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Capitol View®
Mike Mulcahy

Daily Digest: Taxes, wages, climate

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Good morning, and happy Thursday. Here's the Digest.

1. Senate puts tax cut on the table. A tax plan released Wednesday by Republicans who control the Minnesota Senate not only avoids tax increases but provides tax cuts totaling $800 million, according to Sen. Roger Chamberlain, a Republican from Lino Lakes, who chairs the taxes committee. “A hundred percent of Minnesota taxpayers will see relief, and that is what state needs at this moment in time.” The Senate bill reduces the second-tier income tax rate by a quarter of 1 percent.  It would be the first income tax rate cut in nearly two decades. There are also tax breaks for business owners, investors, charitable gaming organizations, farmers and senior citizens. Chamberlain said the money for tax cuts comes from several adjustments to the state tax code to align with recent federal changes. “A variety of things that we do puts $800 million into the pot for us to use for tax relief for Minnesotans.” The Senate bill, unlike the House DFL plan, does not attempt to capture the foreign profits of corporations. The House bill would raise $1.2 billion in new revenue, largely from big business. Another key difference is the Senate includes a provision opposed by most Democrats to allow tax breaks for Minnesotan who donate to private school scholarships. Senate Majority Leader Paul Gazelka said the provision is small but important to Republicans. The Senate is expected to vote on the tax bill next week. The House has a vote scheduled Thursday for its tax bill. They'll have to work out their differences soon if they want to end the session by the May 20 deadline. (MPR News)

2. Walz tax plan hits low income earners hardest. Gov. Tim Walz’s plan to increase taxes would hit the lowest-income Minnesotans the hardest, according to a new analysis by his own Department of Revenue. Minnesotans on the bottom half of the income ladder would absorb an average 9.9% tax increase. For every $100 they earn, these Minnesotans would pay well more than an extra dollar in taxes. The poorest 10% of Minnesotans would pay an extra $2.37 in taxes for every $100 they earn. The upper half of Minnesotans would pay an additional 5.9%, although the wealthy would wind up paying far more in actual dollars than lower-income Minnesotans. The overall state and local tax burden would rise from 11.63% of income to 12.39%, or about 75 cents for every $100 earned, or $750 on $100,000 in income. The new analysis arrives at an inopportune time for both Walz and Minnesota House Democrats, who are amid 10 days of passing major budget increases for schools, roads and health care — paid for by tax proposals similar to the Walz plan. (Star Tribune)

3. City-ordered minimum wages could complicate budget talks. The $15-an-hour minimum wage ordinances in Minneapolis and St. Paul are emerging as a probable sticking point at the state Capitol because those and other city-imposed workplace rules will be part of the Legislature’s end-of-session bargaining. Minneapolis passed its ordinance almost two years ago for an eventual $15 minimum wage. St. Paul followed last November. The battle has been playing out in the courts ever since. Opponents of the Minneapolis standard recently asked for state Supreme Court review of a March defeat in the Court of Appeals. If justices decide in coming weeks to take the case, there’s little chance they’d render their verdict before the Legislature goes home for the year. In the meantime, Republicans in the Legislature are trying to erect a new roadblock. “We think it’s a mistake to have a patchwork of bills across the state,” said Senate Majority Leader Paul Gazelka. “Lots of small businesses have more than one location. It’s hard to navigate different sets of rules all across the state.” Gazelka, R-Nisswa, said his caucus plans to fight hard to prevent cities from adopting minimum wages higher than the state standard. And for those that have done so already, the measure wouldn’t allow them to enforce or administer the ordinances. The preemption also covers ordinances imposing time off or shift-scheduling regulations on employers. The provision is part of a broad Senate budget bill set for a vote next week, meaning it will likely make it to final negotiations in May. The Democratic-led House took a position Wednesday against an almost identical plan when House Republicans unsuccessfully tried to put it into a budget bill. (MPR News)

4. House votes on whether humans are changing climate. Minnesota House members revealed Wednesday whether they believe humans are causing climate change. It broke largely along party lines: 79 lawmakers, including all 75 Democrats, voted yes, and 50 Republicans voted no. Five Republicans did not vote. They voted on this sentence: “The legislature finds and declares that greenhouse gas emissions resulting from human activities are a key cause of climate change.” That was all it was. No money, no regulations. State Rep. Frank Hornstein, DFL-Minneapolis, proposed adding the declaration to a much larger bill covering jobs, economic development, energy, climate and telecommunications policy and finance. Several Republicans spoke against the vote — and the notion of human-caused climate change. “Human activities are not the cause of climate change,” said state Rep. Eric Lucero, R-Dayton, in a speech on the House floor. He repeated the sentence at least twice and continued, implying, apparently, that because the earth has been both colder and hotter in the past, climate science is flawed. “We were at one point in an ice age,” he said, adding later, “This is fake.” (Pioneer Press)

5. Anger over signs leads to proposed budget cut. Fort Snelling sits at the confluence of the Mississippi and Minnesota rivers, which the Dakota people called “Bdote.” But visitor signs at the fort using the word “Bdote” have some lawmakers upset. “I do not agree with what the [Minnesota Historical Society] is engaged in doing, and I believe it to be revisionist history,” said Sen. Scott Newman, R-Hutchinson. Newman and other Republican Senators say the historical society is attempting to change the history of the fort, which cannot be changed to fit modern or politically-correct interpretations. “Whether our history is good or it is bad, we should know what it is because it will guide us in the future,” Newman said. The Senate Finance Committee is using the history snit to cut the historical society’s budget by $4 million a year — an 18 percent cut that could mean 80 layoffs and the closure of popular sites. Democrats say it reeks of retribution. “So, why do we take what is a gem of this state and just turn it upside down?” said Sen. Richard Cohen, DFL-St. Paul. (WCCO-TV)