges and universities, enough to freeze tuition for two years.
Winner: Immigrant students living in the country illegally. The Legislature made them eligible to receive in-state tuition and financial aid if they graduated from a Minnesota high school after attending for at least three years.
Winner: Health-care reform. The Legislature created an online health-insurance exchange to serve as a marketplace for buying coverage.
Losers: Those who’ll pay to implement federal health-care reform. In addition to costs at the local level (St. Louis County expects to spend $1.5 million next year alone to hire 17 new employees and to buy equipment to handle the many Minnesotans who become eligible for coverage), the state had to create a new agency with nearly 100 full-time employees at a cost of $60 million. According to the state chamber, a tax on small businesses and on individual health-care premiums is paying for it.
Losers: Smokers. The Legislature more than doubled the state tax on cigarettes, from $1.23 per pack to $2.83.
Losers: Those who clamored for reasonable gun-control laws and wider background checks in the wake of the Sandy Hook tragedy. Despite a deluge of debate early in the session, no major changes emerged.
Losers: Businesses. In addition to the income tax hit, the Legislature passed $400 million in new or increased corporate taxes and a business-to-business sales tax on some services.
Winners: Businesses. They did score at least one victory: a sales tax exemption on capital equipment purchases.
Losers: Online shoppers. Online retailers will be required to start collecting sales tax on online purchases.
Winners: Cities and counties. Local governments will be exempt from state sales taxes and will receive $130 million more in state aid over the next two years.
Winners: Beer drinkers. The Legislature considered, but
didn’t pass, a huge tax increase on alcohol, including a $4 tax increase on a case of beer.
Losers: Kids who get bullied. An anti-bullying law to strengthen reporting requirements and training died.
Lawmakers’ pocketbooks: Citing a concern that strong candidates aren’t running due to low pay, the Senate attempted to increase lawmakers’ salaries from $31,140 a year to $40,890 by 2015. The full Legislature rejected the idea, opting instead to put a constitutional amendment on the 2016 ballot, asking whether an outside council should decide lawmakers’ pay. And who’s the winner and loser in that?
Winners: Retiring Duluth teachers and others with public pensions. Lawmakers approved $15.5 million in annual general state aid for police and fire pensions and $13 million for St. Paul and Duluth teacher pensions, according to the St. Paul Pioneer Press. The Legislature also improved the financial health of pension plans for judges, police officers, firefighters and state public safety workers.
After the DFL, the biggest winners in the 2013 session have to be public unions. The Legislature delivered to AFSCME and SEIU thousands of potential new dues-paying members with the ability to organize private child-care providers and home-care workers. Minneapolis’ Star Tribune called it “overreaching legislation” and “the collection of a campaign IOU by labor interests who worked on the party’s behalf in 2012.”