Higher Taxes? Take A Guess

Drazkowski

This is one of a series of stories previewing the 2015 Minnesota Legislature. It concentrates on Republicans’ policy initiatives as they will retake control of the House. The Senate and governor’s office remain in Democratic control.

Let’s face it: What most Minnesotans want to know about the upcoming legislative session is whether lawmakers will raise their taxes.

The answer is a resounding maybe.

In most years, Republicans could be expected to reject any tax increase proposal. But some in the GOP, including a leader or two, say there could be tax increases for priority items such as nursing homes and transportation. Democrats in general are much more open to raising taxes to fund new or expanded programs.

“I don’t think this is the time of year you rule out taxes,” Rep. Paul Torkelson, R-Hanska, said. “This is the time you throw all the spaghetti against the wall and see what sticks.”

House speaker-designate Kurt Daudt, R-Crown, has left the door open, if only slightly, for new tax revenues. Others, however, have securely locked that door.

“Absolutely no new taxes,” Rep. Bud Nornes, R-Fergus Falls, said.

All of that talk comes at a time when Democratic Gov. Mark Dayton and legislative leaders say no general tax increase is needed in 2015.

Nornes promotes the type of revenue increases generally favored by Republicans: Find ways businesses can make more money, allowing the companies to pay more taxes, along with employees who are earning higher wages.

“If we can increase tax revenue without increasing taxes, by just increasing productivity and the economy, that would be the hope that we all have,” Nornes said. “It is kind of a pretty delicate procedure.”

Daudt agreed with Nornes that improving the economy can help. Putting more money in Minnesotans’ pockets, he said, “solves Minnesota’s problems.”

Nornes added: “We have raised so many taxes in the last two years that I think people are fed up.”

Republicans campaigned before the November election against the $2 billion tax increase approved by Dayton and his Democratic legislative colleagues when the DFL controlled the Legislature and governor’s office the past two years.

Some Republicans could consider a tax increase as a top priority. For Rep. Paul Anderson, R-Starbuck, that exception would be nursing homes.

“At least on the nursing homes, I would support some kind of an increase of some form of tax or revenue increase,” Anderson said. “I think it is that serious out here in rural Minnesota.”

Republicans are talking less this year about tax reductions than in the past, but farm property taxes may be an exception.

Rep. Steve Drazkowski of Mazeppa plans to offer a plan that would remove farm property taxes for new school and local government buildings.

Drazkowski said that he will talk to members of the Property Tax and Local Government Finance Division that he leads before coming out with a final plan. The beginnings of the plan were hatched when he talked to some southern Minnesota farmers who said they paid $55 an acre for local government building projects.

“That’s a lot of money when you begin to add up the cost of those property taxes,” he said, adding that the building taxes were not the only items farmers pay.

During his re-election campaign, Dayton said that he leaned against providing special relief for farmers. He said that to so would force other property owners to pay more; to make that change, he said, would take a reform of the entire property tax system.

Drazkowski promised that his committee will hold listening sessions about his and other property tax plans, perhaps including some away from St. Paul.

His committee also will govern state aids paid to local governments, and if he has his way things will change.

Local Government Aid, a program for cities, mostly goes to Minneapolis, St. Paul and greater Minnesota cities. For the most part, suburbs get little if any LGA.

Drazkowski and other Republicans say the program, set up to help cities with little property that can be taxed, should return to its original concept, to pay for fundamental services such as public safety. He said cities like St. Paul and Minneapolis have plenty of property to tax, so do not need LGA.

“Why are we giving Minneapolis $76 million Local Government Aid,” the chairman-to-be asked. “I don’t know.”

While Drazkowski may want to eliminate some cities from the LGA list, and make other changes, he also realizes that the Republican-controlled House cannot dictate such things. “We also have to remember we have got a Democratic Senate and a Democratic governor.”