Bennett calls for tax relief, repairing roads and bridges

The $1.87 billion projected budget surplus Minnesota has for fiscal year 2016-17 is a sign of a healthy economy, two local lawmakers said Thursday.

The surplus is a sign that the state is doing well but is taxing at too high of a level, said District 27A Rep. Peggy Bennett, R-Albert Lea.

“They’re struggling,” Bennett said of middle-class taxpayers. “Other costs are rising, such as health insurance. Anything we can do to put money back to middle class families through tax relief, that should help them.”

The announcement on Thursday was good news for the state of Minnesota and the overall health of the economy, said Sen. Dan Sparks, DFL-Austin, in a press release.

“It’s clear that businesses are doing better, creating more jobs for our residents, and that we must continue to practice sound fiscal responsibility in managing the state,” Sparks said. “I look forward to working together with my colleagues to keep Minnesota on strong economic footing.”

The final surplus will be set after the new year.

Sparks said in addition to shoring up the rainy day fund, Minnesota has repaid schools after borrowing from K-12 education to balance the state budget during fiscally challenging years.

The surplus should go toward repairing roads and bridges and middle class tax relief, Bennett said.

She said a bill with $2 billion in tax relief passed through the Minnesota House of Representatives earlier this year that includes property tax relief for farmers, the phasing out of Social Security taxes and tax relief for veterans, young families with children in school, college students and teachers coming back to school for their master’s degree.

The bill also included a permanent phaseout of the statewide business property tax that Bennett said will help local businesses by helping them become more competitive with Iowa businesses.

Bennett said the bill is delayed in committee due to Democrats requesting an increase in the gas tax.

Gov. Mark Dayton said Thursday that an increase in the gas tax was “dead” with the surplus.

Bennett said she hopes the legislature adopts the bill this year when it convenes in March.

She said the surplus showed the state is healthy, but has room for improvement.

“We’re taxing them too much,” Bennett said of the state’s tax system.

She said a $7 billion, 10-year transportation bill has also stalled in committee that includes increasing funding for rural highways by realigning existing sales taxes on auto parts and rental cars and moving them over to a dedicated fund for roads and bridges.

Bennett said it is the House of Representatives’ response to not raising the gas tax.

The Minnesota Management and Budget Office projects a balance of $1.871 billion, up from $865 million at the end of session, which was in May. One-third of the surplus by law has to go to reserves, leaving an available surplus balance of approximately $1.2 billion for fiscal year 2016-17.

Revenue is forecast to be approximately $42.72 billion, a 0.2 percent increase over end-of-session estimates.

Current spending is forecast to be approximately $41.59 billion, $249 million below previous projections.

Local government aid funding is one of the few budget issues still in the air, said Robert Broeder, LeSueur mayor and president of the Coalition of Greater Minnesota cities, in a press release.

“City leaders across the state are hopeful that with a $1.8 billion budget surplus, legislators will seize the opportunity to invest in critical needs in Greater Minnesota, starting with an increase in local government aid,” Broeder said. “Today’s surplus announcement proves that legislators have no excuses — they need to finish this unfinished business and pass a modest increase in LGA funding,” he said.

“Lawmakers should not squander this historic opportunity — now is the time to invest in Minnesota communities, and the result will be better roads, safer neighborhoods and stronger businesses.”