Elections have consequences: What can Minnesotans expect on taxes and spending?
At last week’s election, Minnesotans handed the DFL control of the governor’s mansion, the state Senate, and state House. What fiscal measures might they get in return for this vote?
Dave Orrick provides a useful summary in the Pioneer Press:
[Senate Minority Leader Mark] Johnson on Thursday said a top Republican priority is “permanent and ongoing tax relief” — a mantra from the party during the previous two years.
There’s bipartisan support for this. Last year, Walz and leaders from both parties agreed on a plan that might have amounted to the largest tax cut in the history of the state. A cornerstone of the plan was eliminating the state income tax on Social Security benefits for higher earners. That deal, which fell apart amid election-year politicking, could still be adopted at any time.
It could be paid for — at least at first — from the state’s massive budget surplus, which is likely to be between $7 billion and $8 billion — although that could change if the economy changes significantly.
But things quickly get complicated when you start looking at taxes. Both parties want to claim victory for some measure to offset the higher costs Minnesotans are paying for necessities such as food and energy, and even Democrats haven’t rallied unanimously around one idea.
Walz, for example, said this week that he still likes the idea of sending rebate checks to all or most Minnesotans. Not all DFL lawmakers have been on board with that.
We have argued consistently in favor of tax rate cuts and against the dreadful ‘Walz Checks’ proposal. The House DFL was opposed to this latter policy in the last session, so hopefully they will hold the line on that. Let us see what form the proposed tax rate cuts take, although almost any cut would be welcome given our state’s high taxes.
Expect a pile of ideas from Democrats of all stripes on how to spend much of the budget surplus.
Many, including Walz, moderates and Republicans, will be pushing for money to hire more police officers. That was part of this year’s agreement. Both incoming GOP leaders — the Senate’s Johnson and incoming House Minority Leader Lisa Demuth, R-Cold Spring — listed public safety as a top priority, but steered clear of discussing specific proposals.
However, how much money — and in exchange for what sorts of new restrictions and oversights of police — could become a thorny issue. The most progressive elements of the DFL, including the People of Color and Indigenous Caucus, which has a presence in both chambers, has been a passionate force in calling for sweeping changes to address racial disparities in law enforcement, especially police use of force against Black men.
It sometimes seems as though, once you add up all the proposed tax cuts and spending hikes, the $7 billion to $8 billion surplus is going to have to fund about $14 billion to $16 billion worth of new commitments. With state government spending already at near record highs adjusted for both population and inflation, it isn’t clear why we would need to increase this greatly.
Minnesotans made their choice. Now we wait to see what the consequences will be.