The Minnesota Chamber of Commerce gave the just-completed legislative session a mostly thumbs-up.
It included some business and individual-payer tax relief, a big transportation bill and a further streamlining of environmental reviews.
The chamber failed to turn back the effort by the cities of Minneapolis and St. Paul to establish higher minimum wages and leave policies.
There is plenty for business and other interests to like and dislike in a $46 billion, two-year budget that touches every Minnesotan.
The chamber is Minnesota’s largest business lobby. Its members are effective, grass-roots lobbyists in every legislative district. However, business, like the public, is not monolithic. And the interests of an iron mining outfit are different from a marketing agency in the North Loop. And the Minneapolis and St. Paul-area chambers don’t always track with the state chamber.
Here’s some significant stuff from an eventful session that left few completely satisfied. That’s democracy.
The Republican majority delivered the biggest tax relief bill since 2001, and more than Gov. Mark Dayton wanted. It includes:
• Exempting the first $100,000 of a commercial property’s market value from the much-despised statewide commercial property tax and eliminating the automatic annual inflater.
• Increasing the research and development tax credit to 4 percent.
• Increasing from $2 million to $3 million by 2020 the amount exempt from Minnesota estate taxes. Proponents say it will help keep more wealthy Minnesotans from retiring to low-tax sunshine states. Backers failed to reach full conformance with the federal exemption of $5.5 million. The new law also will no longer consider the use of Minnesota accountants, financial advisers and other professionals in determining whether a taxpayer is a Minnesota resident.
The state uses about a dozen determinants, including that a taxpayer spends at least six months annually in Minnesota, to determine if somebody is a resident of Florida or Texas or Minnesota at tax time. The good news is that Minnesota’s economy and the 2009-2016 stock market run have produced a lot more wealth and millionaires since the Great Recession, many of whom have expanded their state operations, hired people and given back to their communities and charities. The residency debate is not going away soon.
The huge transportation package, the largest since 2008, was completed without any increase in gas taxes, which should be the appropriate user tax to cover at least some of the increased spending. Instead the bill includes $934 million in bonding and hundreds of millions in other improvements to be funded out of the general fund. For example, the existing tax on sale of auto parts and rental vehicles that used to go to the general fund, as did the sales tax on other goods and services, will now amount to $2 billion over 10 years that will go to roads and bridges.
Meanwhile, the chamber and the state say that a concerted, collaborative effort has resulted in MnDOT savings of about $230 million in its construction program, an amount equivalent to a 2 percent bump in the gas tax. That is to be commended.
Also, the legislature approved $70 million to address the deficit at Metro Transit, but will not fund further light-rail transit (LRT) work. Instead the Twin Cities-area counties were freed to slightly increase local sales taxes to fund that and other transit projects.
Rural and some exurban legislators generally don’t like investing in Twin Cities-area transit, while the business chambers do. The metro area pays for most of the state highway spending. However, Twin Cities legislators weren’t going to win the transit fight this session.
Lawmakers propped up Minnesota’s small but struggling individual insurance market of fewer than 190,000 customers. State money included $542 million to help health insurance companies cover high claims and $326 million in premium relief to customers.
I think the country moves to a single-payer, all-in health system by 2025. Our high-cost, complicated system yields no better health outcomes than Canada or Europe. The administration of the system and most of the providers will be from the private sector.
The Legislature reached a disappointing compromise on how to get about 40,000 more Minnesota kids and their parents ready for kindergarten and educational success.
It provided an additional $20 million for $140 million in scholarships over the next two years to the growing Parent Aware all-day day care and education sites. And it gave an additional $50 million for part-time school-based sites, as furtherance of the education lobby’s desire to have preschool in every school. But more than half of Minnesota kids already are ready for kindergarten, without a mandatory in-school program.
It would have been better to accelerate the focus on the neediest families. The economic research behind Parent Aware shows this is where taxpayers and those families will get the biggest long-term bang for the public dollar. More information at: closegapsby5.org.
Finally, next year’s Legislature should pass the long-languishing “Right to Repair” bill that would force consumer electronics manufacturers that make products in Asia to allow more licensed repair shops and recyclers to refurbish more products for resale.
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at firstname.lastname@example.org.