Republican legislators — especially those seeking higher offices — had a field day at Monday’s disaster relief special session, railing about the “man-made disaster” that new sales taxes on some business services is causing. They offered a litany of anecdotes about businesses planning to leave the state or canceling expansion plans because of those new taxes’ damage to their competitive position.
It was telling that majority DFLers made little effort to defend the taxes that they put into law just four months ago. In the House, 12 DFLers (out of 73) were either sponsors or co-sponsors of short-lived bills that would have eliminated one or two of those taxes, on farm equipment repairs and the warehousing of commercial goods, the latter due to go into effect April 1.
“Many of our members are interested in finding a correction” for those taxes, DFL Speaker Paul Thissen mildly observed.
They’ll have to wait until the regular session resumes on Feb. 25, Thissen said. He cited two reasons: No tax should be repealed after a biennium has begun without replacing the revenue or cutting scheduled spending; and no tax cut should be enacted in isolation, without examining an array of possibilities and considering the entire state’s best interests. A one-day special session to provide $4.7 million to 20 storm-battered counties wasn’t the place for that analysis, he said.
Thissen was voicing fiscal responsibility, as a leader of the governing majority should. But playing the grown-up put him and other DFLers in the crosshairs of minority pea shooters, for whom keeping the state budget balanced is a lesser concern.
Moments before the Senate adjourned, Majority Leader Tom Bakk attempted to play a little defense against the Republican onslaught. He noted that the new businesses taxes will pay for changes businesses wanted — lower property taxes, because cities are no longer required to pay sales taxes; and a time-of-purchase exemption from capital equipment sales taxes, sparing them the need to apply for a refund. “Those things have to be paid for,” he said.
A rebounding economy might generate enough revenue to cover a repeal or two. The next state revenue forecast, due in late November, may reveal as much. But, Bakk noted, the first $400 million that appears on the forecast’s bottom line is owed to school districts. That’s the last of an obligation the state racked up in 2009-11— when Republicans were either in the governor’s office or in the majority.
Bakk got the Senate’s last word Monday. Majority leaders generally do. But the obligation to correct flawed tax policy also rests with the majority. Thissen, Bakk and Gov. Mark Dayton have work to do on business taxes between now and Feb. 25.
Lori Sturdevant is a Star Tribune editorial writer and columnist.
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