Tribune Editorial: Minnesota needs a budget and better business climate
Minnesota's governing trio — Gov. Tim Walz, the Democrat-majority House and the Republican-majority Senate — is officially well past the midpoint of the 2019 schedule.
Saturday is one month from the May 20 adjournment deadline. That is just 30 days.
There is a lot of work still left to be done by the Legislature and the governor.
The recent 10-day recess is ending next week, so it's time for the Legislature to return to St. Paul and get to work.
The state budget will be the primary focus when the Legislature returns.
The DFL-led House and Walz, a Democrat, have proposed a $50 billion two-year state budget. The GOP-led Senate has proposed nearly $2 billion less for the state budget.
Yes, there are a lot of funding needs across the state. Frankly, education and health and human services programs eat up a growing portion of the budget.
So the $2 billion budget proposal difference is a wide void on which to forge an agreement. It will take some negotiation and compromise to find a solution.
Legislators need to think seriously about taxation and its impact on businesses and individuals throughout the state. The state's corporate tax rate is 9.8 percent, the fourth largest in the nation, and our state's individual income tax rate is 9.85 percent, or the fifth highest in the country, according to United for Jobs data.
Many business owners and their companies are expanding in locations outside of Minnesota and about 5 percent are choosing to leave the state altogether, according to United for Growth data.
The Legislature must consider the challenge of the tax burden for Minnesota business. The high-tax climate impacts businesses, employees and our economy. Minnesota businesses compete against competitors with lower tax bases from surrounding states and around the world.
While Minnesota saw a slight improvement in the 2018 tax ranking, according to the Minnesota Chamber of Commerce, the proposed state budgets and related tax increases will severely impact the business tax climate in 2020.
The time has come for Minnesota to conform to the new federal tax code and remove the uncertainty facing our state's businesses and individuals.
The mandated paid leave proposal is an expansive and expensive mandate, which would impact businesses and their employees. The program would create and require a new state-run bureaucracy to manage the proposed paid leave policy. It would also severely impact a worker shortage that is already reaching crisis levels, especially in outstate Minnesota.
While we all agree that Minnesota needs appropriate and sustainable investment in transportation, Walz's 20-cent-per-gallon increase on the gas tax is too high. Currently, Minnesota's gas tax is 28.6 cents per gallon, which is above the national average. The proposal would raise it 20 cents in two years and then index it to inflation. That would be nearly a 30-cent increase per gallon of gasoline over the next decade, according to the Minnesota Chamber of Commerce.
The Legislature should consider other alternatives of transportation funding, such as dedicating 100 percent of sales tax on auto parts to transportation.
Gov. Walz and the Legislature have a lot of work to complete and a compressed timeline to forge an agreement. We hope they return to St. Paul Monday ready to get the job done.