Saint Paul, Minn.—Senate Majority leader Tom Bakk (DFL-Cook), Sen. Rod Skoe (DFL-Clearbrook), Sen. Richard Cohen (DFL-Saint Paul) and Sen. Katie Sieben (DFL-Cottage Grove) announced the Senate budget targets for the budget reserve, Senate Tax Committee and Finance Budget Divisions today.
“The Senate is charting the middle ground between the House Republican budget targets and Gov. Dayton’s budget recommendations. We share many of the same priories as the House and Governor and have intentionally taken a balanced and measured approach to tax cuts, spending and prioritized dedicating some additional revenue to the budget reserve,” Bakk said.
Our targets deliver on a promise of taking a balanced, forward-looking approach to careful fiscal management by increasing the budget reserve, thoughtful tax relief, paying back previous budget shifts and investment in priorities shared by all Minnesotans. The Senate DFL is leading with the successful approach from the current biennia that structurally balanced the state budget, resulted in a $2 billion surplus, and increased the state’s budget reserve and fiscal stability while investing in education and health care.
The lessons of legislative sessions from the late 1990s and early 2000s were influential in the development of the Senate DFL budget targets. The legislative sessions of that era included successive and major property, income and motor vehicle registration tax cuts. Also during that time the legislatures took limited action to plan for an economic downturn, choosing not to contribute resources to the budget reserve. Thereafter, in 2003 Minnesota faced a $4 billion structural deficit, which was the result of the many years of aggressive tax cuts and economic factors. With a limited budget reserve, the state was not well positioned to weather the economic hardship. Just 39 of 201 members of the current legislature were in office during the tax cut frenzy years and the 2003 legislative session. Many of those members hold leadership positions in the Senate and are eager to avoid setting up the state for a similar face.
As a result of careful historical consideration the Senate DFL budget targets increase the budget reserve by $250 million to help the state improve and maintain a strong credit rating and guard against future instability. The Senate Finance Committee chaired by Sen. Richard Cohen and its budget divisions will invest $1.14 billion—nearly half of which will be dedicated to education. The Senate Tax Committee chaired by Sen. Rod Skoe will provide $459.8 million in sound tax policy that provides not only tax relief—including property tax relief—but also eliminates previous accounting gimmicks that will further restore budgetary stability for Minnesota’s future.
Click here to view a PDF detailing the Senate DFL budget targets by Senate Finance Division and the Tax Committee.