In 2005, Minnesota ranked 20th highest in total state and local taxes as a percentage of income and 12th highest in total state and local taxes per capita.

At 11.4 percent of state personal income, Minnesota was 0.88 percent higher than the national average (11.3 percent of personal income). State and local taxes per capita ($4,088) exceeded the national average ($3,698) by 10.5 percent.

In summary, these 2005 state and local rankings for total taxes show that Minnesota is no longer at the top of the rankings but is still above the national average for state and local tax burden per capita and state and local tax burden as a percentage of income.

A new report from the Minnesota House of Representatives Fiscal Analysis Office, "FAQ on Tax rankings and Minnesota (Based on US Department of Commerce Data) FY2005" includes how the rankings are computed, sources of the data, and gives details on how Minnesota fits in.

The report can be found at:

http://www.house.leg.state.mn.us/fiscal/files/08taxrankings.pdf

The state capital is a busy place these days. I was there for the discussion about the outdoor tax on Thursday morning.

Talking to Representative Joe Hoppe, I asked if he was hearing anything new in the discussions for and against the proposal that would allow voters to decide on Nov. 4 if they would like to raise the state sales tax by three-eighths of one percent and in so doing amend the state constitution and channel the money to fund outdoors programs, the arts and the environment. He said he wasn't anything new. It was all a rehash of last year's arguments.

The idea that any of the same arguments would lead to legislators changing their mind seemed ludicrous, but I guess they just wanted to get on the record.

Hoppe didn't vote for the proposal and said he thinks elected officials should decide on tax issues because that's what they're elected to do. He was also not so sure that the arts should be added to the bill.

The measure would increase the sales tax on a $10 purchase by about 3.8 cents, according to a Star Tribune report. Money generated through the added sales tax would go to environmental groups and arts, hunters and public television.

Transportation funding changes

The transportation finance bill speeding to the House floor has been changed.

Sponsored by Rep. Bernie Lieder (DFL-Crookston), it still includes a 5-cent gas tax increase, an increase in tab fees and a potential one-half cent gas sales tax increase in the seven-county Twin Cities metropolitan area.

However, before receiving approval of the House Taxes Committee, a provision to index the gas tax increase to the rate of the consumer price index has been removed. Instead a gradual gas tax surcharge, topping out at 3.5 cents in fiscal year 2013, would be used to repay the $1.8 billion in bonds, now proposed in the bill. That number has decreased from $2.2 billion.

Further, the bill would limit the counties that could join the metropolitan transportation area district, and impose the sales tax increase. The new plan calls for just the counties adjacent to the seven-county metropolitan area and Benton and Stearns, members of the Northstar Corridor Development Authority.

Scheduled before the House Ways and Means Committee Tuesday, the bill is expected to be debated Thursday on the House floor.

A companion bill, SF2521, sponsored by Sen. Steve Murphy (DFL-Red Wing), has a date with the Senate Taxes Committee Wednesday. It is expected to be on the Senate floor Thursday.

Lawmaker turns to profanity

From CarverGOP.BlogSpot.com (blog of the Carver County Republicans):

"Rep. Ron Erhadt, in responding to a caller asking him to uphold the Governor's veto on the transportation bill and all of the taxes it contains and to not support the Democrat override attempt responded with anger and profanity, telling the caller to "tell the people who told you to call to go 'F***' themselves."

"The Governor vetoed the Transportation Funding Bill Friday. It contains a gas tax and a sales tax and a license fee tab tax and a new excise tax and a car rental tax to the tune of more than $500 in new yearly taxes for a family of four making between $49,000 and $70,000."

"Carver County Republicans have been calling House Republicans who might support an override, to ask them to stand against the tax increases and any override attempt."

"The call was made by Tom Winterer of Chanhassen to Erhardt's home... Winterer is new to grassroots politics, and just joined the Carver County Republicans at the Feb. 5 precinct caucuses."

"In the call, Erhardt asked Winterer why he was calling, since he was not a constituent or Edina resident."

"I'm calling because I'm going to be taxed under your veto override," Winterer said. "He told me I didn't know what I was talking about. I told him there are vast sums of money that are not being directed properly."

"Erhardt responded, "Tell the people to go "F***' themselves and that they are full of 'S***'."

Two days before the House is expected to attempt passage of an omnibus tax bill for the third time this biennium, the House Taxes Committee discussed expanding the sales tax to clothing.

The bill, HF2551, sponsored by Rep. Ron Erhardt (R-Edina), was laid over for possible inclusion in a tentative fourth omnibus tax bill.

In addition to the clothing sales tax, HF2163, sponsored by Rep. Melissa Hortman (DFL-Brooklyn Park), would allow the state to tax some legal, repair, financial, funeral, and salon services, and tattoo and body piercing. Hortman’s bill is to be discussed at an upcoming meeting.

According to a presentation by Paul Wilson, director of tax research at the Department of Revenue, a clothing tax would bring in about $400 million in additional revenue to the state.

Both bills would use the revenue to reduce the overall sales tax rate and create a clothing sales tax credit for low-income filers.

Chairwoman Ann Lenczewski (DFL-Bloomington) suggested the committee continue the discussion after the budget forecast is released Thursday. It is predicted to surpass the November 2007 deficit of an estimated $373 million.

A companion to Erhardt's bill, SF2346, sponsored by Sen. Ann Rest (DFL-New Hope), awaits action by the Senate Taxes Committee. Hortman's bill has no Senate companion.

Molnau given the boot

Transportation Commissioner Carol Molnau was ousted from her job today, Thursday, Feb. 28, by the Minnesota Senate, which voted 44 to 22 not to confirm her.

Illegal immigrants topic of debate

A Republican-sponsored amendment to withhold local government aid from Minneapolis and St. Paul because they're sanctuary cities failed Monday afternoon after much debate, but not by much.

What do you think? Should cities that do not enforce federal immigration law be subject to punitive measures?

Kohls amendment brings fierce debate, emotion

House Minority Leader Marty Seifert, a Marshall Republican, called the mayors of Minneapolis and Saint Paul "political hacks" and "liberal Democrats" after Victoria Republican Paul Kohls asked lawmakers to support a bill outlawing so-called "immigrant sanctuary cities" in Minnesota.
Kohls has been unable to get a hearing on the bill, and the deadline for hearings is rapidly approaching.

Contrary to a previous amendment offered by Seifert, which cut off state funding to local governments that have sanctuary ordinances, the Kohls amendment would not withhold state funding.

The term "sanctuary city" is used to describe places like Minneapolis and Saint Paul, with separation ordinances which prevent local police officers from arresting illegal immigrants solely for being in the country illegaly.

In the end the House voted to table the Kohls bill, meaning it can't be heard, with 66 legislators voting to table and 65 voting to keep the bill alive.

Progress on the bonding bill is stalled, with some legislators in the House and Senate disagreeing with each other about the size of the bill. The House version would spend $954 million; the Senate version would spend $958.8 million. The governor would veto each of these because he has asked for a smaller bill. What’s your perspective?

Rep. Joe Hoppe: We need to have a smaller bill. We need to stick to the generally accepted 3% guideline - especially in these economic times. We should keep in mind that bonding bills are useful tools, but that all of the money needs to be paid back.

Sen. Julianne Ortman: I agree with the Governor that the two bonding proposals from both the House and Senate are too expensive and not focused enough on the priorities and needs of the State.

The department of natural resources recently announced it would purchase some of Seminary Fen, which lies on the border of Chanhassen and Chaska. What has been your involvement through the years with the fen? Why? When did you learn of the DNR’s decision, and what was your reaction?

Rep. Joe Hoppe: I learned of the DNR's decision a few weeks ago and was happy that there was finally an agreement on the fen.

I was the House author of the appropriation to the DNR for purchasing the fen. I hope that it becomes a destination for school field trips and enables adults and kids to see a rare type of environment right here in the metro area.

Sen. Julianne Ortman: I was first involved with the fen when it was part of the bonding bill in 2003, and the State passed bonding money to buy Fen then. The deal fell apart in 2005. I am pleased to see now that the fen is going to be purchased and protected, and I believe it's in the State's best interest to do that.

A cap-and-trade system would create a financial incentive for businesses to reduce their emissions by assigning a cost to polluting. Environmental regulators would establish a “cap” limiting emissions from a designated group of polluters, such as power plants, to a level lower than their current emissions. The emissions allowed under the new cap would then be divided up into individual permits—usually equal to one ton of pollution—that represent the right to emit that amount. Because the emissions cap restricts the amount of pollution allowed, permits giving a company the right to pollute would take on financial value. Companies would then be free to buy and sell permits in order to continue operating in the most profitable manner available to them. So, those that could reduce emissions at a low cost could sell their extra permits to companies facing high costs (which would generally prefer to buy permits rather than make costly reductions themselves).

There has been discussion of cap and trade resolutions coming out of the House and Senate. Where do you stand on this issue, which would ask Gov. Pawlenty to take certain principles into account when developing a cap-and-trade program with other signatories to the Midwestern Regional Greenhouse Gas Reduction Accord?

Rep. Joe Hoppe: If we are going to have a cap and trade system, we need to make sure that Minnesota isn't too far ahead of the rest of the region. I am fully supportive of doing what we can to keep our environment clean, but we need to keep in mind that we don't want to make it harder to do business in Minnesota.

Sen. Julianne Ortman: There should be no cap and trade. We need to maintain a free-market economy, and the cap and trade will hurt Minnesota businesses and cost Minnesota jobs.

The House passed a bill that would pave the way for the adoption of a regional cap-and-trade system to reduce greenhouse gas emissions.

After several hours of debate and discussion on 19 proposed amendments, HF3195, sponsored by Rep. Kate Knuth (DFL-New Brighton), was approved 91-38. It now goes to the Senate, where Sen. Ellen Anderson (DFL-St. Paul) is the sponsor.

As described by Knuth, the bill represents "a step in the process" of implementing a regional cap-and-trade system currently being negotiated by Gov. Tim Pawlenty and several other Midwestern governors. Those negotiations are expected to produce a model rule by November of this year.

The bill would stake out a role for legislators in the process by requiring legislative approval of any regional agreement. It would also provide for a pair of studies — one on how best to govern a cap-and-trade system and another that examines the "economic, environmental, and public health costs and benefits" of cap-and-trade.

Several Republicans raised objections to the bill on the basis that man-made global warming — the problem the bill seeks to address — had not been scientifically proven to exist. Other members praised Knuth for her leadership on the issue, and said the bill represented a step forward on an issue that many Minnesotans consider important.

Senator Julianne Ortman got in on the climate change debate. Take a look at her taking a DFL counterpart to task on the senate floor.

http://www.globalclimatescam.com/?p=101

All four leaders of Minnesota's Legislature, Republicans and Democrats, are lending their backing to state-authorized subsidies to help the Mall of America double in size.

The city of Bloomington and the megamall's operators are seeking state permission to raise local taxes and divert money from a regional tax pool fed by businesses. More than 80 percent of the project's $2.1 billion cost would be picked up by private investors.

Legislators currently set their own salary. That could change if voters would approve a constitutional amendment putting the task in the hands of an independent citizen-only compensation council.

Rep. Kent Eken (DFL-Twin Valley) sponsors HF3796 to address the current method of determining legislator salaries, which he calls a “conflict of interest.” The bill would put before voters in the November general election a question to amend the state constitution removing legislators’ ability to set their own salaries and establish a citizen-only compensation council to make pay recommendations.

Approved by the House Rules and Legislative Administration Committee, it now awaits action by the House Ways and Means Committee.

The annual compensation rate of $31,140 for House and Senate members has not been increased since 1999. Legislators are eligible to receive a per diem, which is a daily payment available when they are engaged in official business. Members raised the per diem payment in 2007 to $77 a day for the House and $96 for the Senate. They are also reimbursed for housing and travel expenses.

A companion bill, SF3793, sponsored by Sen. Tarryl Clark (DFL-St. Cloud) awaits action by the Senate Rules and Administration Committee.

The Legislature on Wednesday night gave final approval to raising Minnesota's tops-in-the-nation biodiesel mandate.
The state's 2 percent biodiesel mandate is going up. First to 5 percent. Then 10 percent. And eventually, 20 percent of all diesel fuel sold in Minnesota must be biodiesel, according to the Pioneer Press.

Editorial question: Is this responsible?

Biodiesel is a fuel most commonly made from soybean oil. As crop prices soar, food prices follow, and the public debates the wisdom of turning food crops into fuel. Since Pawlenty proposed the 20 percent biodiesel mandate in August, soybean prices have soared 50 percent.

An August 2007 Reuters story read: "From Russia to China to the United States, consumers will be feeling the pinch of higher food prices in 2008, with cooking oil now joining corn, wheat, and milk on the growing list of food inflation culprits."

"Consumers were already paying more for cooking oils. But prices of processed and fried foods and those made from edible oils such as salad dressings and condiments will also be rising in the months ahead, economists said..."

"Soybean oil prices were near 33-year highs while palm oil prices set all-time highs on Wednesday amid tightening global supplies and rising demand. Prices of other cooking oils have also followed soy and palm oils higher."

That being the case, scientists often are critical of corn-based ethanol's energy and environmental benefits, but they tend to see biodiesel differently, the Press reports. University of Minnesota researchers found that biodiesel yields significantly more energy than ethanol, produces less pollution and displaces more greenhouse gases.

Is this a case of either affordable food or biodiesel?

With the end of session in sight, negotiations to resolve the state’s biennial deficit are “close,” House Minority Leader Marty Seifert (R-Marshall) said during his weekly press briefing.

The governor and legislative leaders are nearly in agreement on the funding cuts that need to be made, he said. “The outstanding items, that I see, are will we be able to get more human services reductions on the table.” He said it’s a system in need of structural change.

He called Sen. Linda Berglin (DFL-Mpls), who chairs the Senate Health and Human Services Budget Division, tenacious with a capital T. “She may end up destroying the deal at the end of the day.”

With the May 19 constitutional deadline rapidly approaching, Seifert said if the DFL is serious about reaching a budget agreement, they’ll need support the Republican position of capping local property taxes. In return, he said, the DFL could receive a “parting gift” of state help for the proposed Mall of America expansion and additional capital investment funding for more projects.

Unallotment and calling a special session to resolve the budget deficit remain tools the governor is willing to use, if no agreement can be reached, Seifert said. “If the Democrats would look at my (unallotment) list that I have been putting together in my computer, they would prefer to get the deal done.”

Story from the Minnesota House of Representatives Public Information Service