State Senate Republicans want to increase tax relief for Minnesotans this year by proposing more than $360 million in permanent sales tax relief.
“Sales taxes affect everybody,” said Senate Minority Leader David Hann, R-Eden Prairie. Sales tax relief “is abundantly fair.”
Senate Republicans want to lower the state sales tax rate to 6.375 percent, from 6.875 percent.
The proposal comes as DFL leaders who control the Senate finalized more than $500 million in tax relief for consumers and businesses. The measure is expected to get a final vote Thursday.
Legislators are wrestling with a $1.2 billion projected budget surplus, which comes largely from the state’s strong economic performance.
Republicans have argued that Democrats raised too many new taxes last year. They have proposed returning nearly all of it to taxpayers, which could dramatically wipe out projected surpluses in the following years and potentially send the state into deficit again.
Senate Democrats are taking a more cautious approach and are trying to spend the money in ways that doesn’t blow a monster hole in the budget it future years. The Senate strongly supports using some of the surplus to bolster the state’s reserves by another $150 million, bringing the state’s rainy-day fund to around $750 million.
Senate Taxes Committee Chairman Rod Skoe said he does not want a repeat of the last decade, where the state was locked in cycle of deficits and emergency budget cutting that damaged the state's credit rating.
“We don’t want to go through that again,” said Skoe, DFL-Clearbrook. “A little bit of caution is in order.”
Republicans oppose building up the reserves, saying the tax money should be in the economy, not sitting in the state’s bank account.
“We are better off letting people keep their money in their pockets,” Hann said.
Gov. Mark Dayton’s administration rolled out a comprehensive government streamlining package Tuesday, outlining more than 1,000 proposed changes to make state services easier and more efficient.
The overhaul seeks changes in every corner of state government, from speeding environmental permitting to making it easier and faster the buy fishing licenses and pay taxes. The initiative also seeks to root out antiquated laws clogging up the books and adding work for state agencies.
Iron Range Resources and Rehabilitation Board Chairman Tony Sertich, who is leading the streamlining effort for Dayton’s administration, said state law is filled with antiquated provisions. He noted one state law even has a detailed prescription of exactly who must capture or kill wild boars in the state.
Dayton is staking a lot of political currency on the outcome of the initiative, which he calls “unsession.” He wants legislators to devote a significant amount of time weeding out antiquated or cumbersome laws.
But Dayton is not merely trying to declutter the state law books. He wants to make it easier and less aggravating for consumers of state services, which has been a frequent gripe when dealing with state government.
Dayton is not the first governor to try such an effort, but it is the most concerted one in a long time.
In selecting Sertich to lead the effort, Dayton has tapped a former House Majority Leader with a strong sense of how to get things through the sometimes unruly legislative bodies.
Dayton’s top policy advisers have been meeting regularly and touching base with legislative committee chairs, who will be vital to the success or failure of the effort.
Legislative committees will begin holding hearings on the streamlining measures this week.
A new report by the Minnesota Department of Revenue shows that property taxes held steady this year, down about $8 million after all state property tax refunds.
“This drop in property taxes is good news for Minnesotans, who for years have been hammered by double-digit property tax increases," DFL Gov. Mark Dayton said. "Thanks to the relief provided by the DFL Legislature last year, property taxes are actually going down statewide, for the first time in 12 years."
The amount of savings is less than Dayton and Democratic legislators predicted last year, but Minnesota Department of Revenue Commissioner Myron Frans called it “great progress.”
Republicans had warned that Democrats' desire to lower property taxes by increasing aid to local governments wouldn’t work, arguing that cities and counties would merely bulk up their budgets without lowering local property taxes.
"Despite Democrats repeated promises to reduce property taxes, Minnesotans learned today they are facing the highest property tax levy in state history,” said Hanska Rep. Paul Torkelson, the Republican lead on the House Property and Local Tax Division Committee. “Governor Dayton and Democrats set the target and they missed. After Democrats took $2.4 billion in new taxes and fees this past session, hardworking taxpayers can't afford to pay more."
Revenue Department officials found that city, county and school levies went up about $125 million this year, but that was before $133 million in state property tax aids and credits were returned to taxpayers.
Since 2002, property taxes rose an average of $332 million each year, according to the Revenue Department.
Frans said the state has finally broken the cycle.
“Overall, the number is one we are pretty satisfied with,” he said.
A bipartisan group pushing a proposed constitutional amendment to change how Minnesota judges are elected began their public lobbying effort at the Capitol on Wednesday.
The Coalition of Impartial Justice is pressing for a change that would end traditional judicial elections. Instead, sitting judges would face an independent review and their records shared with Minnesota voters, who would then decide whether to keep or toss the jurist.
Advocates say this is superior to the current system, where most judges run unopposed with little outside scrutiny. They also say existing system more easily allows judicial elections to become expensive campaigns, as partisan groups square off after a judge’s ruling on a divisive issue.
“The judicial system works because people trust it and they don’t think it is bought and paid for,” said former Minnesota Supreme Court Chief Justice Eric Magnuson, who was appointed by former GOP Gov. Tim Pawlenty. “We are at a perfect storm now,” he said, noting a recent spate of expensive and divisive judicial elections in Iowa, Wisconsin and Michigan.
Critics like attorney Greg Wersal say supporters want to tinker with the constitution for something that has never been a problem in the state. Judges almost always run unopposed and voters have not ousted an incumbent Supreme Court justice in more than 80 years. He said this is really an effort by sitting judges to protect their positions.
About 20 other states use such judicial retention elections, but Minnesota would join a handful of other states that require a nonpartisan panel to select a pool of qualified judges and an independent assessment of a judge’s tenure that would be shared with voters.
If voters toss a judge, the new judge would come from a group vetted by the indepedent review panel. There would be no way for an outside candidate to run against a judge.
Supporters say the new system makes judges more accountable.
“Minnesotans have little or no info about judges when they are on the ballot,” said Sarah Walker, the group’s president. “There is really no means of holding the judges accountable.”
So far, DFL legislative leaders have not publicly committed to putting this constitutional amendment on the ballot in the coming election. In the last election, voters defeated two proposed amendments, one banning same-sex marriage and another that would have required voters to show a photo ID.
Gov. Mark Dayton, in his first significant attempt to gather campaign cash from other people, has proved he is an ample fundraiser.
According to his campaign, he raised $1.1 million for his re-election effort in 2013. Of that he had about $800,000 cash on hand left to spend, according to his campaign manager Katharine Tinucci.
Dayton, who has largely self financed all his previous campaigns, said he would raise money from others for his re-election and has followed through on that pledge. His nearly $1.1 million haul does not include any personal funds, Tinucci said.
The figure presages hefty spending on what so far has been a low profile gubernatorial election. Already a host of outside groups are ramping up to sway voters in this year's election and Dayton's Republican rivals have been fundraising themselves to oust the DFL governor from office.
Dayton's haul bests the fundraising figures from the top two Republican candidates fundraising combined and is about $200,000 more than former Republican Gov. Tim Pawlenty raised for his re-election campaign the year before he won his second term.
Among Republican candidates for governor, former House Speaker Kurt Zellers and businessman Scott Honour have topped the charts. According to self-reported figures, Honour raised over $500,000 from donors and Zellers raised about $400,000 for his campaign. Honour may have additionally lent his campaign some funds.
Hennepin County Commissioner Jeff Johnson said he raised over $240,000, former House Minority Leader Marty Seifert brought in more than $150,000 and state Sen. Dave Thompson hauled about $120,000.
All told, the five Republican rivals brought in about $1.4 million for their campaigns but, unlike Dayton, they still have an intra-party fight to wade through before they can reach November voters. All campaign finance reports are due to the state's campaign finance agency by the end of the week.
Dayton, meanwhile, has the DFL field all to himself and is already picking up union endorsements that will assist him as he vies to return to the chief executive spot.
On Tuesday, the Minnesota Nurses Association said it has endorsed him for a second term. That union endorsement joins those from the Minnesota AFL-CIO, Education Minnesota, the American Federation State, County and Municipal Employees and Minnesota Association of Professional Employees.
That union backing can provide powerful support for the governor's re-election bid. Unions have contributed tens of millions of dollars to Minnesota campaign efforts since 2007.