Legislature delivers mixed results; many issues teed up for 2020
By Doug Loon
The Minnesota Chamber Federation worked full-time at the 2019 Legislature focusing on helping to keep Minnesota affordable to raise a family, grow jobs and support strong communities. We delivered on many of your priorities, and more work remains.
The Federation consists of 45 local chambers representing more than 20,000 businesses in lock step with the Minnesota Chamber.
Taxes for middle-income families were reduced for the first time in nearly two decades. We helped lower property taxes for businesses, prevented massive tax increases, and blocked expansive and expensive workplace mandates – all of which would have significantly raised the cost of doing business in Minnesota.
A number of proposals, both helpful and harmful to Minnesota employers, fell by the wayside. That is the nature of divided government. Many issues are already teed up for next year’s session.
Here is the scorecard for our top priorities.
Tax competitiveness: We blocked more than $9 billion in proposed new taxes, the lion’s share which would have been paid for by Minnesota employers. All businesses will see a reduction in the statewide business property tax. Passage of federal tax conformity will help ease administrative burdens and complexity. However, some businesses will still see an income tax increase as federal provisions were only partially offset by state tax-relief measures.
Health care: Reinsurance was extended two years, which will continue to stabilize the individual health insurance market. Legislation increased the transparency of health care costs by requiring disclosure of additional fees by clinics associated with hospitals. The provider tax will be reduced from 2 percent to 1.8 percent and continue on a permanent basis. Proposals allowing for a Minnesota Care buy-in option were blocked over concerns with disruption to the existing health insurance market and lower financial reimbursements to providers.
Workplace mandates: We blocked two proposals that would have affected all employers – a mandated 24-week paid family and medical leave program financed by a new 0.6 percent payroll tax on employers
and employees, and a one-size-fits-all paid sick and safe time program. A compromise on “wage theft” legislation will help protect employers who unintentionally shortchange employee paychecks and increase s penalties for employers who intentionally do so.
Transportation: We blocked a 20-cent gas tax increase and preserved the dedication of sales tax from rental cars and auto parts to fund roads and bridges. The investment of those dollars, passed in 2017, takes full effect July 1. Money was allocated to help resolve the shortfall in long-term metro transit funding. All drivers must now abide by hands-free use of cell phones.
Workforce development: Funding was increased to expand scholarships for students to enter areas of greatest workforce demand; increase the number of quality childcare facilities and providers in communities with documented shortages; and to increase early learning scholarships that give priority to low-income families to access quality programs. Funding for affordable housing will help address shortages across the state.
The political landscape – a new governor for the first time in nearly a decade and a change in control of the Minnesota House – produced a grueling session. Still, significant negotiating and compromises were made, which is a positive signal that divided government can work and can get good work done.
We are grateful to those legislators who worked so hard on behalf of businesses in our state. We continue to work to help strengthen the state’s business climate.
Doug Loon is president of the Minnesota Chamber of Commerce – www.mnchamber.com.