Thompson, Zellers want warehousing tax repeal on session agenda

Sen. Dave Thompson makes case for warehousing tax repeal.

Repealing a new warehousing tax that doesn't even kick in until next April is becoming early fodder in the upcoming gubernatorial race.

Republican state Senator and gubernatorial candidate Dave Thompson called a news conference Thursday, urging swift repeal of the new tax. Thompson said repealing the tax should become a top priority during an upcoming special legislative session expected to deal with aid for storm victims and the repeal of another new tax on farm equipment repair.

"Business will be hard hit by this," the Lakeville Republican said at a State Capitol news conference. "The sense for me is that this particular tax is toxic, that it is having a ripple effect on a lot of businesses."

House Rep. Kurt Zellers, a Maple Grove Republican also running for governor, issued a news release less than an hour before Thompson's news conference saying he, too, will introduce legislation to repeal the warehousing tax during the special session.

"It is disappointing that Governor Dayton has refused to acknowledge the damage done to our state's economy by imposing business-to-business taxes that end up hurting consumers and killing jobs," Zellers said. "These taxes impact virtually every sector of our economy, from mining to retail to agriculture."

DFL Gov. Mark Dayton will meet with legislative leaders from both sides Friday to finalized an agenda for the special session, which could be called Sept. 9.

The taxes on warehoused goods and farm equipment repair became last-minute additions to the state budget negotiations between Dayton and DFL legislative leaders. Dayton said almost immediately after the session that he didn't like the agriculture or warehousing tax, but agreed to them as part of global budget negotiations.

Dayton said this week he favors repealing the warehousing tax, but only if legislators have a way to pay for it that won't blow a hole in the new budget.

Thompson did not offer a specific plan to pay for the tax break, suggesting ending a campaign contribution refund program and looking for trims within human services. Zellers did not offer a plan to pay for repealing the warehousing tax, either.

Dayton is more eager to repeal the new farm machinery repair tax, which only costs the state about $28 million over two years, money that could easily be pulled from the state's bottom line. The price tag for the warehousing tax is about $95 million, which would require a larger rethinking of the state budget, such as other reductions or another new tax to cover the lost money.

Without someone offering a solid plan to pay for ending the warehousing tax, Dayton said he favors repealing the tax in the upcoming regular legislative session, once budget officials have a clearer look at the economy and can see if tax collections remain strong.

In a sign of the intensifying gubernatorial race, an independent group backing Dayton for a second term criticized Thompson for not offering any plan to pay for the tax repeal.

"Dave Thompson is full of hot air, but not solutions," said Carrie Lucking, executive director for Alliance for a Better Minnesota. "Instead of grandstanding and trying to re-live his former celebrity as a radio host, Thompson should roll up his sleeves and get something done. That's the kind of leadership Minnesotans expect."