Future Financial Trouble Overshadows Start to 2024 Session
Lawmakers have returned to the State Capitol to begin the 2024 legislative session, and you can expect numerous legislative topics to be discussed over the next three months. Near the top of the agenda would be law fixes and capital investment legislation.
Minnesota’s budget was set last session. At that time, I was very concerned that the legislative majority was not only spending too much, but that too much of it was permanent and long term. By session’s end, a nearly $20 billion state budget surplus was gone, taxes were raised by another $10 billion, and overall state spending had increased by roughly 40%.
By creating new layers of state government, we’ve seen huge new state agencies birthed that include large numbers of additional state employees. Also included were massive pay raises, as members of the Walz administration—who already had six-figure salaries—got massive bumps in pay, up to $32,000. With all the inflation and people struggling to make ends meet, are you getting a pay increase like that?
Since last year, we have received updates from our state’s financial experts. The first is that a significant error was made in the tax omnibus bill from last session. It amounts to a $352 million problem that, if left unfixed, will force 76% of Minnesotans to pay a higher tax bill. It appears there is bipartisan agreement to rectify this situation quickly at the beginning of session. I am supportive and hopeful we’ll do just that.
Our state’s fiscal experts also found that a $2.4 billion budget surplus exists for the current biennium. However, they’re also projecting a $2.3 billion budget deficit beginning next year for the 2025-2026 budget cycle. In other words, there’s really no current surplus at all.
I am extremely upset at what has happened with our state budget. Pushing our state into a deficit was one of my greatest concerns last session when I witnessed the out of control spending by my Democrat colleagues who hold control of our state. Sadly, we have all watched an almost $20 billion budget surplus get turned into a $2.3 billion budget deficit. That’s going to cause a whole lot of hurt next year – hurt that was totally avoidable had fiscal restraint been used. There is no excuse for this!
It’s my hope this session that we will use some fiscal wisdom with the surplus that exists for the current budget cycle and stay away from any more long-term spending. In my mind, if the surplus dollars must be spent, it should address core issues that need fixing such as nursing home funding. The legislature put a small financial band aid on this problem last year, but more needs to be done in order to prevent more critical care centers like these from closing.
Speaking of core issues, another use for the current surplus would be to use one-time funding to pay for shovel ready critical infrastructure projects such as wastewater treatment facilities – a high priority need for many communities throughout our state. For example, Albert Lea is asking the state for $40 million (for an $80 million project) to build a new plant. Without it, sewer and water bills will triple if not quadruple for residents and businesses. Clarks Grove and Manchester have similar needs, as do many communities across our state. Why not put that surplus into things that will actually lower the cost of living and doing business for everybody. These are also projects that I will be pushing for in this year’s bonding bill.
We also must address the School Resource Officer (SRO) problem this session, and the earlier the better. Last year, approved legislation limited how school resource officers are allowed to de-escalate aggressive or violent situations, which caused dozens of law enforcement agencies to pull SROs from schools across Minnesota. We should have made needed changes during the interim as the removal of SRO’s made our schools less safe for students and teachers. All of us prioritize school safety, and we should be able to work together on a commonsense solution to this problem.
I am looking forward to representing our local communities in the state legislature this session. As always, I am interested in hearing your thoughts on legislative topics. Feel free to contact me any time at rep.peggy.bennett@house.mn.gov or 651.296.8216 to share your thoughts!
In their haste to spend a nearly $20 billion state budget surplus, raise taxes by another $10 billion, and increase overall state spending by roughly 40%, a major error was made by the Democrats who crafted taxes legislation last year. It amounts to a $352 million problem that, if left unfixed, will force 76% of Minnesotans to pay a higher tax bill. It appears there is bipartisan agreement to rectify this situation quickly at the beginning of session, and I am hopeful we’ll do just that.
Many of us are also shaking our heads at other problems the state is facing thanks to Democrat mismanagement of the state’s finances. Thanks to their decision to blow through a mammoth surplus and massively increasing state spending, Minnesota is now facing a multi-billion dollar budget deficit in the next budget cycle. We also created new layers of state government, huge new agencies with significant numbers of new employees. And then there’s the pay raises, as members of the Walz administration—who already had six-figure salaries—got massive bumps in pay, up to $32,000! Who else gets this kind of raise? All of this is extreme, out-of-control, and not what the average Minnesotan wants from their legislature.
Democrats held a press conference recently wanting to make Minnesota a sanctuary state. This means we will likely have that debate as well this year, even though this extreme policy is not supported by the majority of Minnesotans. We don’t need to turn Minnesota into a magnet for illegal immigration and have the health care, public safety, and other strains on our government that comes with it. The majority of the public wants a secure border, and does not want to seek even more ways to continue over-burdening our system.
In November, the Minnesota Management and Budget Office revealed the total cost for the loan that was approved by the legislative majority to renovate the State Office Building: $730 million. Of that amount, Minnesota taxpayers will be charged $275 million in interest alone, which was almost the same amount used to renovate the State Capitol. Sadly, the majority party chose extravagance over less costly alternatives, and it should revisit this fiscally irresponsible decision on behalf of the taxpayers who are on the hook to pay for it.
There’s also talk that the Walz administration will adopt California’s “Clean Transportation Standard.” Doing so will raise fuel prices by at least 50-cents per-gallon and will cost southern Minnesota’s families between $600 to $800 more each year. Not only will these tax increases disproportionately hurt the working poor but will also hurt our local economy and border businesses.