As DFL lawmakers continue to tick items off their political to-do list, forgive Minnesota taxpayers for clutching their wallets a little tighter.
The 2023 session of the Legislature may be shaping up to be historic for partisan DFL priorities, but it’s already a frightening, costly, and perhaps even disastrous one for all of us who’ll be made to pay for free spending and the resulting bulging state government via higher taxes, steeper fees, and more.
“It’s crazy, really. I thought they’d hike spending and cut taxes. Instead, they’ve hiked both,” John Phelan of St. Paul, an economist at the Center of the American Experiment, a public-policy think tank, told the Duluth News Tribune Opinion page Friday.
“Concerned? Yes. Research shows that these policies will slow economic growth ,” Phelan said. “And push people out of the state. … We're just supersizing the very policies Americans are fleeing from.”
Taxes play a big role in where people choose to live, and in Minnesota, a highest-in-30-years 13,000-plus residents bolted for other states in 2020-’21, Census figures show. Their top landing spot was Florida, which has plenty of warm sun and no income tax.
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Minnesota, on the other hand, has the fifth-highest income tax in the nation at 9.85%, and soon, with expected DFL-led legislating this session, could have a higher top tier of income tax at 12.5%, an increased capital gains tax (leaving Minnesota with the highest such tax rate in the nation, according to the Minnesota Chamber of Commerce), and even a new 40-cent tax on pizza deliveries and other retail deliveries like Amazon and Uber Eats. Is there nothing Minnesota won’t tax?
How many left in our state will say enough is enough once lawmakers finish their work?
Work that, so far, has included a state Senate proposal to provide a free college education for students attending state colleges and universities at a cost of $315 million every year, a budget proposal from Gov. Tim Walz that would increase state spending by 25% or more, and a proposal also from the governor to raise by as much as 60% the fee (a tax really) for vehicle tabs , to as much as 160% of your car’s value.
Walz additionally has proposed a new 0.7% payroll tax on all employers and employees in the state — a new $1 billion tax — to pay for a $40 million state-run program to guarantee paid time off to Minnesota workers. That's even though 80% of employers in the state already provide the benefit, according to the Minnesota Chamber. And most of the workers in the state not receiving it are part-time, seasonal, temporary, or in another position that historically hasn't received such a benefit and shouldn't expect to. Worse, if the $1 billion isn't enough to run the program, the state can raise the tax. There's no cap in the governor's proposal, according to a fact sheet from United for Jobs. Other states with such programs exempt small businesses and seasonal workers, both of which are plentiful in (northern Minnesota). The governor’s proposal does neither.
An entirely new department in state government to run an expensive sick-and-safe-time benefit may not be the only new department added after this session, either, each an expensive permanent expansion of government. The Minnesota House last week passed a measure to create an Office of Missing and Murdered Black Women and Girls. The need to address the issue was made clear by a state report that found Black women are nearly three times more likely to be murdered than white women here. But is Minnesota ready to be the first state in the country to financially commit, year after year, to a full office devoted to the very real challenge? Perhaps, but will the question get the thorough debate it deserves with one party in complete control?
The debate already seems over on taxing the Social Security checks of Minnesotans on fixed incomes. Look for it to continue, even though Minnesota is one of only 11 states with the heartless tax that burdens 473,000 Minnesota filers to the tune of $1,276 each per tax cycle, according to a Department of Revenue estimate.
There haven’t been nearly enough conversations in St. Paul about tax cuts, especially for the middle class; about returning some of the state’s record $17.6 billion surplus — surplus! — to taxpayers; or other ways to ease the bottom-line burden of everyday Minnesotans.
Instead, we’re facing, in addition to all of the above, electric bills expected to go up an average of $1,600 every year through 2050 as a result of the state’s aggressive goal of going 100% carbon-free.
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It's hard not to be as exasperated as the Minnesota Chamber’s Laura Bordelon, who said in a statement in January, “Minnesota is experiencing a record near-$18 billion surplus. Now is the time to make Minnesota more competitive and invest in our economic future by lowering taxes and preventing costly mandates — not proposing a 26% increase in government spending and top-in-the-nation taxes, including $1 billion in new payroll taxes, a metro sales area tax increase, a cannabis tax, and the highest capital gains tax in the nation."
But those “nots” are precisely what are being proposed and pushed in tax-happy and spend-happier 2023 St. Paul. Hold onto your wallets, Minnesotans.
This Minnesota Opinion editorial is the viewpoint of the Duluth News Tribune Editorial Board. Send feedback to: opinion@wctrib.com.
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