What to do with all that money sitting around
Minnesota’s economy is still shaky – just like every other state in the U.S. – because of uncertainty in Washington. Despite the fact that negotiators were able to unite on a budget agreement Tuesday, it’s still hard to rely on any kind of consistency out of D.C.
What is certain is that Minnesota will have a major budget surplus for the 2014-15 budget cycle (its second consecutive surplus). And while we won’t know the exact amount for a couple of months, we do know the state will use a portion of the projected $1.086 billion surplus to pay back the rest of Minnesota’s school budget shift. Another chunk – reportedly $15 million – would be transferred to the state’s airport fund, another area from where the Legislature had borrowed money (2008).
That leaves about $825 million, give or take.
So, what to do with all that money.
Some say give it back to the taxpayers (remember Jesse checks). Sorry, not going to happen.
We say use some of it to put into programs like the 5% Campaign, a grassroots effort to get pay raises for the dependable people who work so closely and personally with the elderly and disabled. If anyone deserves a pay hike, it’s them.
Having a surplus this large also means the governor and Legislature should strongly consider repealing the warehousing tax, and the business and farm equipment repair taxes. It’s easy to say, but will it happen during the 2014 session? Republicans and Democrats are sure to bump heads about that next year. That’s OK, as long as the end result is tax reform. Don’t be surprised if Gov. Mark Dayton and the Democrats pull some taxes off the table in 2014; it is, after all, an election year.
Things are looking better on the job front as well, as Minnesota has added more than 13,000 jobs since August and more than 122,000 since 2011. It’s not a given that eliminating some taxes on businesses would add to those numbers, but it sure would be a step in the right direction to keeping the businesses we do have here, where they belong.
Higher costs on businesses could potentially result in a drag on economic growth and development, and we don’t want to take a step back in that area.
The Minnesota Chamber of Commerce is calling for Dayton and the Legislature to commit now to repealing new taxes early in the 2014 session, and we agree. Repealing taxes would tie in nicely with Dayton’s “Un-session” agenda for 2014.
Legislators have a problem, but it’s a good one to have. If they can come together they are in a position to really allow the state to turn the fiscal corner in 2014 while spreading some money to underfunded areas.
It can do both. It’s their job.