With an insider’s eye, Hot Dish tracks the tastiest bits of Minnesota’s political scene and keep you up-to-date on those elected to serve you.

Contributors in Minnesota: Patrick Condon, J. Patrick Coolican, Patricia Lopez, Ricardo Lopez, Abby Simons, Rachel E. Stassen-Berger and Glen Stubbe. Contributors in D.C.: Corey Mitchell, Allison Sherry and Jim Spencer.

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Minnesota tax revenue lags in April

Posted by: Updated: May 12, 2014 - 6:37 PM

Minnesota tax collections lagged a little behind expectations in April, coming in at $1.7 billion.

Overall income tax, sales tax and corporate taxes were off a combined $12 million, about 0.7 percent below the forecast.

Individual income tax withholding in April was off the most, down $19 million. April sales tax receipts were up $17 million over the forecast, a rise of 4.3 percent over predictions.

For fiscal year 2014, tax collections are at $15.371 billion, $78 million below estimates.

Minnesota Management and Budget officials said in a statement that monthly revenue reports can swing wildly and “should be interpreted with caution.”

Nearly 1 million Minnesotans could see $103 million in tax cuts

Posted by: Updated: May 8, 2014 - 5:15 PM

Nearly 1 million Minnesotans will get $103 million in new tax breaks as part of a measure finalized Thursday, with more than half devoted to direct property tax relief for homeowners, farmers and renters.

“We wanted to do it as direct as possible,” said state House Taxes Committee chairwoman Ann Lenczewski, DFL-Bloomington. Homeowners, renters and farmers will get “super-sized” rebates this year.

House and Senate DFL leaders have been working for weeks to agree on a tax relief package using the remainder of the state’s $1.2 billion projected budget surplus.

House Minority Leader Kurt Daudt, R-Crown, said there is strong bipartisan support for tax relief this session. He has not reviewed the measure in detail, but expected it would have at least some Republican support.

About 940,000 homeowners, renters and farmers will get additional tax relief as part of the new measure.

Legislators earmarked $17 million in property tax relief for more than 90,000 farmers. The average farmer in Minnesota will get $410 in direct property tax relief, an increase of about $200.

Homeowners will share $12.1 million in property tax relief and renters will get an additional $12.5 million in property tax relief for the year.

“There is a good balance of tax relief for everyone,” said Senate Taxes Committee chairman Rod Skoe, DFL–Clearbrook.

Legislators are devoting $4.5 million this year and $10 million next year to control invasive species at public-access boat landings.

The House and Senate also want to create a pilot project to help retention and recruitment of volunteer first-responders. Volunteers in 14 qualifying counties will get a $500 stipend to stay with their squad.

Military income paid to National Guard members, whether active duty or reserve, will be tax free, under the proposal.

Parents of students struggling with reading can get a tutoring credit of up to $2,000 a year. The proposal also changes the timing of when businesses can submit sales tax payments, easing cash flow problems for many businesses.

The measure also includes more than 80 pages refinements and changes to clean-up the tax code. Modernizing of the state's tax law is part of Gov. Mark Dayton’s massive government streamlining effort he launched earlier this year.  

The measure does not include an expansion of the childcare credit, a provision Dayton has pushed for strongly.

The governor wants to expand the child tax credit to all families, not just low-income families. Doing so would increase the costs from $15 million a year to nearly $74 million.

House Speaker Paul Thissen, DFL-Minneapolis, said the tax credit is good policy, but too expensive to tackle this legislative session.

The House and Senate are expected to pass the tax measure next week, likely with strong bipartisan support.

This is the second tax relief measure of the session. All told, more than 2 million Minnesotans will get a total of $550 million in tax relief if the new measure becomes law.

Senate votes to ban online lottery ticket sales

Posted by: Updated: April 25, 2014 - 4:37 PM

Minnesota's fledgling online lottery operation has been thrown into jeopardy as the state Senate passed a measure Friday banning Internet lottery ticket sales.

The move came as legislators have blasted Minnesota Lottery director Ed Van Petten in recent days for embarking on online lottery ticket sales without legislative approval.

“I am not saying the lottery director overstepped his bounds,” said Senate President Sandra Pappas, DFL-St. Paul. “But it is a reasonable request to ask the lottery to slow down.”

The proposal was tacked into another gambling-related measure that passed 55-2, with strong bipartisan support.

Lottery officials insist they do have authority to branch off into online ticket sales.

“They are making a huge mistake,” Van Patten said Friday.

Van Petten said he presented legislators with data showing the benefits of online sales and that it does not hurt convenience stores that sell traditional lottery tickets.

“They didn’t even read it,” he said of legislators. “There are forces greater than me pushing this.”

Operators of the state’s 18 tribal casinos – who are significant contributors to both parties -- have watched the measure closely. They do not believe that lottery officials have authority to sell tickets online.

Nationally, the recession-racked casino industry has fought hard against new online gambling as casino owners look to prevent further erosion of their business.

It is not clear whether the House will take up the measure, but there is strong support among its members on both sides of the aisle.

DFL Gov. Mark Dayton, who appointed Van Petten, has urged caution.

“The governor wants to know whether these exclusions are benefiting the people of Minnesota, or the vested economic interests that make money off the status quo,” said Matt Swenson, a Dayton spokesman. “He has said we need to separate clearly what is in the public interest, and what is in the moneyed interest.”

Minnesota Lottery officials have been trying to find new ways to reach customers as sale of traditional paper tickets have languished.

Van Petten views the online sales a marketing tool to reach younger consumers who are more comfortable making purchases online. They say research shows online sales actually help retailers.

So far, about 8,500 Minnesotans actively buy lottery tickets online, a tiny fraction of the 1.2 million who regularly buy conventional tickets from retailers.

Lottery proceeds go to the state budget and to environmental and conservation causes.

State legislators will make up lost revenue by pulling money from the state budget.

“I think lottery officials are wrong and they shouldn’t do it,” said Senate Minority Leader David Hann, R-Eden Prairie. “If it requires legislation to make that clear, then we ought to pass it.”

Dayton blasts GOP, seeks more statewide construction projects

Posted by: Updated: April 22, 2014 - 3:39 PM
Dayton says he wants more statewide construction projects.

Dayton says he wants more statewide construction projects.

Gov. Mark Dayton is blasting legislative Republicans for refusing to pay for additional construction projects that could bring new economic development to the state.

“They are just dead wrong,” Dayton said Tuesday. “The Republicans have been wrong on this since I arrived. They are short-changing projects all around the state that are job-creating projects.”

Democratic and Republican legislative leaders cut a deal last year to limit new construction spending to about $850 million this session. They made the agreement before a strong economic turnout left the state with a surplus of more than $1.2 billion.

Dayton says the strengthening economy and strong budget outlook give the state more cushion to increase statewide borrowing to pay for roughly $400 million in additional projects.

Since state borrowing requires a two-thirds vote, the measure gives Republicans a rare moment of leverage as Democrats control both the House and the Senate. 

Republicans say that the state should not run up taxpayer debt, and leaders have publicly not budged from the $850 million target. They say that the agreed upon number fits with historical averages and see no reason to break from it now.

The statewide construction measure stands as one of the last major initiatives to get completed in the final weeks of the legislative session.

Dayton said a recent Star Tribune story about an unfinished water project in southwestern Minnesota “is a prime example of where the lack of a public investment has crippled that area for economic growth.”

The governor said he is willing to fully fund the water project if it would persuade some GOP legislators to support a higher borrowing measure.

“I don’t think they have a toenail to stand on to justify this rigid ideology,” Dayton said. Holding to that number “would deny a whole range of projects around the state because of their fiscal ideology.”

Dayton signs historic minimum wage increase into law

Posted by: Updated: April 14, 2014 - 2:32 PM

DFL Gov. Mark Dayton signed into law a dramatic increase in the state’s minimum wage Monday, giving raises to more than 325,000 Minnesotans.

The new $9.50 base hourly wage takes the state from having one of the lowest minimum wages to one of the highest when it fully kicks in by 2016.

“Minnesotans who work full-time should be able to earn enough money to lift their families out of poverty, and through hard work and additional training, achieve the middle-class American Dream,” said Dayton, surrounded by legislators, labor and labor leaders at a ceremonial bill signing in the State Capitol rotunda. “Raising the minimum wage to $9.50, and indexing it to inflation, will improve the lives of over 325,000 hard-working Minnesotans. I thank the Legislature for recognizing the need to make work pay in Minnesota.”

Minnesota’s dramatic wage increase puts the state at the forefront of a major initiative of President Obama, who has failed to persuade Congress to raise the federal minimum wage to $10.10 and instead focused on pressing his case state by state.

The state’s higher minimum wage has angered Republicans and business leaders, who say the higher wage will force them to lay off workers and become a drag on the fragile economic recovery.

“We believe that all Minnesotans deserve the dignity of supporting themselves and their families through hard work,” said state Rep. Ryan Winkler, a Golden Valley DFLer who was a chief negotiator of the minimum wage effort. “Raising the minimum wage and indexing it to inflation is an important step to create a rising floor for all wages that will benefit hundreds of thousands of Minnesotans who work hard and deserve to get ahead.”

At $6.15 per hour, Minnesota has one of the lowest minimum wages in the nation, lower than neighboring Wisconsin, Iowa, North Dakota and South Dakota. Minnesota is one of only four states with a minimum wage below the national rate of $7.25 per hour.

State officials estimate that the $9.50 base wage will put an additional $472 million in the pockets of Minnesota’s lowest-wage workers each year. Supporters say the increase in consumer spending is expected to help local businesses in communities across our state, and provide another boost to Minnesota’s growing economy.

“Today represents a big step forward for low-wage workers in our community,” said Sen. Jeff Hayden, a Minneapolis DFLer who was a chief supporter of the wage-hike measure. “We rely on these workers every day, yet many of them cannot support their own families. Raising the minimum wage is part of a larger effort to lift up the working poor and ensure all Minnesotans have the opportunity to earn enough to get by.”

A Minnesotan who earns $6.15 per hour work full-time earns an annual salary of just $12,792, about $7,000 below the poverty line. Raising the minimum wage to $9.50 per hour comes within $30 of closing that gap for the year.

To help small businesses, the bill also establishes lower minimum wage requirements for small employers and young workers once the new law takes effect Aug. 1.

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