Tax debate ends with one bill signed, one pocket veto

May 14, 2012

This afternoon, we saw the final chapter of the tax debate for the 2012 Legislative Session as Governor Dayton took action on the two remaining tax bills. And we are largely back where we started, with some of the most dangerous proposals rejected along the way, but also little progress in reforming the tax system so that it adequately funds our state’s priorities and fairly distributes the responsibility for funding those priorities.

House File 2690 is mainly a technical bill, but last week it picked up a few provisions from a tax bill vetoed earlier this session, such as a one-time $4 million increase in the targeted property tax refund. This tax refund is available to homeowners of any income level whose property taxes increase by 12 percent and at least $100 over the previous year. Governor Dayton signed this bill into law today.

House File 247 was a more substantive bill, including tax provisions that its proponents argued would help spur economic growth in the state, such as:

  • A one-year freeze in the state property tax paid by businesses and cabins
  • Other tax credits for certain businesses and investors
  • An increase in the targeted property tax refund in future years
  • Local tax incentives.

(You can read more of the details in last week’s blog.) A primary problem with the bill is that it would have added $73 million to next biennium’s revenue shortfall, currently measured at $1.1 billion, leaving future policymakers to define which revenue increases or service cuts would be needed to finance the tax cuts.

These tax provisions were also unlikely to get a strong bang for the buck, as some of the tax benefit would reward actions that would have occurred anyway.

In a letter to the Legislature, Governor Dayton raised his concerns with the bill, including the increase in the future deficit, and that the benefits of the tax cuts were not more widely shared. House File 247 failed to become law through a “pocket veto” – which means that the Governor returned the bill to the Legislature without his signature, but without formally vetoing the bill.

-Nan Madden

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A few pieces from vetoed tax bill find a home in House File 2690

May 9, 2012

I blogged earlier today about how some of the ideas from the vetoed omnibus tax bill (House File 2337) have found new life in two other tax bills moving today at the Legislature.

  1. House File 247 includes many provisions from House File 2337 in a scaled-back form. This bill was passed by a conference committee this morning.
  2. Last night, the Senate added a few other provisions from House File 2337 to House File 2690, a technical corrections bill, which was then passed by the House this afternoon.

I blogged about House File 247 earlier this afternoon. Now a look at House File 2690. In addition to the original technical provisions, the bill includes a few ideas from House File 2337:

  • Cities with populations of 5,000 or more will have their 2013 Local Government Aid payments frozen at 2012 levels. Smaller cities will receive the larger of what they received in 2012 or what they would get in 2013 under the current aid formula. This cuts LGA funding in FY 2014 by $1 million.
  • The bill also increases the targeted property tax refund for homeowners by $4 million in FY 2013. This refund is available to homeowners whose property taxes increase by 12 percent and at least $100 over the previous year. It has no income limitations to qualify. (The provision in this bill applies to refunds in 2012 only. A smaller increase in the targeted property tax refund starting in 2013 is in House File 247.)
  • The increase in the targeted property tax refund is paid for by a $4 million transfer from a special revenue account at the Department of Revenue, a provision that was also part of House File 2337.

Unlike House File 247, this bill doesn’t add to our future revenue shortfall.

Looking at the two tax bills moving today and those that preceded them, the most damaging tax proposals did not make it into law, such as the House’s deep cuts to renters’ property tax refunds and phased-in tax cuts that over time would have cost the state billions of dollars. Such proposals would harm struggling families and put investments in our future prosperity at risk.

But the Legislature didn’t make much progress on the challenges before us. We still have a tax system that is inadequate to fund our state’s priorities, and still asks low- and moderate-income Minnesotans to pay more than their fair share.

Next year, we’ll have an opportunity to do better.

-Nan Madden

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Scaled-back tax bill still raises unanswered questions about the future

May 9, 2012

Last week, Governor Dayton vetoed House File 2337, the omnibus tax bill. But that doesn’t mean the tax discussion is over for this session.

Two other tax bills are moving through the Legislature today.

  1. House File 247 is in many ways a scaled-back version of House File 2337. It was passed by a tax conference committee this morning, and it’s expected to move to a floor vote soon.
  2. House File 2690, which is largely a technical bill, had some provisions based on House File 2337 added to it last night in the Senate, and is being debated in the House this afternoon.

This blog takes a look at the first of these, House File 247.

Last week, I noted that any tax bill should be paid for fairly, be realistic about its expected economic impact, and should not put our future prosperity at risk. The cost of House File 247′s tax cuts in the next biennium is less than in House File 2337. But it still creates a $73 million hole in the next biennium’s budget – and this bill does not identify which revenue increases or cuts in services would be used to fill in that hole. Without that information, it’s hard to know whether the trade-offs are worth it.

House File 247 includes $46 million in tax cuts and economic development spending in the FY 2012-13 budget cycle, and $73 million in FY 2014-15. The bill is modeled on House File 2337, but many provisions have been scaled back. In particular, the bill no longer includes phased-in tax cuts whose costs grow over time.

In this budget cycle, $28 million of the cost is covered by drawing on the state’s budget reserve. The other $18 million is not specified in the bill, but is described as being covered by savings elsewhere in the budget.

Some of the bill’s major provisions include:

  • The statewide property tax paid by businesses and cabins is frozen for one year, instead of being adjusted for inflation. This is a $10 million tax cut in FY 2012-13 and a $37 million cut in FY 2014-15. (Previous tax proposals phased it out completely.)
  • Small businesses that buy capital equipment will receive their sales tax exemption at the time of purchase, instead of having to apply for a refund. ($13 million in both FY 2012-13 and FY 2014-15.)
  • The Research & Development tax credit for businesses with certain R&D expenses is increased by $4 million in FY 2012-13 and $6 million in FY 2014-15.
  • The Angel Investor Tax Credit for those who invest in certain start-up businesses is increased by $4.5 million in FY 2013 only.
  • The targeted property tax refund for homeowners is increased by $2 million in FY 2014-15. This refund is available to homeowners of any income whose property taxes increase by 12 percent and at least $100 over the previous year. (The provision in this bill applies to refunds starting in 2013. An increase in the targeted property tax refund in 2012 is in House File 2690.)
  • There is $3 million in FY 2014-15 in tax credits for businesses that hire veterans.
  • The bill includes a number of other economic development provisions, including $6 million in tax incentives in FY 2014-15 for a data center project, $7 million for the Minnesota Investment Fund in FY 2013, and $1 million in FY 2012-13 and $2 million in FY 2014-15 for a Greater Minnesota internship grants program, as well as a range of local tax incentives for economic development projects.

(The spreadsheet for this bill is handy for comparing House File 247 to House File 2337, and original positions by the Governor, House and Senate).

The bill may not receive Governor Dayton’s signature, as it still draws upon the state’s budget reserve and adds to future deficits, two things that he has opposed throughout the legislative session.

-Nan Madden

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Tax cuts are a risky way to try to stimulate state’s economy

May 4, 2012

Proponents of the omnibus tax bill vetoed today by Governor Dayton made the case that the tax cuts it contains – primarily a freeze on the statewide property tax paid by businesses and cabins and incentives for investors in certain businesses – would spur economic growth in Minnesota. We all want strong economic growth, but the bill (House File 2337) was unlikely to have had a strong bang for the buck.

In some cases, the state would have provided a tax benefit for behavior that would have occurred anyway. There was no requirement or guarantee that the tax cuts be spent on new hiring in Minnesota, or spur new investments that would have not occurred in the absence of the tax benefit. Businesses are more likely to create jobs when there is more demand for the goods or services they produce, not simply in response to a tax cut.

Another problem with the omnibus tax bill is that it didn’t specify how the tax cuts would be paid for in the future. The tax cuts cost $145 million in FY 2014-15, and the cost grows over time, reaching an estimated cumulative loss in revenue of $2.3 billion by 2026.

By phasing in the tax cuts, the omnibus tax bill separated the tax decisions made this year from the consequences of paying for them. And if the past is any guide, those consequences would threaten the building blocks of our future economic success.

For example, tax cuts could put at risk state support for our public colleges and universities, which play a critical role in preparing our workforce. State funding for higher education has already fallen below FY 2000-01 levels (and that’s in actual dollars, not inflation adjusted), even though our higher education institutions are serving tens of thousands of additional students. Those tax cuts could result in further cuts to state financial aid, which already falls short of the needs of the roughly 85,000 Minnesota students it helps afford college each year.

Or next year, we might expect policymakers to once again ask Minnesota renters to shoulder the cost of the tax cuts, as in this year’s House tax bill.

And adding $145 million to our FY 2014-15 shortfall would also put off the day when the state will fully reverse the school funding shift.

We’re not out of the woods yet

Some hoped that policymakers wouldn’t have to figure out how to pay for the tax cuts next year, thinking that the revenue gap could be filled in by stronger economic growth. It certainly is possible that the state’s economy could improve more than projected. But it would be unwise to pass tax cuts based on that assumption.

The April 2012 Economic Update from Minnesota Management and Budget reported that tax revenues for February and March came in $106 million above forecasts. But MMB identified a number of reasons, including timing issues, why the higher revenues in those two months may not indicate a trend.

The Governor’s veto of the tax bill avoids its most negative outcomes. If policymakers wish to pass a tax bill in the waning days of the legislative session, they should craft a bill that is paid for fairly, is realistic in its expected economic effects, and does not put our future prosperity at risk.

-Nan Madden

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Tax conference committee avoids cuts to renters’ property tax refunds, passes tax bill

April 30, 2012

The tax conference committee, charged with working out a compromise between House and Senate omnibus tax bills, appears to have finished their work and have passed a conference committee report.

Perhaps the most positive feature of the conference report on House File 2337 is that it does not include the deep cuts to renters’ property tax refunds that had been included in the House’s bill. That means that Minnesota’s low- and moderate-income renters will not be asked to pay for the bill’s tax cuts, which primarily go to businesses and investors.

However, the conference report has not found a sustainable way to pay for the tax cuts. In this budget cycle, the tax cuts are paid for through a $44 million transfer from the state’s budget reserve and a $4 million transfer from a special revenue account used by the Department of Revenue. But the bill adds $145 million to the revenue shortfall in the next budget cycle, currently projected to be over $1.1 billion, making it more difficult to sustainably fund the state’s priorities.

The conference report includes $48 million in tax cuts in FY 2012-13 and $141 million in FY 2014-15, less than in the original House and Senate tax bills. Some of the major tax cut provisions include:

  • Freezing the amount raised from the statewide property tax paid by businesses and cabins, instead of adjusting it for inflation as under current law. This results in a $10 million tax reduction in FY 2012-13 and $72 million in FY 2014-15, and the cost will grow over time.
  • Increasing the Research & Development credit for businesses with certain R&D expenses ($8 million in FY 2012-13 and $13 million in FY 2014-15).
  • Increasing the Angel Investor Tax Credit for those who invest in certain start-up businesses ($4.5 million in FY 2012-13 and $10 million in FY 2014-15).
  • Allowing businesses who purchase capital equipment to receive a sales tax exemption at the time of purchase, instead of needing to pay upfront and apply for a refund. The exemption applies to businesses with fewer than 81 employees in FY 2012 and to all businesses in FY 2016 ($19 million in both FY 2012-13 and FY 2014-15).
  • Increasing the targeted property tax refund for homeowners for property taxes paid in 2012 only ($4 million in FY 2012-13 and $2 million in FY 2014-15). This refund is available to homeowners of any income level whose 2012 property taxes increase by 12 percent and at least $100 over the previous year.

Cities with populations of 5,000 or more will see their 2013 state funding through Local Government Aid frozen at 2012 levels; smaller cities will receive the larger of what they received in 2012 or are scheduled to receive in 2013. The bill also includes a number of local development provisions that provide local tax incentives but do not have a cost to the state.

It’s not clear whether the Governor will sign the bill. Governor Dayton has opposed making cuts to the Renters’ Credit, and that provision is not in this bill. However, the Governor has also opposed using the budget reserve and increasing the future budget deficit, and this bill does both.

-Nan Madden

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Legislature approves some fixes to health and human services

April 25, 2012

Many breathed a sigh of relief when the February forecast showed Minnesota had no new deficit in the current biennium. The positive fiscal news means there is no need for policymakers to consider yet another round of deep spending cuts to critical services. In fact, the House and Senate did not issue any official “targets” calling for finance committees to cut their budgets.

Instead, Governor Dayton and the Legislature have advanced budget proposals for health and human services recommending mostly small changes, primarily fixing some unintended consequences from budgets approved in previous years and reforming service delivery.

Earlier this session, Governor Dayton released a supplemental budget proposal that included $28 million in additional funding for health and human services in the current biennium, and $68 million in FY 2014-15. On Wednesday, the House and Senate approved a conference committee agreement on House File 2294 that increases net general fund spending for health and human services by nearly $11 million in the current biennium, and by less than $1 million in FY 2014-15. It seems likely that Governor Dayton will sign the bill when it reaches his desk.

Highlights of the conference committee agreement include:

  • Some Emergency Medical Assistance coverage restored. Last session, policymakers cut many services previously available through Emergency Medical Assistance, which provides health care coverage for qualifying non-citizens who face a medical emergency or suffer from a serious chronic health condition. The Governor’s supplemental budget would have restored coverage for kidney dialysis and cancer treatment. The conference committee agreement adopts the Governor’s position, but only restores coverage for services in FY 2012-13. In another twist on this issue, a recent legal settlement between the Minnesota Department of Human Services and immigration advocates requires the state to provide health care services in situations where failure to provide treatment would result in a medical emergency within 48 hours.
  • Personal care attendant cut delayed. Personal care attendants enable individuals who need assistance with the activities of daily life to remain in their communities and avoid institutional care. The Governor’s proposal repealed a 20 percent cut made last year in payments to people who work as personal care attendants (PCA) for family members with a disability. This cut raised the concern that relative caregivers, especially those in rural areas, would have to find different jobs to support themselves, leaving their relatives with no options for at-home care. The conference committee agreement delays the implementation of the 20 percent cut in payments until July 1, 2013.
  • Continuing care payment rate cut delayed. Continuing care services help Minnesotans live independently in the community and avoid institutionalized care. The conference committee agreement delays a 1.67 percent cut in payment rates for continuing care providers until FY 2014 (when it is anticipated that a federal waiver will make the cut unnecessary). However, the payments that are restored for FY 2013 will not actually be paid to providers until FY 2014, an accounting move that will push most of the $23 million cost into the next biennium. The Governor did not propose any changes to continuing care payment rates.
  • Employed persons with disabilities allowed to work longer, keep more assets. The Governor’s proposal allowed individuals in the Medical Assistance-Employed Persons with Disabilities program to work past the age of 65 and maintain more of their assets. The conference committee agreement adopts the Governor’s proposal.
  • Child care absent days increased for students. In 2011, lawmakers reduced the number of absent days that the state’s child care assistance program would reimburse providers from 25 to 10. The reduction makes it challenging for families to maintain child care if illness or emergency result in too many absences. The conference committee agreement increases the number of paid absent days back to 25, but only for families where at least one of the parents is under 21 and attending school. The Governor did not propose any changes to the absent day policy.
  • Funding for Family Assets for Independence in Minnesota (FAIM) grants reinstated. In 2011, policymakers eliminated state funds for FAIM, which matches savings by low-income participants who are seeking to obtain post-secondary education, purchase a home or start a new business. The conference committee agreement provides $250,000 in one-time funding for FAIM. The Governor did not propose any funding for FAIM.

Overall, the health and human services conference committee agreement focuses on addressing some of the most pressing challenges facing vulnerable Minnesotans. While the agreement does not offer a complete solution to all of these issues, it moves us in the right direction while respecting the state’s tight budget situation.

-Christina Wessel

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Lawmakers still considering asking renters to pay for business tax cuts

April 18, 2012

Many Minnesotans put the final touches on their income tax forms yesterday, and as they did so, many also submitted their applications for state property tax refunds, which help homeowners and renters whose property taxes make up a high share of their incomes. The refund for renters, commonly called the Renters’ Credit, recognizes that renters pay property taxes through their rents.

Many of those renters will see smaller refund checks this year, as a result of a $26 million cut to the the Renters’ Credit agreed to last year. Nearly 300,000 Minnesota households will lose an average of $87 because of this cut and about 7,300 Minnesota households will lose their entire credit.

But renters could face another nasty surprise in August: when they receive their refunds, they could find that policymakers have taken a further bite out of them.

That’s because legislative leaders and Governor Dayton are in negotiations to craft a tax bill, and whether there will be further cuts to the Renters’ Credit is part of that discussion.

Both the House and Senate tax bills propose a number of tax cuts for businesses and investors, primarily the gradual elimination of the state property tax paid by business and cabins. The Senate also includes a one-time tax cut for married couples. In both bills, the cost of these cuts grows over time, adding to next year’s budget shortfall, which is already measured at $1.1 billion, and digging the hole deeper as the years pass.

In the short term, however, state law requires that the budget be balanced. The House would pay for these tax cuts through deep cuts to the Renters’ Credit. If this proposal becomes law, 66,200 Minnesota households would no longer qualify for a property tax refund – one in five currently eligible households. The average refund would be cut by $213, a noticeable loss for people with modest incomes.

Governor Dayton and the Senate tax committee have been right to oppose cuts to the Renters’ Credit. As the Star Tribune and Rochester Post-Bulletin have noted, it is fundamentally unfair to ask Minnesota’s low- and moderate-income renters to pay for tax cuts. It’s counterproductive as well. Minnesotans buying goods and services in their local communities is what’s needed to help the fledgling economic recovery – but cuts to the Renters’ Credit means fewer customers at our local stores.

The Senate pays for the tax cuts in the short term with a $100 million transfer from the state’s budget reserve (or the Dayton administration can reduce this figure by making cuts in the state budget). Drawing on the budget reserve is risky.

If cutting the Renters’ Credit or drawing on the budget reserve are the only two options, that only underscores that the state cannot afford the proposed tax cuts.

The session will end soon, but it is not over yet. There still is time for Minnesotans to weigh in on this fundamental question of priorities.

Here are three actions you can take:

  1. Contact Governor Dayton. Thank him for his past support for the Renters’ Credit, and ask him to continue to protect the Renters’ Credit.
  2. Contact the Senate members of the Tax Conference Committee. Thank them for not making cuts to the Renters’ Credit and urge them continue to defend the Renters’ Credit. The members are: Senators Julianne Ortman, Roger Chamberlain, Warren Limmer, Geoff Michel and Julie Rosen.
  3. Contact the House members of the Tax Conference Committee. Ask them not to include any cuts to the Renters’ Credit in the final tax conference committee report. The members are: Representatives Greg Davids, Sarah Anderson, Jenifer Loon, Tara Mack and Linda Runbeck.

The Minnesota Council of Nonprofits has prepared information for Contacting Your Representatives and Helpful Tips for Contacting Legislators.

-Nan Madden

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‘Apples to apples’ comparison finds recent state general fund spending growth is modest

April 18, 2012

Understanding trends in state general fund spending has become more challenging in recent years, given a number of unusual one-time occurrences with a big impact.

But an apples-to-apples comparison done by Minnesota Management and Budget (MMB) (tucked away on page 61 of the February forecast) shows state general fund spending has been growing relatively slowly, less than two percent a year from FY 2010 to FY 2015.

The MMB analysis adjusts for a number of distorting factors including:

  • Federal economic recovery dollars, which replaced some state funding during FY 2010-11, primarily for education and health care;
  • K-12 funding shifts;
  • Selling off future tobacco settlement payments.

All of these allowed Minnesota to fund services in FY 2010-11 and FY 2012-13 but make spending appear artificially low, especially in FY 2010-11.

Without making these adjustments, Minnesota’s general fund spending appears to have grown by more than 20 percent over the last two budget cycles. That would be mathematically correct, but misleading. A fair analysis requires we properly account for these various one-time pots of money that sustained general fund services in down budget years.

Consider a closer-to-home example. A family was making $40,000 a year, but in 2008 the recession hit and the father got laid off. He took a lower-paying job and mom got a part-time job. Together they were now making $35,000. They got some help from relatives, who helped pay the mortgage and buy food and school supplies. They put off paying bills where they could. By 2012, things got better. The family is now making $42,000.

The family was making $35,000 in 2008 and $42,000 in 2012. We could say that looks pretty darned good, a $7,000 increase or 20 percent in four years. That analysis would be mathematically correct, but a bit ridiculous. A more reasonable assessment is that the family is $2,000 or five percent ahead of where it was before dad got laid off. The family is still in a fragile economic state, given it has several outstanding bills to pay.

Minnesota faces a $1.1 billion revenue shortfall in the next biennium, and still owes school districts $2.4 billion in delayed payments. Tough choices are ahead, but we should have an accurate understanding of what got us there. Relatively modest increases in spending are not the cause.

-Scott Russell

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Governor Dayton vetoes Legislature’s plan to use reserves to buy back school shift

April 5, 2012

A debate between Governor Dayton and the Legislature over how quickly to reverse the school funding shift has put the spotlight on the proper role of the state’s budget reserve.

We have all heard how policymakers opted to delay $2.7 billion in payments to school districts, using those funds to help solve recent budget deficits. Following state law, $313 million of the surplus reported in the February forecast was used to begin to repay these delayed payments. Any future surpluses will continue to restore the shifted payments. According to current projections, it will take an additional $2.4 billion to return the school payment schedule to normal.

The Legislature wants to repay schools sooner rather than later. Earlier this week, the House and Senate passed a K-12 education omnibus bill that included just one provision – using $430 million from the state budget reserve to buy back more of the school payment shift.

The state budget reserve exists to stabilize the state’s financial situation during an economic downturn, as well as to help manage day-to-day cash flow issues. Minnesota currently has $658 million in the reserve – less than two percent of the state’s $33.8 billion biennial budget. Minnesota Management and Budget, the agency that oversees the state’s finances, recommends that we keep $1.3 billion in our budget reserve to properly manage revenue volatility.

Citing concerns that using two-thirds of the state’s budget reserve to pay back schools would undermine the state’s “newly achieved fiscal stability,” Governor Dayton vetoed the K-12 education omnibus bill today. He argued that state law determines that “fully funding our reserves is our highest priority” and should be funded prior to other commitments, including repaying the school payment shift.

With the state facing a $1.1 billion projected deficit in the FY 2014-15 biennium, policymakers should recognize the importance of maintaining adequate levels of reserves to respond to economic changes.

-Scott Russell

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’98 percent’ constitutional amendment undercuts common-sense budgeting

April 4, 2012

In our ongoing effort to highlight the pitfalls of budgeting by constitutional amendment, we just released an issue brief, ’98 Percent’ Constitutional Amendment Creates Barriers to Common-Sense Budgeting. The 98 percent amendment is one of several proposed constitutional amendments that would severely limit lawmakers’ ability to create a budget that meets our state’s needs. The 98 percent amendment is short-sighted on many grounds: it would increase budget gridlock, slow the response to a crisis, jeopardize the state’s credit rating, worsen budget deficits and undermine critical state investments.

The amendment would limit general fund spending to 98 percent of forecasted revenues. The other two percent goes into a reserve account. Lawmakers could not spend above the 98 percent limit or use the reserves unless responding to an emergency. Further, any emergency spending would require a supermajority vote (60 percent) in both the bodies of the Legislature. When the reserve account reaches five percent of state revenues, a reduction in the state sales tax would be triggered.

Here is why state lawmakers should reject this amendment:

It would increase gridlock and gimmicks at the Capitol. To understand the problems the amendment would create, one needs only consider recent history. It took a 20-day government shutdown before Governor Dayton and the Legislature reached a deal on the FY 2012-13 budget. The painful solution included more than $2 billion in service cuts and creative financing schemes that no one liked (school aid shifts and the sale of tobacco revenue bonds). Had this amendment been in place, policymakers would have needed to reduce net general fund spending by $1.3 billion. In other words, they would have needed to find an additional $1.3 billion in cuts and shifts.

It would slow our response to a crisis. In the face of an emergency “involving the health, safety, or welfare of the citizens,” the amendment would require supermajority votes in the House and Senate to tap reserves or raise revenues beyond the 98 percent cap. This risks slowing the state’s response to a crisis and empowers a small number of legislators to block action on important priorities while trying to get concessions on unrelated issues.

It would risk weakening the state’s credit rating. The 98 percent amendment would likely hurt the state’s credit rating and increase its borrowing costs, similar to the supermajority amendment. The national credit rating agencies frown on states with constitutional restrictions that undermine their flexibility to address budget problems. Minnesota’s credit rating has already taken recent hits. The 98 percent amendment would raise another red flag.

It would make deficits deeper. This amendment effectively creates a tax cut account, not an effective rainy day fund, and it could make future deficits worse. The amendment requires the state to put two percent of revenues into a reserve every biennium, even in the middle of a recession. It wouldn’t take long for the reserve to reach five percent of revenue, triggering a mandatory tax cut. The state would face the perverse possibility that a tax cut would be triggered that would tip the state into deficit or deepen an existing revenue shortfall.

It would interfere with investments in the state’s future. This amendment would interfere with Minnesota’s ability to recover from a recession and invest in our future. For instance, putting two percent of forecasted revenue off limits would prevent Minnesota from taking full advantage of economic growth coming out of a recession. Other states could be rebuilding while Minnesota might be forced to make additional cuts to education, job training and infrastructure.

Our issue brief goes into more detail about the many drawbacks to this proposal and why it is wrong for Minnesota.

-Scott Russell

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