Letter: Tax repeal still supported
By District 22A Rep. Joe Schomacker, R-Luverne
I saw positives and negatives with the recent news that Minnesota is projected to have a $1 billion state budget surplus for the 2014-15 budget cycle.
Even with what economists call a ‘slightly weaker’ national economy, the job creators and hardworking taxpayers of Minnesota are keeping our economy strong. Of the $1.086 billion surplus projection, $246 million would be used to pay off the remainder of Minnesota’s school budget shift. Another $15 million would then be transferred to the state’s airports fund, an area where the Legislature had borrowed money in 2008.
Roughly $825 million would remain if this surplus projection remains accurate.
There are a few other points of interest from the forecast. Minnesota is projected to collect $39.2 billion in taxes over the next two years. Half of the savings in spending found in the analysis came from the Health and Human Services budget and are a result of receiving more waivers from federal healthcare mandates. Minnesota’s gross domestic product (GDP) growth was 3.5 percent in the last year, which is one of the sixth highest in the country.
Even with this positive news, our economy is still dragging from Washington’s uncertainty, although economists are not talking about a slowdown over the next two years. While this is a positive budget forecast, I urge caution in making politically charged promises by judging from such a small window of the forecast.
Forecasters expressed great caution to be used with these numbers, as these projections are based only on 15 percent of the total tax collection and spending taking place. In other words, this surplus could increase or decrease once a more accurate projection is taken at the end of February.
The governor immediately mentioned he may now want to repeal tax increases he signed into law earlier this year, but legislative leaders from the same party are less committed to that plan. To me, from what the forecasters note, it’s too early to spend this projected surplus. I remain a strong supporter of repealing the warehousing tax and the business and farm equipment repair taxes, but it will ultimately come down to what the speaker, senate leader and governor agree on.