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, Baird Helgeson, Patricia Lopez, Jim Ragsdale, Abby Simons, Rachel E. Stassen-Berger and Glen Stubbe. Contributors in D.C.: Allison Sherry, Corey Mitchell and Jim Spencer.

Posts about Gov. Tim Pawlenty

Minnesota makes another push for income tax reciprocity

Posted by: Baird Helgeson Updated: June 19, 2014 - 3:04 PM

Minnesota and Wisconsin residents who live in one state but work in the other could soon have their income taxes dramatically simplified as part of a new tax reciprocity proposal.

Minnesota revenue officials on Thursday offered to lower Wisconsin’s annual payment by $1 million if the Badger state approves of the agreement by Sept. 30.

‘That millions dollars is part of Minnesota’s strong desire to reinstate income tax reciprocity,” said Sen. Roger Reinert, a Duluth Democrat who has worked with other border legislators for an agreement. “This really is us extending a hand and saying, ‘Work with us.’”

Wisconsin and Minnesota have not been able to broker a new arrangement since the four decade old income tax reciprocity agreement lapsed at the end of 2009. Suddenly, 80,000 residents who lived in one state but worked over the border had to file income taxes in both states.

Wisconsin revenue officials could not immediately be reached for comment.

The deadlock has come down to money.

Minnesota revenue officials studied the issue and determined that about 56,000 Wisconsin residents work in Minnesota, more than double the amount of Gopher state residents who cross the border for work.

Minnesota's study concluded that Wisconsin needs to pay about $92.5 million a year due to the difference.

The problem is, that’s about $4 million more than Wisconsin officials believe they should pay.

Minnesota made similar offers in 2012 and 2013, but both offers included the $4 million gap. Wisconsin officials rejected both proposals.

This year, Minnesota legislators decided to see if an additional $1 million might sweeten the deal.

“It really is a desire on the part of border legislators who are trying to make it a little smoother,” said Minnesota Department of Revenue Commissioner Myron Frans.

Differing tax rates between the two states also aggravates the problem.

Minnesota limits the credit it offers consumers for taxes paid in another state to the amount they would pay if they lived in state. Frans said he does not believe Minnesota taxpayers should subsidize Wisconsin’s higher effective tax rate.

Wisconsin officials have said their residents already pay enough.

Reinert and other border legislators said they still routinely hear from residents frustrated with having to file two state income tax forms.

Business owners, Reinert said, are just as frustrated that they have to keep two sets of tax records for employees who live across the border.

The issue boiled over in 2009 as the economy tanked and budget officials in both states were desperate for money.

Wisconsin delayed its payments to balance the state budget, creating a deeper hole for Minnesota's budget officials.

Then-Gov. Tim Pawlenty grew frustrated and let the program expire, saying that Wisconsin’s 17-month delay was too much for Minnesota’s shaky budget.

The new agreement allows Wisconsin to make four equal payments a year, minimizing one-time blows that can be difficult in a sagging economy.

For state leaders, the issue has become a balance between protecting state money and promoting convenience for taxpayers.

Frans said the governor authorized the new $1 million dollar offer, but they refuse to make a deal unless it is fair for all Minnesota taxpayers.

Minnesota still has reciprocity agreements with Michigan and North Dakota.

Smartphone 'kill switch' bill clears Senate, heads to House

Posted by: Abby Simons Updated: May 2, 2014 - 4:43 PM

A bill mandating smart phones to be enabled with a “kill switch” that would render the device useless if stolen passed the Minnesota Senate by a wide margin Friday.

The “kill switch bill,” which passed 44-14, would mandate any new smart phones after 2015 to be loaded with the functionality or provide the opportunity to download it. The measure was authored in response to a national epidemic of smartphone thefts, which are stolen and quickly resold for easy cash.

Locally, smartphone thefts have figured in a series of high-profile robberies on and around the University of Minnesota campus in recent months, and Mark Andrew, a former Hennepin County commissioner and unsuccessful Minneapolis mayoral candidate, was badly beaten by thieves who stole his phone at the Mall of America.

Despite its initial reluctance, the wireless industry announced last month that it would pledge to equip all smartphones with kill switch functionality in 2015. The bill’s author, Sen. Katie Sieben, DFL- Newport said the bill, coinciding with the pledge is meant to help deter future crimes from occurring and shows that the state is serious about stopping smartphone theft.

Under the bill, the “kill switch” feature could only be activated with the owner’s consent.
The bill was rolled in with a separate measure by Sen. Kari Dziedzic, DFL-Minneapolis, that would require retailers who buy used smartphones to keep a record of the sellers and limits payouts to electronic transfer or check—not cash.

The measure heads next to the House, where its sponsor, Rep, Joe Atkins, DFL-Inver Grove Heights, said it’s likely to pass. He said the bill, coinciding with the wireless industry’s pledge to install the functionality, as a “belt and suspenders” arrangement to ensure the functionality is equipped in phones.
 
 

Former Gov. Pawlenty supports a minimum wage hike, Senate vote today

Posted by: Rachel E. Stassen-Berger Updated: April 30, 2014 - 12:56 PM

Allison Sherry and Rachel E. Stassen-Berger

WASHINGTON --  Former GOP Gov. Tim Pawlenty said early Wednesday on MSNBC's Morning Joe that Republicans should back a minimum wage increase.

"If you're going to talk the talk about being for the middle class and the working person, if we have a minimum wage, it should be reasonably adjusted from time to time," the former presidential contender said on the morning cable program. "There are some basic things we should be for."

Pawlenty's comments come ahead of a Senate vote later today on a proposal supported by President Obama to boost the federal minimum wage from $7.25 an hour to $10.10 in three steps, concluding in 2016. The measure is supported by DFL Sens. Al Franken and Amy Klobuchar, both of whom have made floor speeches in the last two days in support.

Obama will also make remarks on the minimum wage later today. The vote is not likely to be taken up by the GOP-controlled House. Neither GOP Reps. John Kline or Erik Paulsen's office responded to questions on the wage hike Wednesday.

As Democrats were trumpeting Pawlenty's comments, the former governor made clear that his support for a minimum wage increase does not mean he backed the $10.10 an hour plan.

"The proposal being presented by the Senate majority goes too far and too fast,” Pawlenty said in an email to Politico.

Pawlenty, who is now the CEO of the Financial Services Roundtable, has a significant history with minimum wage increase proposals.

As governor back in 2005, Pawlenty signed a Minnesota minimum wage hike. That measure lifted the state's wage floor from $5.15 an hour, where it had stagnated since 1997, to $6.15 an hour for large employers.

At the time, the hike had bipartisan support and primarily Republican opposition. Among the Republicans who voted against it -- then state Rep. Paulsen, who is now in the U.S. House.

In subsequent years, Pawlenty vetoed legislators' attempt to raise the state's minimum so it remained at $6.15 an hour, even as the federal minimum went up to $7.25 an hour. Since then, Minnesota has had one of the lowest minimum wages in the country.

But this year, the DFL-controlled Legislature and DFL Gov. Mark Dayton set out to change that.

After considerable debate, they approved a minimum wage increase. Earlier this month, Dayton signed into law an measure to raise the state's minimum to $9.50 an hour by 2016. Future increases would be tied to inflation, meaning the state's lowest wage workers would continue to get paycheck boosts after 2016 except in times of significant economic downturns.

On the Senate floor Wednesday, Franken said the oft-repeated argument among Republicans that the minimum wage doesn't help businesses isn't true.

"People who earn minimum wage spend the money they're earning," he said. "Workers who are better paid are better workers and are less likely to quit ... It helps business."

Updated

Minnesota Senate GOP proposes $360 million in sales tax relief

Posted by: Baird Helgeson Updated: March 19, 2014 - 11:59 AM

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.

Dayton administration rolls out government streamlining initiative

Posted by: Baird Helgeson Updated: March 4, 2014 - 11:03 AM

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.

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