Our take on HF 3172, the Supplemental Funding Bill, Passage

This bill was debated and passed in the Minnesota House this week. We will be scoring it negatively (A YES is bad, a A NO is good) in our 2014 scorecard. We’re doing this for the simple reason that we thought last year’s spending was too much and now here comes MORE spending that is being spent simply because State government has it. And it has it because it over taxed Minnesotans.

In this bill is payment for union contract increases that were signed by the administration AFTER the budget went into affect last year. Do you think that bargaining was affected by the fact that there was a budget surplus available for the taking?

When some members challenged this pay increase on the floor of the House yesterday, they were pushed back with majority cries of “who are you going to lay off?” “We’ll be laying off prison guards and endangering public safety!” The problem with that argument is that if salary increases weren’t built into last year’s budget bill, would the DFL planning on laying people off? Of course they weren’t.

Where else did the money go? In their haste to create MNSure, the legislature and Governor Dayton bankrupted the Health Care Access Fund with the Medicaid expansion; billions are now needed to fill that hole, now and in “the tails.” Thanks Obamacare!

There were also a number of random spiffs for various constituencies. One provision paid for free buses on Election Day, something expected to benefit mostly urban areas.

Another provision created a potential slush fund for the Bureau of Mediation Services, the small agency that mediates state worker union grievances. Now they can work on public policy issues with money from outside groups. Like unions. What could possibly go wrong?

Yet another provision was a statewide mandate for 3 sort recycling. This is at a time when many cities moving to single sort recycling. This last one was stripped out with an amendment on a bipartisan vote.

And speaking of recycling, bills with random provisions like this are often called “garbage bills.” That may sound harsh but there was nothing good about this bill. Except for the surplus money and the extra costs associated with Obamacare, it wouldn’t exist.

Republican house members proposed their own version of a spending bill in the form of a delete all amendment. This alternative cut $72 Million from the DFL proposal but from our perspective it just nibbles around the edges of a bad bill. Like the tax bill a few weeks ago, HF 3172 must be added to last year’s big spending and taxing party.   It basically gave cover to some of their members who wanted to vote on selected provisions that they thought were important or for which a no vote would draw controversy.

For example, in this bill was the long in the making “puppy mill bill” which regulates pet breeders. Nobody wants to have to vote against puppies!

Despite such a wide variety of subjects in this bill, and the HHS and Healthcare Access Fund provisions, when legislators tried to reform a few pieces of MNSure statute, they were pushed back with the “germaneness” rule, which states that an amendment must fit the subject of the bill. With the crazy number of subjects in this bill, invoking that rule against any amendment was laughable. That rule should be renamed the “shut up we don’t want to talk about it” rule.

May 19 (or whenever they pull the plug on this session with a hearty SINE DIE) can’t come soon enough.

What we told legislators who asked us: HF 1777

We get it all the time. “How are you going to score this vote?” This time it was the bill which included “tax conformity” making state tax policy square with federal tax policy so that Minnesotans paying taxes next month don’t find themselves with higher tax burdens due to credits and other provisions yanked out in last year’s Taxapalooza Bill HF 677.  This is the infamous bill that not only removed credits important to families like the adoption tax credit but also gave us the warehouse tax, other business to business taxes and also the strikingly lavish $90M Senate Office building.

HF 1777 repealed some of those onerous taxes and will lift some of the pain on individuals, businesses and families. Is it enough? No. But it is a start.

We understand why some legislators in their frustration might want to vote no on this bill. It doesn’t give money back. It only lessens some (not even all) of the worst excesses of last sessions tax bill. Here are some of the things the bill doesn’t contain:

  • An increased standard deduction for married joint filers, which would have saved 640,000 married, couples an average of $112 per return for tax year 2013.
  • Although the bill contains the repeal of business-to-business sales tax that went into effect in 2013, it’s not retroactive, which would have returned $55.9 million to hardworking Minnesota taxpayers.
  • NO repeal of the Senate Office building.

The net result of the bill when taken together with the bill that was passed last session is a $1.7 billion tax increase.

It also adds in a couple of poison pills:

Last session, some school districts were allowed to levy without referendum for a portion of their allowable levies. This bill blows the lid off to include all school districts. We criticized the change last year as an end run around voters and now we oppose this expansion.

Secondly, in a major policy shift, the way that the budget reserves is recalculated. Instead of having a fixed formula based on general fund non-dedicated spending, it will instead be up to the Commissioner of Management and Budget to recommend what it should be. One can easily see this being manipulated in order to keep more taxpayer money in order for the state to have more flexibility in spending it without having to get approval for brand new programs.

Officials often like to tout bulking up reserves, as responsible fiscal management such as would be done with a family budget or a private business with a “rainy day fund.” The fact is that public finance is a wholly different activity. When government overtaxes and keeps this money in reserve, it is generally not used for “emergencies.” It is spent down over time by avoiding needed reforms that would reduce spending. From a macro-economic standpoint, the state is buying financial stability for itself at the expense of job creation and growth in the private sector.

But all that said, beleaguered Minnesota taxpayers deserved a break. They did not deserve the games they got from the DFL-led legislature. And so we told legislators who asked us, that we were preparing to score amendments to the bill (those that made the bill worse and those that made it better) and not final passage of the bill itself. In this case, we believe that the amendments tell the real story of this bill.


A simple question

pledgeTuesday, February 4 is Caucus night in Minnesota.  You can find out where to attend your local caucuses at the Secretary of State's office here.
When you go, you'll hear speeches and read letters from candidates for state offices.  When you are asking candidates about their stands on the issues don't forget to ask them the simple question that reveals how they feel about growing government versus growing the economy, growing government programs vs. growing private sector prosperity, enlarging the social welfare bureacracy vs. helping families.
Ask them if they will pledge to vote to oppose any tax increase. With a billion dollar surplus generated by the Dayton Administration Tax increases, this should be an easy promise to make.
Some candidates may promise to cut taxes, or to cut spending and taxes. We applaud any candidate who pledges to do more than oppose tax increases.
We've included a downloadable copy of the taxpayers protection pledge (below) and if your candidate will sign it, you or they can email us a picture to This email address is being protected from spambots. You need JavaScript enabled to view it. or tweet it to @taxpayersleague. We will verify all pledges we receive with the candidate.
If the candidate tells you "they don't sign pledges" just ask them the question, "will you promise not to raise taxes?" Record their answer and send it to us, and we will collect the responses from candidates for office from around the state. If you send us video or audio, we'll post it. If you quote them, we'll verify it.
If you, yourself are a candidate, you may sign the pledge and send it directly or use any of the means just listed to transmit it to us.

PDF copy of the pledge for Minnesota (Non-Federal) candidates.

Recycling proposal puts the cost burden of transporting trash on you


The draft cost-benefit analysis report released by the Minnesota Pollution Control Agency and prepared by an outside contractor makes it seem as if this deposit-return system could be set up in a way that would be self-sufficient. As cans and bottles are used and recycled, the money would simply be moved in and out of a revolving fund. But there are some serious potential costs that were either overlooked or which contractor and the MPCA chose not to mention in this draft.

The proposal states that unlike in other Statewide recycling systems, “recycling centers” are to be set up across Minnesota. There will still have to be quite a few of these set up across Minnesota in order to be not just convenient but reasonably accessible, especially in greater Minnesota.   Recalling the debate in the legislature on the question of where rural Minnesotans would obtain a photo ID if such was required just ONCE for voters over the age of 65 or even once every five years for those younger, can we expect a similar debate about how many of these recycling centers there should be across the state? After all, recycling will be done by most families on a monthly if not weekly basis, year round, during the hottest summers and coldest winters. How convenient and accessible these places are is important.

Proposed Bottle Deposit Law is a tax on your time as well as your money

Picture of a Car Trunk with sticky bottles and cans in itYou may have read recently of a discussion over a proposal to enact a bottle deposit law in Minnesota. Other states like Michigan, for example, have had systems like this for years.   The goal is to force people to recycle the deposit items more consistently by adding a fee on to the price of the item. For example, a 10 cent fee added to each bottle of a six pack would mean an additional 60 cents per six pack, which would be redeemed when the bottles were recycled. In Michigan the law requires stores to provide the means for recycling. When it was first enacted, most stores kept a counter busy with some unlucky employee wearing rubber gloves to sort the cans and bottles into piles while somebody else totaled up return receipt or dispensed the cash. Eventually, however labor costs and technology produced the deposit return machine. Insert bottles here, get cash (or a receipt) there.