End of the 2013 Session Wrap-up

On Monday, May 20, the Minnesota Legislature addressed the state’s budget for Fiscal Years 2014 and 2015. The tax plan to pay for it passed almost exclusively by House and Senate Democrats and includes $2.1 billion in a variety of new taxes. In total, it spends $38.3 billion, the largest in state history. This is an 8.1% increase over the current budget of $35.4 billion and reflects an increase of over $10 billion in less than a decade. I voted in opposition to this tax plan that includes an array of sales, income, and business taxes.

The following are bullet points on some of the more important bills that were taken up by the Legislature in 2013 and a link if you wish to review the actual bill;

• Taxes: $2.1 billion in new taxes paid for by everyone, not just the rich
  • https://www.revisor.mn.gov/bills/text.php?number=HF677&version=0&session=ls88&session_year=2013&session_number=0&type=ccr&format=pdf
• Health and Human Services: Spends $11 billion. Sends approximately a $167 million to Washington to help pay for Obamacare; creates almost 200 new full time government jobs, yet fails to fully fund our nursing homes.
  • https://www.revisor.mn.gov/bills/text.php?number=HF1233&version=0&session=ls88&session_year=2013&session_number=0&type=ccr&format=pdf
• K12 Education: This very important bill consumes 40% of our budget, yet provides no meaningful reform to the school funding formula. Additionally, it eliminates all high school graduation requirements and delays the law which requires teachers to prove they are qualified to teach.
  • https://www.revisor.mn.gov/bills/text.php?number=HF630&version=0&session=ls88&session_year=2013&session_number=0&type=ccr&format=pdf
• Jobs and Energy: Includes new expensive solar energy mandates and provides 26 weeks of additional unemployment benefits for certain union workers, adds almost 200 full time government employees to implement the various programs created in the bill.
  • http://wdoc.house.leg.state.mn.us/leg/LS88/HF0956.4.pdf
• Judiciary: Properly funds this third branch of government. However, it fails to fully fund local probation officers as required by law, leaving an unfunded mandate for county governments.
  • https://www.revisor.mn.gov/bills/text.php?number=SF671&version=0&session=ls88&session_year=2013&session_number=0&type=ccr&format=pdf
• Transportation: Doesn’t fully fund local roads. Rather it spends millions on light rail in the metro.
  • http://wdoc.house.leg.state.mn.us/leg/LS88/HF1444.5.pdf
• Higher Education: Includes significant funding increases to the University of Minnesota and MNSCU, a tuition freeze and the DREAM Act.
  • https://www.revisor.mn.gov/bills/text.php?number=SF1236&version=0&session=ls88&session_year=2013&session_number=0&type=ccr&format=pdf
• Anti-Bullying Bill: Proposes significant changes to our current law, including a school policy that is triggered by “perceived” harassing conduct at a cost to local school districts of $20 million annually. This bill was withdrawn at the end of session but no doubt be back next session.
  • https://www.revisor.mn.gov/bills/text.php?number=SF783&version=2&session_year=2013&session_number=0&format=pdf
• Energy Conservation Improvement Bill (CAPx / Buy the Farm): This bill includes a provision to help landowners dealing with utilities that take their land through eminent domain for a public purpose.
  • https://www.revisor.mn.gov/bills/text.php?number=SF0695&session=ls88&version=latest&session_number=0&session_year=2013&format=pdf
• Minimum Wage: Provides an increase to $7.25. Although passed by the Senate the measure failed in the last hours of the session. It’s likely this bill too will be back next session.
  • https://www.revisor.mn.gov/bills/text.php?number=SF0003&session=ls88&version=latest&session_number=0&session_year=2013&format=pdf
• Gay Marriage: This has been a very divisive issue. Same-Sex Marriage was passed and signed into law the last week of session. It effectively repeals the Defense of Marriage Act.
  • http://wdoc.house.leg.state.mn.us/leg/LS88/HF1054.2.pdf
• Day Care and Personal Care Attendant Unionization: This bill was overwhelmingly opposed by care providers who for the most part are self employed. Those who support unionization testified in committee that staying at home to care for a loved one is a career choice and therefore they are entitled to benefits, such as health insurance, vacation and higher wages. Please read my previous “News from the Capitol” on the issue for more information.
  • http://www.senate.mn/members/newsletter/1173_Newman_Scott/Daycare%20PASSAGE.pdf
  • https://www.revisor.mn.gov/bills/text.php?number=SF778&version=5&session=ls88&session_year=2013&session_number=0&format=pdf
• Health Care Exchange: The Minnesota Health Insurance Exchange was created this session as part of the larger Federal Obamacare program. This bill is a costly and frightening piece of legislation that will push free market and private insurance industry out of business in Minnesota.
  • https://www.revisor.mn.gov/bills/text.php?number=SF1&version=7&session=ls88&session_year=2013&session_number=0&format=pdf

Remember you do have enormous influence on the outcome of legislation as evidence by the change in Governor Dayton’s budget proposals. Your input caused him to withdraw his proposed gas tax increase, portions of his business to business sales tax, and the snow bird tax. If we consider that in this legislative session, your state government grew by approximately 1,400 full time employees, increased spending by over 8%, and did little to reform its business practices, it becomes very easy to understand why it is so vitally important for you to remain involved in the government process.

I want to thank all the constituents who wrote, called, emailed, and visited me during the session. Your views, opinions, experience, and expertise you shared is very important, and I’m honored to serve as your state Senator. Please stay in touch.

Respectfully,



Scott

Daycare and Personal Care Providers Unionization Bill

At 8:00am this morning, the Senate passed the Daycare Providers and Personal Care Attendants Unionization bill after 17 hours of debate. During this time, the Senate DFL was unwilling to work with the Senate GOP to create a bill that would ensure a fair process giving childcare providers and PCA the opportunity to decide whether they want to be unionized.

There are tens of thousands of eligible voters, but a mere 500 people need to sign a petition for the union to receive a list of all the contact information of daycare and PCA providers, and only 30% of all actual voters (not eligible voters) to approve the measure.

I disagree with the heavy handed way which union advocates used to push the bill through the Senate and voted against it for the reasons listed below:

• The entire concept outlined in SF 778 is preempted by federal law and the law suit that will surely follow, should it become law in MN, will overturn it.
• I philosophically disagree with the notion that private employers, which child care providers and personal attendants are, can be legally defined as state employees, which there are not, for purposes of being able to form a union to collectively bargain for more taxpayer dollars. For example, 46% of personal care attendants are folks who stay home to care for family members who are disabled. Some of these providers who favor unionization testified that they felt caring for their loved one was a career choice and as such were entitled to better wages, health care coverage, paid vacations and state pensions, all paid for with your tax dollars. I do not agree.
• If this union is formed, union dues or "fair share" will be deducted by the state from child care/Personal Care Attendant state subsidies and paid directly to the union which in turn uses the money to elect officials sympathetic to union causes. No groups, other than public unions, have a money train of this scale which can be used to influence the outcome of elections and ultimately public policy.

I encourage you to stay informed and up-to-date on this issue as the organization pushing this agenda will soon be contacting providers and sending out balloting information to create the union. I cannot stress the importance of providers becoming engaged in this process; otherwise a minority of individuals will be creating a union for the whole. If you, as a Daycare/PCA provider are opposing unionization, you MUST collaborate with your fellow providers to distribute information and get people to vote.
 

Please stay in touch.

Respectfully,

Scott

Gay Marriage Approved by the Minnesota Senate

Today, on a vote of 37 to 30 the Minnesota Senate authorized gay marriage in the state of Minnesota. The bill will now go to Governor Dayton who has promised to sign it into law.

Prior to the vote, I had received approximately 1,000 emails, urging me to vote for or against this bill. I wish to thank everyone who took the time to provide me with their views on this most divisive issue. I believe that when an elected official knows their position on a particular issue, the public has a tight to expect an honest and straight forward answer to inquiries regarding that position. With this message, I am trying to fulfill that expectation and respond to the emails I have been receiving.

I could inquire of you with a rhetorical question of “where will it stop", the question being what type of marriage will Minnesota authorize in the future? With the passage of this bill, I could point out the significant fiscal cost to the taxpayers of Minnesota or I could bring to your attention that some claim it contains “protections” from civil liability or claims with the Minnesota Department of Human Rights when in fact it will withhold public funds from any charitable organization, nonprofit or other institution that does not embrace same sex marriage. I could also tell you that I do not support this bill because it is an attack on family values by establishing a parentage presumption between same sex couples and removes statutory references to husband, father, wife and mother.

Irrespective of the above points, I voted no on this issue for a simple reason: I have a core value belief that “marriage” is a sacrosanct institution, which for numerous millennia, have been reserved exclusively for a relationship between a man and a woman.

Ultimately, this bill forever changes the makeup of a family unit, the way public schools will educate our children and exposes those who do not believe in same sex marriage with liability for failure to conform with the mandates of this newly created institution. 

Respectfully,

Scott

Minimum Wage

This week the Senate took up the minimum wage bill, which passed. This bill raises the minimum wage from $6.15 to $7.25 an hour. I did not be support this bill for the reasons listed below:

• Minimum wage was never intended to put people in a position to support a family. Minnesota spends tens of billions of dollars a year on education. People should take advantage of the educational opportunities provided by Minnesota in order to obtain a career that pays a living wage. 

• The government should not interfering with private businesses by artificially setting a minimum wage. If businesses can not afford the increase, they will inevitably pass the extra cost on to you the consumer, cut back on employee hours or in some cases actually lay off workers.

I have heard the complaint that Republicans only protect business and do not care about the workers. This could not be further from the truth. I believe that by helping businesses flourish and expand, we are helping the employees by creating a business climate that allows private businesses to expand, thereby hiring more employees and providing better wages.

Respectfully,

Scott Newman

Tax Omnibus Bill

-Everyone pays more

-How does this bill grow Minnesota’s economy?

-What are we getting for this massive tax increases?

How bad is this bill? It is so bad that the DFL majority could not pass their own bill the first time and after twisting some arms REVOTED and pass the bill. This bill raises $1,839,393,000 (1.84 billion) in new tax hikes for FY 2014-15. It would make Minnesota’s income tax the 4^th highest in the nation, behind only California, Hawaii and Oregon. This bill freezes tax relief on commercial real estate and creates a new sales tax on services and internet sales.

Minnesotans can't afford the Senate Democrat's tax plan. Everyone will pay more for clothing, auto repair, haircuts and over-the-counter medication. We should not be extracting an extra dime from hardworking taxpayers of Minnesota until the legislature goes line-by-line through our budget and cuts the waste that has been accumulating. Raising taxes penalizes small businesses and jeopardizes the welfare of people who work for those businesses.

Think about this, the DFL party is elated to be raising your taxes. Senator Rod Skoe, Senate Tax Chair, was quoted in Politics in Minnesota as saying: “When I woke up this morning, I was so excited I almost smiled,” on having his Tax Omnibus bill being heard. You can read the whole article here: http://politicsinminnesota.com/2013/04/senate-tax-bill-increases-top-income-tax-rate-to-9-4-percent/

Below are the major provisions in the bill that employers and employees alike will be facing should the DFL pass this tax bill:

• Increases sales taxes in the amount of $89 million over FY 2014-15 by expanding the sales tax base to include a new sales tax on:
  • CLOTHING, over the counter drugs, personal services (hair, nails, tattoos), other personal services (wedding planning, dating services, personal shopping), auto repair services, household goods repair and maintenance, electronic and commercial equipment repair and maintenance, warehousing and storage services, telecommunications equipment, court reporter documents, and publications (excluding newspapers).
• Increases cigarette/tobacco taxes by $333 million over FY 2014-15 largely through adopting the Governor’s $0.94 per pack additional tax on cigarettes. 
• Increases individual income taxes by $1.2 billion by increasing the current 7.85% third tier to 9.4%
  • Single: $79,730
  • Head of Household: $120,070
  • Married joint: $140,960

This is not the “Tax the Rich” mantra the Governor has been promoting, but rather a tax increase on middle income, taxpayers.

• Increases the Statewide Property Tax by $176 million largely by freezing the tax rate for Commercial-Industrial (C/I) property at the rate imposed for taxes payable in 2002. The inflator for C/I property is eliminated.
• Increases business taxes by a net $63 million in FY 2014-15 through the repeal of the Foreign Royalty Deduction. With the repeal of this deduction on business income earned outside of the state of Minnesota, why would a corporation remain or come to Minnesota? Does our tax policy affect business decisions, remember HTI?
• Creates a 13% sports memorabilia gross receipts tax ($32 million tax increase) imposed at the wholesale level on licensed professional and Collegiate Division 1 merchandise.
• Recognizes a $24 million estate tax increase by tightening current law criteria on exemptions for qualified farms and small businesses.
• Increases sales tax on rental vehicles by almost 50% from 6.2% to 9.05% raising $15 million.
• Expands sales taxes on internet sales, digital downloads and direct satellite services.

The DFL campaigned that they would only raise taxes on the “rich” and that any tax increases would only impact a few people. As you can see by the proposed tax increases above; that is not the case. The simple truth is that higher taxes do not lead to a healthier economy. Minnesota can’t afford to have thousands of small businesses, pay more in taxes rather than hire new employees, buy new equipment or otherwise expand their business.

So I ask you:

Will you and your family be better off if this bill becomes law?

Respectfully,




Scott Newman

Omnibus Bills: Health and Human Services and K12 Education

K-12 Education

Yesterday, the Senate passed the K12 Education omnibus spending bill. The repealed education standards, delayed teacher evaluations and was all paid for by a new statewide property tax, which is why I voted against the bill. Below is a partial list of why I believe this bill was not right for our students:

• This bill states, “Students are not required to achieve a specified score or level of proficiency on an assessment to graduate from high school.”
• Delays reform that requires implementation of teacher evaluations designed to assess whether teachers have the necessary basics skills needed to be successful in the classroom.
• Does not pay back the school shift despite a proposed overall spending increase of $3 billion.
• Reinstates the General Education Levy, a statewide tax on all real estate.
• Continues the disparity of urban ($14,478) vs. rural ($9,375) per pupil funding and inequity in categorical aids such as integration aid.
• State spending is going up 8%, education spending is increasing 3% but less than 1% will be going directly to students in the classroom.
• With this budget, larger class sizes and teacher layoffs are a distinct possibility.

During the debate on the Senate floor, the Republican caucus introduced numerous amendments that would have addressed the above issues. All were defeated by the majority along a straight party line vote. “Not only are your children covered until 26 under your health insurance, but they may still be living in your basement, because they didn't learn anything on the race to the bottom!” –Star Tribune

 Forty percent of our budget is contained in this bill, most of which involves new programs mandating how school districts spend their money. The Democrat’s Education Budget Bill, while increasing spending by nearly one-half billion dollars, fails students, parents, and hardworking taxpayers by lowering standards for students and teachers and adds a new statewide property tax.

 More taxes raised to pay for lower educational standards equates to the new norm; “Pay more and expect less”.

Health and Human Services

I was severely disappointed to see the Health and Human Services budget that was presented to the floor. Overall, there is $3 billion in new taxes and fees proposed this session but there has been little attention to services for seniors, nursing homes, long-term care facilities and our most vulnerable citizens. For these reasons and other listed below, I was not able to support the bill.

• Repeals a grant to Teen Challenge, a substance abuse program for kids with a 75% success rate.
• A fee on HMOs will likely raise insurance costs for small businesses.
• Appropriates additional funds for Affordable Care Act Provisions and creates 118 new government jobs.
• New and increased fees on home care license, newborn screenings and lab fees.
• Funding for IT for the Health Insurance Exchange, which is already funded by the Federal Government.
• SHIP Grants for “Community Gardens.”
• A clause that prohibits a parent from making the final decision regarding certain daycare decisions.

The Health and Human Services Omnibus Bill is a true example of misplaced priorities. Democrats are raising $3 billion in new taxes and fees to increase spending in every other budget area, including wasteful projects, and giving little priority to services for seniors, nursing homes, long-term care facilities and our most vulnerable citizens.
 

• Sculpture Bust at the Capitol: $30,000
• Ski Hill and Golf Course Event Center: $4,900,000
• Bathroom at a Boat Landing: $300,000
• Submarine Party: $200,000
• Designer Handbags and Other Person Expenses for a Department of Health Grantee: $328,993 http://kstp.com/article/stories/s2858589.shtml
• Golf Green Fees and Travel for State Council Executive Director: $20,000 http://www.auditor.leg.state.mn.us/fad/pdf/fad1101.pdf

Respectfully,    

Scott Newman

Omnibus Spending Bills

Currently in the Senate, we are considering various omnibus budget bills. Taken together, the budget for the next biennium will consist of these spending bills. Below is a list of bills that have been passed so far:

• Judiciary (SF671)
  • Bill Language Follow this link;  https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0671&ssn=0&y=2013
  • 5.3% increase over the 2014-2015 budget  
  • 8% increase to Judges’ pay which starts at $129,000
  • Does not adequately fund the State’s statutory commitment for county probation officers and is an unfunded mandate
• State Government (SF 1589)
  • Bill Language Follow this link; https://www.revisor.mn.gov/bills/bill.php?f=SF1589&b=senate&y=2013&ssn=0
  • 2.9% increase over the 2014-2015 budget 
  • Repeal of Sunset Commission which was passed and signed by the Governor 2 years ago. This repeal eliminated the only mechanism in place to reduce duplicative or unnecessary state agencies, boards and commissions.
  • Funding  numerous councils and commissions like the Black Minnesotan’s Council, Chicano Latino Affairs Council, Asian-Pacific Minnesotan’s Council, Minnesota Indian Affairs Council, MN Arts Board and the Hockey Hall of Fame.
  • Bailout of the MPLS, St. Paul and Duluth teachers’ retirement fund.
• Higher Education (SF 1236)
  • Bill Language Follow this link; https://www.revisor.mn.gov/bills/bill.php?f=SF1236&b=senate&y=2013&ssn=0
  • 10.2% increase over the 2014-2015 budget 
  • Rewarding U of M with significant additional funding despite spending $2.5M on a coach buyout and on bloated administrative costs rather than on students
  • Mandated tuition freeze rejected

When considering these omnibus bills, think about some of the wasteful spending ideas the DFL Leadership has tucked away in various omnibus bills;  

• Loan forgiveness Bailout; to the City of St Paul for the St. Paul River Center - $5,000,000. (this is in addition to a similar bailout for St Paul contained in last year’s Viking stadium bill).
• Tree Museum - $100,000
• Bus Passes for Teens - $2,500,000
• Snow Making Equipment - $3,400,000
• Minneapolis Sculpture Garden - $7,000,000
• Exotic Overseas Trips for Artists - $840,000
• Compensation for a study on how and why state employees are underpaid - $200,000

Next week I will update you on more omnibus spending bills as they continue to pass the MN Senate.  

Respectfully,

Scott

Town Hall in Hutchinson

This Saturday Representative Gruenhagen, Representative Urdahl and I will be hosting a town hall in Hutchinson at the Hutch Café on Main Street at 9:00am.

We will be discussing the current legislative session to date, the budget and bonding. I encourage you to attend to learn what is going in St. Paul and ask us any questions you might have about issues that are important to you.

Please do not hesitate contact me if you have any question, comments or concerns.

Sincerely,

Scott
 

Session Priorities

We are two-thirds of the way through the 2013 session and have not yet completed a budget. This doesn’t mean the majority hasn’t been busy legislating. Below are a few “important” bills that have been introduced by certain Senators that do not focus on the budget:  

What is the purpose of going to school for 14 years if there are no graduation or teacher competence requirements?

My question to you: Are these the type of reforms that will help you and how much are you willing to spend on them?

Respectfully,

Scott

Health Insurance Exchange: Final Version

On March 18, the Minnesota Senate passed the final version of the Minnesota Health Insurance Exchange and sent it to the governor, where it will undoubtedly be signed into law. The significant changes to the bill since my March 11, 2013 newsletter to you are as follows:

• All Republican amendments previously adopted by the Senate were stripped out.
• Prohibition for the use of taxpayer’s money to be used for abortion removed.
• The funding mechanism was changed to a tax on insurance premiums plus $20 million from the general fund.
• Complete autonomy for the board enacting laws for an additional year (until 2015)
• Creates 2 different legal appeal standards to determine eligibility and grievances, one for private citizens and the other for insurance carriers.
• Active purchaser model selected which allows the board to determine which health insurance plans will be offered.

I voted against the Health Exchange bill because, I believe this to be a costly and frightening piece of legislation. Your legislature has all but abdicated its constitutional authority to a 7 member board who will determine the type of health insurance that you will have available and do so without any controls or accountability. Once again, we are growing government by spending money we don’t have on something we don’t need and eliminating consumer control from our free market system.

Respectfully,


Scott Newman
State Senator
District 18

Governor Dayton’s Revised Budget

Governor Dayton released his revised budget proposal after failing to gain public and legislative support for his all-tax budget.

Overview

• Governor Dayton’s revised budget calls for $37.94 billion in state spending compared to his original budget plan of $37.89 billion, which is an increase of $47 million over his first proposal in January.
• The new budget is a 7.7% increase in spending from FY 2012-2013.
• It calls for $1.8 billion in new taxes, even after pulling his $2.1 billion sales tax increase due to public backlash.

Spending Items Still Included

• Fully funding all day Kindergarten for all students, $125million for Special Ed and $80million for the college and university state grant program

Dropped In Revised Budget

• $500 property tax rebate for all homeowners
• 2 year freeze on business property taxes
• Reduction of the corporate business tax rate from 9.8% to 8.4%

New Revenue and Taxes Still Included in Revised Budget

• 100% increase in local sales tax in7-county metro to pay for buses and rail
• Additional $.94 per pack tax on cigarettes
• Minnesota “Snowbird” tax is a new income tax on anyone who is not a resident but annually spends over 60 days in Minnesota.
• 9.85% fourth tier income tax ($250,000 married, $200,000 head of household, $150,000 individual)
• New sale taxes on online purchases (“Amazon” tax).

Under the Governor’s tax plan everyone will pay more. His revised plan includes an increased sales tax to the metro, new taxes on internet purchases and increasing the income tax. DFL leaders in the legislature continue to push for taxes on clothing, snack foods, digital downloads, and higher taxes on gas, alcohol and cigarettes. Please view this list of other proposed tax bills that will send more money to an already bloated government (http://www.scribd.com/doc/130364062/Senate-DFL-Tax-Increase-Proposals).

The Governor argued last week that his plan is a “balanced approach to taxes and spending” but neither of his proposals contained any genuine reforms. We should be focusing on making sure that every dollar of state taxes is being used effectively and efficiently for a government that works for the people and not an unbreakable chain of increasing bureaucracy.

Respectfully,

Scott

Health Insurance Exchange

Last Thursday, the Senate voted to pass the Democrats' insurance exchange plan as part of the Federal Affordable Care Act (Obamacare), which requires each state to set up an internet portal (known as an “exchange”) for the purpose of providing access to health insurance. Frankly, of the health exchange plans I aware of from across the country, Minnesota’s is by far the most flawed. Here are some of the reasons why this bill is a dreadful deal for my constituents:

• Growth of government; this bill grows government by roughly 100 new state employees at an expected cost of $60 million or more per year.
• The exchange will be run by a 7 member board on which the majority will rule; meaning 4 unelected people with almost complete autonomy will run the insurance industry in Minnesota.
• Board members may be removed only by a 2/3 vote of board members. Basically, this means the board can only remove themselves.
• Initially, the board has super expedited rule making authority. This power gives them complete autonomy on making laws affecting the health insurance industry with no legislative or executive branch oversight.
• In the Senate’s bill, the board will have unfettered access to the health impact fund (cigarette tax), equaling $200 million per year. Again, no legislative oversight in controlling what the board spends the money on.
• The board will have complete control over the number of and which insurance companies will be licensed to do business in the state of Minnesota. This means you could well find a monopoly of one or two companies from which to purchase health insurance.
• It is likely health care will become more expensive under the health insurance exchange. The IRS estimates the cheapest cost for a family of 4 will be $20,000 per year under the new plan.
• The exchange itself will cost approximately $332 million between 2011-2016 and will do nothing to improve health insurance or health care in Minnesota.

Throughout the legislative process, the Republican Caucus offered dozens of amendments designed to address the above problems. The DFL accepted no substantive amendments to resolve these issues. I believe this exchange effectively eliminates the business relationship between insurance agents/brokers and their costumers and substitutes in their place a new government agency. The health insurance exchange brings to mind those infamous words "I am from the government and I'm here to help you." There is no way that I can support this concept and the health exchange board will have to change significantly coming out of the conference committee before it will garner my vote.

Following is a link to the actual bill (http://tinyurl.com/a666t68). I urge you to compare the above bullet points to the actual text of the bill.

Respectfully,

 

Scott
 

February Budget Forecast

The February economic forecast came out yesterday. Below is the press release from Commissioner Jim Schowalter, which shows an improvement over previous projections. The highlight is that our projected 2014-2015 deficit is down from $1.1 billion to $627 million which means we will be able to pay back to the school shift an additional $290 million.

The increase in revenue and reduction of government spending is the reason for this budget deficit reduction and comes as a direct result of policies enacted by the legislature over the past two years. The continued economic improvement is evidence that the Republican reforms from 2011-2012 are working. If you recall, at the end of 2010 we had a staggering budget deficit of approximately $6.5 billion, but in two years we erased those deficits, filled our reserve accounts, and put our state back on the path to prosperity.

I fear that the Governor’s budget consisting of massive tax increases plus the cost of Obamacare threatens our fragile economy. Rather than requiring you to pay more for auto repairs, haircuts and over-the-counter drugs, we should continue to do what we have done for the past two years: eliminate wasteful spending, curb excessive regulation, and let you keep more of your money.

Let’s take advantage of this moderately optimistic budget forecast and not unravel the progress we made in the last legislative session.

Respectfully,

Scott

A Statement from Commissioner Jim Schowalter

The February budget forecast shows a projected budget deficit of $627 million for fiscal years 2014-15.  This is an improvement of $463 million from the November budget forecast that showed a projected deficit of $1.1 billion.

Fiscal year 2012-13 is now projected to have a positive balance of $295 million.  Current law directs $290 million to buy back the K-12 school shifts, leaving a balance of $801 million remaining.  Also under current law, the residual $5 million is put towards the state’s budget reserve bringing that balance to $649 million.

The 2016-17 structural balance improves from $263 million in the November forecast to $782 million.

Senate Judiciary Committee Gun Bill Hearings – Feb 21 and 22

As an avid sportsman and sworn protector of our constitutional rights, I will not vote to infringe on our 2nd amendment rights.  I believe that the second amendment, as one of the most important rights in our country, guarantees our personal freedom.  If any anti-Second Amendment legislation advances, I will voice my opposition. 

We have a strong history of supporting Second Amendment rights here in Minnesota.  Most gun owners are law abiding citizens using their firearms for hunting, sport, or personal protection. No law will end gun violence but we can attempt to address the underlying shortfalls we have in our society. 

            There are currently over 30,000 gun control laws on the books nationwide and I don’t believe that more laws will protect us from criminals or those suffering from mental illness. The issue is not gun control but rather our lack of properly dealing with mental illness in this country. We need to start addressing mental health issues in the same way we have dealt with diabetes, heart disease and cancer. In addition we must give school employees, social workers and law enforcement the tools and ability to better communicate with each once they suspect potential trouble. Sufficiently addressing the mental health issues and training the public are the true steps we need to take to make our country a safer place to live.

If you wish to follow this issue, the following link will take you to the Senate website (https://www.revisor.mn.gov/bills/status_search.php?body=Senate). The specific bills to search are:

SF 23: Repeat Juvenile or Crime Violence Offenders, Ammunition, Aiding and Abetting Illegal Purchases

SF 458: Transfer of Firearms and Eligibility Criteria to Posses Firearms

SF 69: Permit to Carry Law Exemption for Retired Peace Officers

SF 503: Falsely Reporting Thefts or Losses of Firearms, Transfers to Ineligible Persons

SF 557: Firearm Permits, Mental Health Screening

SF 520: Voluntary Surrender of Firearms, Centralized Registry

SF 400: Firearm Protection Act

SF 413: Modification of the Judicial Process for Restoring Firearms Eligibility to Felons

SF 568: Modification of the Judicial Processes for Restoring Firearm Eligibility and Challenging a Permit to                       Carry Denial

SF 205: Firearms Transfers and Possession Eligibility, Criminal Penalty Provisions

SF 339: Resolution memorializing the President and Congress to Respect the Second Amendment

SF 635: Constitutional Amendment for Citizens to Keep, Bear and Use Arms

Respectfully,

Scott

Governor Dayton’s State of the State Address
 

Below is a link to Governor Dayton’s State of the State address as delivered last night.

If you are a business owner, read it.
If you work in the private sector, read it.
If you pay taxes, read it.
If you receive benefits from the state, read it.

http://mn.gov/governor/newsroom/pressreleasedetail.jsp?id=102-54689

I would like to hear from you and what you think of supporting his $2 billion budget and tax increase.

Are his arguments valid or partisan?
Are his figures correct or spun?
Does he have spending cuts to accompany the tax increase?
Is growth of government and increased taxes helping you and your family?
Is Governor Dayton’s version for the future in the best interest in the state of Minnesota?

Respectfully,

Scott

Governor Dayton’s Budget Proposal: Higher Education

A significant increase is proposed for public higher education campuses and for financial aid (which affects public and private students). Whereas the overall state spending is going up by 7.6 percent, the higher education budget the Governor would like is an increase of 9.6%. Below are a few of the budget highlights:

• Calls for $250 million in additional spending
• UMN spending is temporarily being held until further review of administrative spending is completed
• MNSCU spending to be increased by $80 million
  • $46 million would be used to improve employment of graduates
  • $34 million to “retain faculty and staff”
• Increased spending to the Office of Higher Education by approximately $90 million (roughly 24%)
  • Most of the new money would be used to fund numerous and generous state grants
    • Grants would be extended to undocumented residents like the federal bill called “The Dream Act”

I support the suspension of increasing the funding to the UMN when just recently the University was nationally criticized for their extravagant administrative costs (read article here: http://online.wsj.com/article/SB10001424127887323316804578161490716042814.html). I also question the increased spending on grants that will be extended to undocumented residents when our current resident students are facing a hard time receiving funding and paying for the astronomically high price of tuition.

Respectfully,



Scott

Governor Dayton’s Budget Proposal: Snowbird Tax and “Corporate Loopholes”

In the Governor’s recent budget he proposed two major changes that look small, but will be cause of great concern.

 “Snowbird Tax”
This tax would be applied for non-Minnesota residents who remain in the state for 60 days or more in a calendar year. This tax would directly apply to retirees and vacationers who own a home in the state, but choose to live here during the summer months. The Wall Street Journal highlighted this excessive taxation in a recent article, which you can read here: http://online.wsj.com/article_email/SB10001424127887324329204578271720286958796-lMyQjAxMTAzMDAwMTEwNDEyWj.html#printMode. 

3 obvious areas of concern:

• Administrative costs
  • Adding new administrators (cost and growth of government) to collect and audit funds
• Hassel factor
  • How do you track a person’s days in state: Airline tickets? Gas receipts? GPS?
• Hurt vacation industry
  • Invitation to avoid Minnesota for the hassle of counting days within the state. Additionally, people would be spending less time and money here or risk going over the 60 day stay limitation and get taxed.

Foreign Operating Tax: “Corporate Loopholes”

Governor Dayton’s proposal includes taxing Minnesota corporations on the money that they earn outside of the state of Minnesota. His proposal suggests that the income currently made by a corporation outside of Minnesota is a “loophole” that corporations are using to subvert income taxes owed to Minnesota. This change will negatively affect numerous companies in Minnesota. HTI owns manufacturing plants in other states and internationally. Under Governor Dayton’s plan they would be required to pay income tax on their gross earnings regardless of where the plants are located.

At a time when other states are reducing individual and corporate income taxes in order to attract their business, Governor Dayton’s plan is an invitation to leave Minnesota.  You can read some of the tax reforms other states are doing here: http://online.wsj.com/article/SB10001424127887323968304578245720280333676.html.
 

Please contact me if you have any questions, concerns or suggestions.

Respectfully,

Scott

Governor Dayton’s Budget Proposal: K12 Education

It was a disappointment to read Governor Dayton’s budget and find that the major issues facing the state education system were not addressed. As rural legislator it’s frustrating to see the funding inequality to our schools due to location (rural vs urban and suburban). The Governor was quick to highlight the additional funding under his plan, but neglected to pay off the existing debt or make any meaningful improvements. Below are a few highlights of the Governor’s plan. Note the absence of any real reform.   

• Increases E-12 education by $344 million
  • $118 million General Education Money
    • Does not offer a reform of the per student formula
    • Increases the equalization disparity between outstate and metro schools 
  • $124 million Special Education
    • Cuts the gifted and talented programs
    • Special Education program already exceeds the Federal standards
  • $9 million Limited English Proficiency

• Does not pay any portion of the $1.1 billion owed to schools in the shift
• $500,000 to establish a “School Climate Center” which will be used to address safety and bullying issues.
  • We already have a Health and Safety program but currently it can only be used for issues like air quality rather than the physical safety of our children.
• School trust fund
  • No reform to the state trust fund program, which had been mismanaged for years by the DNR. Expediting permitting for mining in Northeast Minnesota could produce significant sums for out-state schools

Providing the best education is a constitutional requirement in Minnesota. The Governor’s proposed plan does not offer that to our students.

Please contact me if you have any questions, concerns or suggestions.

Respectfully,

Scott

Governor Dayton’s Budget Proposal: Taxes

The Governor claims that his budget contains significant tax reforms. Unfortunately, it is largely a tax plan consisting of higher taxes and increased spending. His plan does offer a reduced sales tax rate, but at the expense of a broad tax expansion on clothing and services. Additionally, his homeowners’ property tax rebate does little in the way of reforming a complicated and burdensome property tax system that does not help renters or commercial business owners. Below are a few highlights of the Governor’s new tax plan under his 2014-2015 budget plan:

• $2.1 BILLION of NEW sales taxes, including
  • Clothing over $100 per item (coats, shoes)
  • Admissions and memberships (health clubs, YMCA)
  • Over the counter drugs (Advil)
  • Personal care services and instructions (haircuts)
  • Legal accounting (tax services, family will)
  • Auto services (oil changes, auto tune ups)
  • Online purchase (Amazon, Ebay, iTunes)
  • See comprehensive list here: http://www.minnpost.com/political-agenda/2013/01/taxed-or-not-heres-list-items-and-out-daytons-sales-tax-plan
• Income Tax Changes
  • 2% income increase on:
    • $250,000 married, $200,000 Head of Household, $150,000 individual
    • Would make MN the 4^th highest income tax state in the nation
    • “Snowbird tax” – would extend income tax to part-year residents who maintain a house in Minnesota for at least 6 months
    • No reform
• Real Estate Tax
  • $500 tax rebate for FY 2014-2015 to all Minnesota homesteads
    • Zero rebate for renters
    • Zero Rebate for commercial or recreational real estate
    • No reform on homestead, commercial and recreational real estate taxes
• Other Significant Tax Changes
  • Temporary suspension of automatic annual increase on commercial statewide property tax (real estate), no reform on underlining tax
  • $.94 per pack additional tax on cigarettes
  • Significant increase LGA funding for St. Paul, Minneapolis and Duluth

I would support a reform of our current tax system; in fact I believe it is much needed. However, I believe that we should focus on reducing our overall tax burden, not simply increase it by over $2 billion and call it reform.

Respectfully,

Scott

Governor Dayton’s Budget Proposal

Governor Mark Dayton unveiled his 2014-2015 proposed budget this past Tuesday. The budget of $37.9 billion is roughly an 8% increase from the previous budget. His proposed budget calls for a tax increase of $3.7 billion, but little in the way of spending cuts or tax reform and no reduction in the size or growth of government.  For every $1 in spending reductions, the Governor raises $16 in new taxes. Below are a few highlights of the Governor’s proposed budget:

• Increased budget from $35.2 billion to $37.9 billion
• $3.7 billion of new taxes and only $225 million in cuts
• Largest budget increase ever proposed by a Minnesota Governor
• 2 year freeze on tax rebate for all homeowners
• $80 million increase in LGA
• $2.1 billion of NEW sales taxes on goods and consumer services
• $.94 per pack additional tax on cigarettes
• 2% increase income taxes for married  $250,000; HoH  $200,000; and individual  $150,000
• Increased income tax to Minnesota’s “snowbirds” through a prorate income tax base on the number of days they are present in the state
• .25% transit tax to 7-county metro area to go towards buses and rail
• New taxes on online purchases (“Amazon” tax) and digital downloads
• Fails to pay back the $1.1 billion school shift, pushing the pay off date to the 2015-2016 budget

On average, this budget would collect over $389 more sales tax from every Minnesotan. The tax increases proposed will primarily impact the middle class, already stretching their budgets to make ends meet. In the following weeks, I will send further break downs, examining the different areas of the budget that will be impacted like education, business, transportation and real estate taxes.

 It is important to note that this is not the final budget, but an outline for potential legislation that we should expect to see this session.

Respectfully,

Scott

RE: Redefining Marriage

Over the past two weeks, I have received numerous of emails from concerned constituents requesting that I do not support any bill to redefine marriage in Minnesota.  I believe they are in response to an email sent out by Minnesota for Marriage. Below is my position on the issue of Marriage in Minnesota:

• I do not believe that the Marriage Amendment’s defeat was a mandate to legalize same sex marriage in Minnesota.
• Under state law, Defense of Marriage Act (DOMA), Minnesota continues to recognize only a marriage between one man and one woman.
• I have not supported nor will I support the repeal of DOMA or any bill that may be introduced to legalize marriage between same sex couples.

I believe that when an elected official knows their position on a particular issue, the public has a right to expect an honest and straight forward answer to inquiries regarding that position. With this message, I am trying to fulfill that expectation and respond to the emails I have been receiving.  

Respectfully,

Scott

RE: Beginning of the 2013 Session

Today marks the start of the 2013 Legislative Session. I intend to send out a weekly update as I have the past two sessions. You can look for them to arrive early of each week. I encourage you to with any questions you may have.

This past election cycle brought a change of leadership in both the House and the Senate. Because of this, my committee responsibilities have changed. I will now be serving on the Finance Committee, Sub-Committee on Elections, Capitol Investment and Rules and Administration Committee.

As we move forward into this new legislative year, I hope that the new majority party will honor their opening day remarks. As related by our new Majority Leader Senator Bakk: “We’re going to have our differences, but as I think back [on] the spirit of our debates, [they] should always be aimed at finding solutions and common ground, not gridlock…challenges today represents the start of our opportunity to confront these challenges and build a better future for Minnesota.”

I look forward to working with all the new members in the Senate to work for a more prosperous Minnesota.
 

Respectfully;
 

Scott