Legislative Notebook: Tax Talk Divided

By Don Davis

A parade of lobbyists picked apart proposals by House and Senate tax committees Tuesday while others gave the plans their blessings.

Among dozens of testifiers was Frank Orton of Walker, whose company owns 15 northern Minnesota convenience stores. Ones in East Grand Forks and Moorhead would be hurt by a proposed $1.60 per-pack increase in cigarette taxes, he said.

“It is going to affect all border cities drastically,” he added, not just those bordering North Dakota like two of his stores.

“We are competing with two hands behind our back when competing with North Dakota,” Orton said, and if taxes increase “you might as well cut the hands off and our legs as well.”

Orton also told Gov. Mark Dayton about his concerns when Dayton visited Moorhead recently.

Minnesota liquor lobbyists complained that a House provision to raise alcohol taxes could add $2 in tax onto the cost of a 12-pack of beer.

Minnesota-based brewers would get a tax break, but imported drinks would cost an average of 7 cents more.

City leaders praised a provision to simplify and add money to Local Government Aid, a program that provides state funds to cities.

“This is, in our view, a very historic reform,” said lobbyist Tim Flaherty of the Coalition of Greater Minnesota Cities.

But Sen. Paul Gazelka, R-Nisswa, complained that the bill would reduce the percentage of LGA going to rural cities.

Flaherty said the formula is fair because it would give LGA to many suburbs that now receive none. But, he added, more money is needed than now is spent on LGA.

“We only support the formula with the additional $80 million,” Flaherty said. “To cement this reform into the future, we are going to need to see moderate increases in the future.”

Sen. Julianne Ortman, R-Chanhassen, complained that there has been no estimate about the full cost of a proposal to begin taxing clothing, a part of the Senate tax bill. She said if clothing is taxed, fewer people will visit Minnesota — especially Mall of America — which would affect other sales such as airline tickets and motel rooms.

911 calls protected

The Senate unanimously approved a bill to allow criminal charges against those who call 911 under false pretenses.

Sen. Susan Kent, DFL-Woodbury, said her bill “creates the option for a prosecutor to charge an individual with a felony if the individual intentionally reports a fictitious emergency with the intent of getting an emergency response, and if an emergency responder or someone else is seriously injured or killed as a result of the emergency.”

The bill also makes it a felony to use communications devices to interfere with, overload or otherwise prevent the emergency call center’s system from functioning properly.

Education bill advances

A bill increasing public school spending has passed the House Taxes and Ways and Means committees.

The bill by Rep. Paul Marquart, DFL-Dilworth, supports a goal of by 2027 reaching 100 percent high school graduation, 100 percent literacy by third grade and 100 percent career and college readiness by graduation.

The bill would provide money for all-day kindergarten statewide and appropriate $50 million for pre-school scholarships. Also, basic state school funding would increase 4 percent.

“This bill is going to have a significant positive impact on the economic future of this state,” Marquart said. “Investments in proven programs like all-day kindergarten and early childhood scholarships combined with additional resources for our schools will put our children on the path to the world’s best workforce.”

The full House is to vote on the bill next week.

Judiciary funded

Senators Tuesday approved 47-18 spending nearly $1.8 billion on judicial, corrections and related purposes for the next two years.

That is $88 million more than is being spent in this budget cycle. The increase includes giving judges and justices 3 percent raises on July 1 and 4 percent increases the following year.

Funding also includes new personnel for the Tax Court and increased technology spending.

The Corrections Department, which operates state prisons, would get $487 million of the budget.

Border city aid

The House tax bill moving through committees includes $1.5 million to help Moorhead, Dilworth, Breckenridge, East Grand Forks and Ortonville compete with lower-tax North Dakota.

For years, the cities have received help to lower taxes for new and expanding businesses. For instance, businesses could receive sales tax exemptions for new equipment investments, get tax credits for hiring new workers or expanding facilities and receive property tax credits on new or expanded facilities.

“Our border communities are in a very unique situation,” said Rep. Jay McNamar, R-Elbow Lake. “Obviously, we are working hard to provide options for all of the communities in Minnesota, but when you’re neighboring another state, you deal with a whole different set of circumstances.”

Decker highway named

Gov. Mark Dayton Tuesday signed a bill naming a portion of Minnesota 23 in Stearns County as Officer Tom Decker Memorial Highway.

The bill was brought by Rep. Jeff Howe, R-Rockville, and Sen. Michelle Fischbach, R-Paynesville, to honor the police officer who died in a Nov. 29 shooting. Decker, whose family attended the bill signing, was a six-year Cold Spring Police Department veteran.

Businesses want test

A coalition of businesses is buying broadcast, online and other advertising urging lawmakers to keep a test high school seniors must pass before receiving their diploma.

“We don’t like to get rid of the consequence,” said Charlie Weaver, representing the coalition.

Legislative Democrats propose doing away with the test that first was required in 2000. Known as the Basic Skills Test, Weaver said it especially helped minority students graduate.

Weaver said businesses are concerned because they are worried about having enough educated employees. He said the businesses are spending “six figures” to finance the statewide campaign.