GOP Priorities set: handouts to wealthy people and corporations first, handouts to wealthy people and corporations second, jobs last [UPDATED]

State Senator Julianne Ortman has laid down the law:

Let me be very clear: Before we even consider a vote on a Stadium to benefit one business enterprise, we must secure permanent tax relief for ALL Minnesota businesses and property tax payers.

So what’s in Ortman’s tax bill that is so critical?

$299 million in tax cuts that largely go to the wealthy and corporations over the next three years ($104 million in 2012, and the rest over 2013-14).  The major provision is a phasing out of the state property tax on commercial and seasonal recreational property — a total of $173 million.

The 2012 cuts are paid in the Senate bill for by transferring $104 million out of reserves (on top of the $416 million that the Senate has already offered to transfer out of reserves to pay back part of the K-12 school shift).  There is no payback plan specified for the next budget cycle, so the $195 million will be added on to the existing $1.1 billion deficit.  The House version of these tax cuts finances them on the backs of renters, by slashing the tax credit low- to middle-class renters receive every year.

To summarize:  in order to give tax cuts to wealthy Minnesotans and corporations, legislative Republicans are either  going to drain reserves this year and add to the deficit in the next budgeting cycle OR raise taxes on working families.  That doesn’t sound like a good deal to me.

And only if they’re allowed to accomplish that — and if they get Governor Dayton to cave to their demands for an obscenely small bonding bill — will they move on and give the stadium bill a vote on the floor of both the House and Senate.  There’s one word that describes the performance of the Republican majorities this session:  failure.  It’s time for some new voices in St. Paul.

[UPDATE]:  The conference committee report detailing the final bill agreed to by members of the House and Senate Tax Committees was released last night.  The revised bill is less bad than the original bills that passed both houses.  The total tax cut over the next three years has been reduced to $189 million, $48 million in 2012 and the remaining $141 million in the next biennium.   Instead of phasing out property taxes paid by businesses and cabin owners, the bill instead freezes the amount of taxes paid from these classes of property (today, the total take is indexed to the rate of inflation).  The cost of this proposal is $82 million over the next three years.

However, the revised bill still does not include any long-term financing mechanism.  The $48 million cost for 2012 will be financed from budget reserves and a Revenue Department fund transfer, while the $141 million in the next biennium will be tacked onto the existing $1.1 billion deficit.

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17 Responses to “GOP Priorities set: handouts to wealthy people and corporations first, handouts to wealthy people and corporations second, jobs last [UPDATED]”

  1. First of all, it’s a projected budget deficit. Second, I see no handouts for wealthy people in the link you provided. Third, fostering a better business climate in this state will result in more revenue and more jobs. Property taxes for businesses have skyrocketed, and releif is required to keep businesses in the state from fleeing. And fianlly let’s not forget that Governor Dodo vetoed the school payback, so that doesn’t fit into the reserve equation that you cited.

    I agree with one szentiment. We need to replace someone in St. Paul. Unfortunately, we have to suffer through a few more years with this goofball in the mansion.

  2. Please skip the name-calling, John. Part of the problem here in MN and the entire US of A is the lack of civility.

    I AM a business owner. The myth is that businesses will invest in new workers, products, etc. Coming out of the Great Recession, I can tell you that many business owners are worried about catching up, paying down their lines of credit. Passing property tax relief or giving tax breaks to business owners like me (we’re under $2 million in revenue) will not give us an incentive to hire more workers. It won’t mean much of anything.

    The biggest beef I have is that one group of people has decided to hold the state’s future hostage if they don’t get everything they want. Maybe months should not have been wasted on the Marriage Amendment, the Castle Doctrine, other forays at our state constitution. Seems to me the budget and bonding should have been the Number One priority. I wager they’re playing a dangerous game that could come back to bite them at election time. Personally, I don’t think either party is showing any courage of their convictions. Everyone is too worried about November to take a stand on anything of import.

    • I think they are looking bigger companies than yours or mine for job growth. And there is something to be said for having lower business taxes to attract more business, and put more people to work. We’re not saying every business will hire more people, just because the ahve tax some tax releif. But a business may expand, and new businesses may show up if the tax situation here is so much higher than neighboring states.

      Also, it seems that Sean beleives reducing property taxes on cabin and such is jsut for the wealthy. I personally know many folks who have had to sell their lake shore property due to the property taxes, and these folks were anything but wealthy.

      As to the comment about the Governor, what he’s doing is just palin stupid. And I call them like I see them. He’s probably to most ignornat partisan hack we’ve had in the mansion, ever. Maybe Jesse was more ignorant. To think that he’d hold up payback to the schools, just because he doesn’t want the GOP to get any credit for paying them back is as partisan as it gets. He’s a hack, and will be replaced next time around. Seriously, a symbolic veto against voter ID. He already vetoed it once! We understand his position. Did he symbolically veto the mariage amendment, or is he suddenly for that?

      SO when you ask for civility, it starts with that clown. He needs to put the partisanship aside, stop crying over Ellen Anderson, grow up and do the right things for the state. The GOP is returning this state to fiscal balance, and he and DFL’ers like you folks need to realize that your socialist version of government has never worked, and never will.

      • The tax situation here is actually quite competitive, if you look past the base rates and look at what corporations actually pay.

        https://brickcity.wordpress.com/2011/04/13/setting-the-record-straight-on-business-taxes/

        I’m not necessarily opposed to reforming business taxes, but if we’re going to do so, we need to look at them in total and pass a complete reform package. Cutting these taxes with no plan to make up the hole in the deficit created by them is not being fiscally responsible.

        Yes, there are cabin owners of modest incomes. Overall, though, the distribution of people who own property in that class is going to skew more wealthy than the population as a whole.

  3. It must be very exhausting and emotionally draining for you to be such an angry person.

  4. By the way, excellent spelling! I like your “palin stupid”– must be a Freudian slip, huh?

    • You’re funny. You call me angry than go nuts over a typo. Hilarious stuff. When a leftist has no argument they pick out a typo.

  5. Entertaining comment section. Thank you, Jennifer, for weighing in. I have heard similar responses from local business owners. They do not see this being of much benefit to them. However, they do see it as a potential risk to them since the outstate giant corporations are hurting the local ma and pop shops that keep our communities vibrant. Also, they have indicated more interest in homeowner property tax relief and local job creation that puts money in customers’ pockets. The tax breaks for big business has been proven ineffective in American job creation. We need a level playing field and effective government oversight that compliments a thriving business environment, quality education and consumer protection. It is unfortunate to see such gridlock between the 2 major parties. Its time for the voters elect representatives who truly want to serve the public and make government efficient and effective. Working together to seek consensus, versus 24/7 campaigning.

    • Here we go bashing corporations again. If mom and pop shops are so great, then they wouldn’t get beat out my bigger stores. The problem with small shops is they can’t compete in buying power so prices are higher. People want low prices. You can carp about these all you want, but that still doesn’t help bring business to the state. And business is far more than just retail. If you want to bring more manufacturing to this state, which are REAL job providers. Retail provides some jobs, but manufacturing is where the big numbers are. Mom and pops don’t hire a lot of people. We have got to start fostering a business friendly environment in this state, period. Confiscatory tax policies are not going to bring manufacturing to the state. Every time Dayton opens his mouth about raising revenue, he hurts our chances of bringing more employment to the state. As it is, manufacturing has enough pressure from overseas competition on labor, nailing them with higher taxes means margins are even slimmer, and there’s just no way to model a profitable business plan under these conditions. It’s high time someone with a modicum of economic sense was in charge at the DFL. It’s the reason I left the party, or should I say they left me.

      • Please do not bash my comment that merely reports the statements of concern I have heard from small business owners from both major political parties. As a state, we need to be competitive in many areas. We have attracted and maintained Fortune 100 companies due to the rich quality of life, the blend of arts and culture, the highly educated workforce, the Mississippi river, major investment in research and development, too notch health care, Lake Superior, well maintained infrastructure, kindness, tolerance and consensus-driven governance. This rich Minnesota culture has been infected with the divisive and extreme agendas that have crippled other states and our national governance. We must

  6. No one is bashing corporations. John, our company is a 30 year old corporation, and we have over 20 people on staff. What we REALLY need are good roads for transporting our products, well-educated employees, and abundant & clean nature for our precious time away from our work worries. We are proud of the number of corporations such as General Mills, 3M, Target, Medtronic, etc…. But the majority of businesses in MN and in our country are SMALL businesses. According to the SBA, small businesses are defined as 500 employees or less. They also say that small businesses:

    Represent 99.7 percent of all employer firms.
    • Employ about half of all private sector employees.
    • Pay 43 percent of total U.S. private payroll.
    • Have generated 65 percent of net new jobs over the past 17 years.

    Also, according to the Small Business Admin., there were 494,788 small businesses in MN in 2008.These firms account for 49.5% of private sector jobs and make up 97.9% of the state’s employers. Here’s the link if you want to check it out:

    http://www.sba.gov/sites/default/files/files/mn10.pdf

    So, John, those mom & pop businesses you reference are more than retail, more than a blip. They are truly the economic engine in our state. It’s not the Walmarts and their ilk.

    • If no one is bashing corporations, perhaps you suould re-read the title of this post. I don’t tax cuts to business as a handout. Businesses pass all of thier taxes onto others who buy their goods and services, and they can be more competitive if they have a lower tax burden placed on thier bottom line. If we’re going to raise revenue in this state, we have to do it by expanding the tax base. And you do that by creating a business friendly enviorment, which in turn creates economic growth, increased job numbers, and increased revenue growth for the state.

      • Cripes. I work for in finance for a $36 billion company. I’m not opposed to corporations by any stretch of the imagination. What I am opposed to is continuation and expansion of policies that put the interests of corporations ahead of broader prosperity. By and large, corporations have fared far better over the last decade than the people. Creating a “good business climate” is about a lot more than tax rates — it’s about having educated workers and good transportation infrastructure and safe streets, among many other attributes. You can’t out-Mississippi Mississippi, and I’m not sure why legislative Republicans want to make our state more like states that consistently rank at the bottom of many economic metrics.

      • Ah, the tired old Mississippi rant. If we don’t raise taxes we’ll be Mississippi. It’ll get hot and muggy, and hurricanes will ravage the shores, and shanty towns will appear like weeds in a bean field. The gnashing of theeth will keep all awake at night. If only we could have more tax collections, why government can save us all. Sorry, that dream never works.

        • We don’t need “more” tax collections, we need smarter tax collections. As a state, we have an overly complex tax code that creates inefficiencies and distortions in the market. We can and should strip out a lot of the deductions and credits which don’t do anything to stimulate the economy and lower the rates overall. That’s an approach that I know would have bipartisan support. Instead, Republicans have pursued unbalanced tax cuts that benefit only a few.

  7. Story on ‘CCO right now about companies doubling their workforces– manufacturers in MN. Factory orders & hiring are climbing statewide. Companies are looking for workers–there is a shortage in some industries.. So, John, you talk about manufacturers, here’s evidence that some are thriving. I’m sure the story will be on the WCCO website. These employers sound excited, not outraged by high taxes. (By the way, it already feels like Mississippi here in the summer!)

    • Good, so our tightening of the fiscal belt is working. Let’s keep it up by making MN even more competitive.

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