Governor Dayton’s State of the State Address
 

Below is a link to Governor Dayton’s State of the State address as delivered last night.

If you are a business owner, read it.
If you work in the private sector, read it.
If you pay taxes, read it.
If you receive benefits from the state, read it.

http://mn.gov/governor/newsroom/pressreleasedetail.jsp?id=102-54689

I would like to hear from you and what you think of supporting his $2 billion budget and tax increase.

Are his arguments valid or partisan?
Are his figures correct or spun?
Does he have spending cuts to accompany the tax increase?
Is growth of government and increased taxes helping you and your family?
Is Governor Dayton’s version for the future in the best interest in the state of Minnesota?

Respectfully,

Scott

Governor Dayton’s Budget Proposal: Higher Education

A significant increase is proposed for public higher education campuses and for financial aid (which affects public and private students). Whereas the overall state spending is going up by 7.6 percent, the higher education budget the Governor would like is an increase of 9.6%. Below are a few of the budget highlights:

• Calls for $250 million in additional spending
• UMN spending is temporarily being held until further review of administrative spending is completed
• MNSCU spending to be increased by $80 million
  • $46 million would be used to improve employment of graduates
  • $34 million to “retain faculty and staff”
• Increased spending to the Office of Higher Education by approximately $90 million (roughly 24%)
  • Most of the new money would be used to fund numerous and generous state grants
    • Grants would be extended to undocumented residents like the federal bill called “The Dream Act”

I support the suspension of increasing the funding to the UMN when just recently the University was nationally criticized for their extravagant administrative costs (read article here: http://online.wsj.com/article/SB10001424127887323316804578161490716042814.html). I also question the increased spending on grants that will be extended to undocumented residents when our current resident students are facing a hard time receiving funding and paying for the astronomically high price of tuition.

Respectfully,



Scott

Governor Dayton’s Budget Proposal: Snowbird Tax and “Corporate Loopholes”

In the Governor’s recent budget he proposed two major changes that look small, but will be cause of great concern.

 “Snowbird Tax”
This tax would be applied for non-Minnesota residents who remain in the state for 60 days or more in a calendar year. This tax would directly apply to retirees and vacationers who own a home in the state, but choose to live here during the summer months. The Wall Street Journal highlighted this excessive taxation in a recent article, which you can read here: http://online.wsj.com/article_email/SB10001424127887324329204578271720286958796-lMyQjAxMTAzMDAwMTEwNDEyWj.html#printMode. 

3 obvious areas of concern:

• Administrative costs
  • Adding new administrators (cost and growth of government) to collect and audit funds
• Hassel factor
  • How do you track a person’s days in state: Airline tickets? Gas receipts? GPS?
• Hurt vacation industry
  • Invitation to avoid Minnesota for the hassle of counting days within the state. Additionally, people would be spending less time and money here or risk going over the 60 day stay limitation and get taxed.

Foreign Operating Tax: “Corporate Loopholes”

Governor Dayton’s proposal includes taxing Minnesota corporations on the money that they earn outside of the state of Minnesota. His proposal suggests that the income currently made by a corporation outside of Minnesota is a “loophole” that corporations are using to subvert income taxes owed to Minnesota. This change will negatively affect numerous companies in Minnesota. HTI owns manufacturing plants in other states and internationally. Under Governor Dayton’s plan they would be required to pay income tax on their gross earnings regardless of where the plants are located.

At a time when other states are reducing individual and corporate income taxes in order to attract their business, Governor Dayton’s plan is an invitation to leave Minnesota.  You can read some of the tax reforms other states are doing here: http://online.wsj.com/article/SB10001424127887323968304578245720280333676.html.
 

Please contact me if you have any questions, concerns or suggestions.

Respectfully,

Scott

Governor Dayton’s Budget Proposal: K12 Education

It was a disappointment to read Governor Dayton’s budget and find that the major issues facing the state education system were not addressed. As rural legislator it’s frustrating to see the funding inequality to our schools due to location (rural vs urban and suburban). The Governor was quick to highlight the additional funding under his plan, but neglected to pay off the existing debt or make any meaningful improvements. Below are a few highlights of the Governor’s plan. Note the absence of any real reform.   

• Increases E-12 education by $344 million
  • $118 million General Education Money
    • Does not offer a reform of the per student formula
    • Increases the equalization disparity between outstate and metro schools 
  • $124 million Special Education
    • Cuts the gifted and talented programs
    • Special Education program already exceeds the Federal standards
  • $9 million Limited English Proficiency

• Does not pay any portion of the $1.1 billion owed to schools in the shift
• $500,000 to establish a “School Climate Center” which will be used to address safety and bullying issues.
  • We already have a Health and Safety program but currently it can only be used for issues like air quality rather than the physical safety of our children.
• School trust fund
  • No reform to the state trust fund program, which had been mismanaged for years by the DNR. Expediting permitting for mining in Northeast Minnesota could produce significant sums for out-state schools

Providing the best education is a constitutional requirement in Minnesota. The Governor’s proposed plan does not offer that to our students.

Please contact me if you have any questions, concerns or suggestions.

Respectfully,

Scott

Governor Dayton’s Budget Proposal: Taxes

The Governor claims that his budget contains significant tax reforms. Unfortunately, it is largely a tax plan consisting of higher taxes and increased spending. His plan does offer a reduced sales tax rate, but at the expense of a broad tax expansion on clothing and services. Additionally, his homeowners’ property tax rebate does little in the way of reforming a complicated and burdensome property tax system that does not help renters or commercial business owners. Below are a few highlights of the Governor’s new tax plan under his 2014-2015 budget plan:

• $2.1 BILLION of NEW sales taxes, including
  • Clothing over $100 per item (coats, shoes)
  • Admissions and memberships (health clubs, YMCA)
  • Over the counter drugs (Advil)
  • Personal care services and instructions (haircuts)
  • Legal accounting (tax services, family will)
  • Auto services (oil changes, auto tune ups)
  • Online purchase (Amazon, Ebay, iTunes)
  • See comprehensive list here: http://www.minnpost.com/political-agenda/2013/01/taxed-or-not-heres-list-items-and-out-daytons-sales-tax-plan
• Income Tax Changes
  • 2% income increase on:
    • $250,000 married, $200,000 Head of Household, $150,000 individual
    • Would make MN the 4^th highest income tax state in the nation
    • “Snowbird tax” – would extend income tax to part-year residents who maintain a house in Minnesota for at least 6 months
    • No reform
• Real Estate Tax
  • $500 tax rebate for FY 2014-2015 to all Minnesota homesteads
    • Zero rebate for renters
    • Zero Rebate for commercial or recreational real estate
    • No reform on homestead, commercial and recreational real estate taxes
• Other Significant Tax Changes
  • Temporary suspension of automatic annual increase on commercial statewide property tax (real estate), no reform on underlining tax
  • $.94 per pack additional tax on cigarettes
  • Significant increase LGA funding for St. Paul, Minneapolis and Duluth

I would support a reform of our current tax system; in fact I believe it is much needed. However, I believe that we should focus on reducing our overall tax burden, not simply increase it by over $2 billion and call it reform.

Respectfully,

Scott

Governor Dayton’s Budget Proposal

Governor Mark Dayton unveiled his 2014-2015 proposed budget this past Tuesday. The budget of $37.9 billion is roughly an 8% increase from the previous budget. His proposed budget calls for a tax increase of $3.7 billion, but little in the way of spending cuts or tax reform and no reduction in the size or growth of government.  For every $1 in spending reductions, the Governor raises $16 in new taxes. Below are a few highlights of the Governor’s proposed budget:

• Increased budget from $35.2 billion to $37.9 billion
• $3.7 billion of new taxes and only $225 million in cuts
• Largest budget increase ever proposed by a Minnesota Governor
• 2 year freeze on tax rebate for all homeowners
• $80 million increase in LGA
• $2.1 billion of NEW sales taxes on goods and consumer services
• $.94 per pack additional tax on cigarettes
• 2% increase income taxes for married  $250,000; HoH  $200,000; and individual  $150,000
• Increased income tax to Minnesota’s “snowbirds” through a prorate income tax base on the number of days they are present in the state
• .25% transit tax to 7-county metro area to go towards buses and rail
• New taxes on online purchases (“Amazon” tax) and digital downloads
• Fails to pay back the $1.1 billion school shift, pushing the pay off date to the 2015-2016 budget

On average, this budget would collect over $389 more sales tax from every Minnesotan. The tax increases proposed will primarily impact the middle class, already stretching their budgets to make ends meet. In the following weeks, I will send further break downs, examining the different areas of the budget that will be impacted like education, business, transportation and real estate taxes.

 It is important to note that this is not the final budget, but an outline for potential legislation that we should expect to see this session.

Respectfully,

Scott

RE: Redefining Marriage

Over the past two weeks, I have received numerous of emails from concerned constituents requesting that I do not support any bill to redefine marriage in Minnesota.  I believe they are in response to an email sent out by Minnesota for Marriage. Below is my position on the issue of Marriage in Minnesota:

• I do not believe that the Marriage Amendment’s defeat was a mandate to legalize same sex marriage in Minnesota.
• Under state law, Defense of Marriage Act (DOMA), Minnesota continues to recognize only a marriage between one man and one woman.
• I have not supported nor will I support the repeal of DOMA or any bill that may be introduced to legalize marriage between same sex couples.

I believe that when an elected official knows their position on a particular issue, the public has a right to expect an honest and straight forward answer to inquiries regarding that position. With this message, I am trying to fulfill that expectation and respond to the emails I have been receiving.  

Respectfully,

Scott

RE: Beginning of the 2013 Session

Today marks the start of the 2013 Legislative Session. I intend to send out a weekly update as I have the past two sessions. You can look for them to arrive early of each week. I encourage you to with any questions you may have.

This past election cycle brought a change of leadership in both the House and the Senate. Because of this, my committee responsibilities have changed. I will now be serving on the Finance Committee, Sub-Committee on Elections, Capitol Investment and Rules and Administration Committee.

As we move forward into this new legislative year, I hope that the new majority party will honor their opening day remarks. As related by our new Majority Leader Senator Bakk: “We’re going to have our differences, but as I think back [on] the spirit of our debates, [they] should always be aimed at finding solutions and common ground, not gridlock…challenges today represents the start of our opportunity to confront these challenges and build a better future for Minnesota.”

I look forward to working with all the new members in the Senate to work for a more prosperous Minnesota.
 

Respectfully;
 

Scott