The Minnesota State Senate passed its omnibus tax bill without fanfare Wednesday. SF 3327 is a policy-oriented bill with only a small budget impact. The Senate omnibus tax bill generates $3.3 million in FY 2011, essentially a tiny infusion for the state’s ailing cash flow account.
The Senate omnibus tax bill includes mostly noncontroversial provisions sought by the Minnesota Department of Revenue. “It’s a pretty lean tax bill,” said Committee Chair Thomas Bakk.
This is the third major tax bill passed by the committee this year, with the other two making $106 million in cuts in aids to local governments (which was later incorporated into the supplemental budget bill) and the “job creation” bill that included investment credits and economic development provisions. Most years, aids to local governments, economic development and technical provisions are usually all found in one omnibus tax bill.
It could be the last Senate Tax Committee meeting of the session. Bakk said no more hearings were scheduled.
The House Tax Committee will discuss their omnibus tax bill on May 3.
Last year, the legislature passed an omnibus tax bill that raised revenues as part of a balanced approach to address state budget shortfalls, in addition to cuts in spending. That bill was vetoed by the Governor.
However, events could bring the committee back. For instance, if the Minnesota Supreme Court rules that Governor Pawlenty overstepped his authority in use of unallotments last year, that would reopen a range of taxing and spending decisions.
Federal funding also leaves a large question mark. Both the Governor’s budget and the House targets assume an extension of additional federal Medical Assistance funding. Minnesota would receive an estimated $408 million in FY 2011, but Congress has not yet approved that money. Soon policymakers will need to come up with a contingency plan if those dollars are not ultimately approved by Congress, and that provides another opportunity to discuss raising revenues as part of a more balanced approach to the economic crises that helps Minnesotans get through these tough times and better positions the state for when prosperity returns.
–Scott Russell & Nan Madden
