Governor Tim Walz (DFL) announced his revised budget on March 22 for the 2020-21 biennium (July 1, 2019 through June 30, 2021). The budget was revised due to the predicted economic slow down. Forecast numbers released late in February suggest that the state’s surplus will be closer to $1 billion, a half a billion less than the prior forecast. The revised budget totals $49.35 billion for the biennium. This is just the first step in the budgeting process.
The governor’s new budget reduces new spending by $131 million. This budget will still leave $562 million of the surplus unspent.
Walz’s proposal for a phased-in 20 cent gas tax hike remains in his revised budget to pay for needed road and bridge repairs. Thirty years ago, in 1988, the state’s gas tax was 20 cents per gallon. Over the years small incremental increases resulted in a gas tax of 28.6 cents per gallon in 2012, which is the current gas tax. The proposed phased-in increase will amount to a 70% increase. Walz is also proposing increases in sales tax and tab fees to raise enough revenue to upgrade an aging infrastructure.
Walz argues gas taxes can only provide enough revenue for infrastructure upgrades and repairs if the taxes are adjusted to keep pace with the cost of construction. Forty percent of the state roads are 50 years old or older and 50% of the state bridges are over 40 years old. The DFL wants a reliable and sustainable funding source, like the gas tax, to insure funding for needed infrastructure upgrades now and into the future.
In the list of Fillmore County’s 2019 legislative priorities, it is stated that “Fillmore County supports long-term sustainable funding dedicated to the Highway User Tax Distribution Fund (HUTDF).” The county also supports the dedication of all sales tax revenue generated by the sale of auto parts for transportation purposed through the HUTDF.
At the March 26 county board meeting, commissioners unanimously approved a resolution, to be sent to the Minnesota legislature, in support of long term sustainable funding for transportation.
Republican legislators want to pay for infrastructure repairs and upgrades with the surplus; they insist no tax hike is needed when there is a surplus.
The House is DFL controlled and the Senate is Republican controlled (with a three seat majority). Both will soon introduce their budget proposals.
Walz’s budget includes the continuation of the current state’s health care provider tax. This tax will expire at the end of the year if it is not renewed. Fillmore County’s Public Health department supports the continuation of the 2% provider tax. Republican legislators want to let the tax expire.
Walz argues that if the provider tax were to expire, the state will be in danger of draining the Health Care Access Fund, threatening health care for Minnesotans enrolled in Medicaid and Minnesota Care. The governor also put forth his health care proposal, ONECare Minnesota Plan, which is included in his budget. It could be an option for people who do not qualify for Minnesota Care or Medical Assistance. House minority leader Kurt Daudt insists the governor’s plan will raise health care costs by over $1 billion for Minnesotans.
The governor’s budget proposal also includes increases in spending for higher education and funding for child care assistance and a pre-kindergarten program. He wants to return $142 million of unused health care reinsurance funding to the general fund. Walz suggests the state health care reinsurance program, which pays insurance carriers to reduce premiums for individuals using the individual health insurance market, should be replaced with a direct premium subsidy to individual consumers.
Bills passed in the House
Recently the Minnesota House passed a bill that will require drivers to use hands-free devices for phone calls. Use of handheld devices would be illegal while driving. This bill passed with bipartisan support. Use of a handheld cell phone is considered to be a form of distracted driving. One Senate bill that is being debated, which was introduced by a Republican, would allow handheld use of a cell phone while driving. However, the bill calls for severe penalties if the driver using the handheld device causes an accident. The user would be treated similar to a drunk driver if bodily injury or death results from an accident.
The House also recently passed an opioid bill to be funded by pharmaceutical manufacturers and distributors. House minority leader Daudt argues that this will raise health care costs. An opioid bill is also being considered by the Senate.
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