Tax bill should be paid for

The Senate Tax Committee approved an Omnibus Tax Bill this week that the full Senate will be asked to vote on in the coming days. The legislature isn’t crafting a budget this year so the bill isn’t very broad, but it does contain some worthwhile provisions. The bill also uses the budget reserve to fund these provisions, and it adds $190 million to the deficit in the next biennium.

If we have learned anything the last number of years, it is that if the legislature is going to spend money, it needs to pay for that spending with real, available dollars. The Tax Committee spent money and used the reserves and deficit spending to pay for those initiatives.

Some of the provisions in the bill probably are worth considering. They are common-sense policies for Minnesota businesses that have received bipartisan support. The bill asks for $291 million in new spending over the next three years to fund these ideas. In the Tax Committee, we have the unique ability to raise money to pay for these priorities, either by proposing new taxes or eliminating tax expenditures. We should have used this ability instead of making our financial situation worse with the proposed deficit spending.

Committing to spend money we don’t have is exactly why we’re in the situation we are today: Owing schools $2.4 billion and facing a $1.1 billion deficit in the next budget cycle. The ideas in this tax bill might be good policy, but only if they are paid for in a responsible manner.

If the Republican majority really is interested in job creation, I wish they would consider the Jobs Bill I introduced several weeks ago. It includes job-creating policies that are paid for. They will not pass the bill, however, because it adds a sales tax on internet sales, which they consider to be a tax increase. In reality, this is something that members of the business community are pushing because it helps Main Street businesses. It levels the playing field between Minnesota stores that have to compete against internet retailers who are able to charge less by not collecting sales taxes. By correcting this backwards policy, my Jobs Bill is paid for, opening the door for real policies that can begin working without further indebting the state. It is a win-win; the bill helps our main street businesses compete and helps employment with the credit for new hires.

There are several good ideas on the table at the Capitol this year, but we need to end the irresponsible and dishonest pattern of legislating without paying for our proposals. The 13 of us appointed to the Tax Committee took on a very large responsibility that we all should be brave enough to uphold. It’s the Tax Committee, not the Budget Reserve Transfer Committee. To say the governor is going to find $100 million in savings without putting any ideas on paper is not the way we do business. If we are going to provide tax relief in one area, we have to find some revenue somewhere else to pay for it. To do anything less is just not being honest with Minnesotans.


Senator Rod Skoe
Rod Skoe represents District 2, which includes all or portions of Becker, Beltrami, Clearwater, Hubbard, Lake of the Woods, Mahnomen, Otter Tail and Wadena counties in the northwestern part of the state. He chairs the Tax Committee.

Read more news from Sen. Skoe.
Senator Rod Skoe on EmailSenator Rod Skoe on Flickr