Friday, April 19, 2024

Thank you, Veterans; legislative update

It was on the 11th day of the 11th month at 11 a. m. that the WWI armistice was signed. On Saturday, we celebrated and honored our Veterans. Every year, we have a responsibility to gather and to honor the brave men and women who serve and defend this nation’s freedom and security; we can honor them with a renewed dedication for living out the ideals they served to defend.

Thank you, Veterans. And thank you to our Veterans’ families who supported their service in defense of our Country.

State Housing Tax Credit

The need for housing is acute. The need is great and that is why as Tax Chair in 2021, I authored the State Housing Tax Credit (SHTC). The State Housing Tax Credit will help bring private money into the affordable, workforce and single family-homeownership housing markets. The SHTC is an 85% tax credit and is being implemented this year. Contributions to the fund are currently being accepted until Dec. 8 for the 2023 tax credit. Eligible individuals or businesses in the program will receive an 85% credit towards their state tax liability. Contributors may also choose which projects to fund. The SHTC will also be available in tax years 2024-2028.

More information on the tax credit can be found here: https://mhponline.org/wp-content/uploads/SHTC_Program_Summary_10.11.23.pdf

Another Tax Surplus

Minnesota’s Management and Budget department (MMB) projected a $2 Billion surplus in its recent budget forecast. While surpluses are preferable to deficits, it should not be too surprising that we see a surplus at this time since the Democrats raised taxes by billions of dollars.

In addition, an estimated $2.4 billion is expected to roll over into the next biennium. In the 2024 fiscal year the Minnesota Department (DFL) of Management and Budget (MMB) expects at least $400 million above the forecast in the first quarter, but part of that $400 million is $150 million of tax rebates that Minnesotans did not qualify for.

Along with most Minnesotans, I am disappointed the DFL Trifecta of leadership in the Senate, House and Governor, did not agree to more tax relief for Minnesotans! I will continue my push to give that money back to taxpayers especially in light of this projected growing surplus.

Paid Family & Medical Leave Actuarial Study (PFML)

A recent report on the new Paid Family Medical Leave (PFML) law revealed that the program will cost $600 million more than expected.

Actuarial studies are routinely done prior to implementation of insurance products to make sure the premiums collected are sufficient to pay for the benefits promised. However, the authors of the PFML bill and their majorities in the Senate and House refused to get an actuarial study prior to passage of the new PFML law.

However, my colleagues on the Jobs committee and I were successful in requiring an actuarial study of the Paid Family Medical Leave (PFML) bill before implementation. The results reveal higher payroll taxes will be required due to higher benefit and administrative costs.

PFML will cost Minnesota taxpayers over $600 million more than projected in the first three years of the program.

The PFML Tax will be 31% higher than expected in year two

Read the Summary of the report here: https://www.nfib.com/content/news/dental-insurance/new-report-minnesota-....

Read the full study here: https://strgnfibcom.blob.core.windows.net/nfibcom/Actuarial-Analysis-of-....

 

Many of us issued warnings in the Legislature that the PFML bill, as passed, would lead to higher taxes on businesses, and moving too fast on the bill, without understanding the real costs behind the legislation, would lead to the price tag being much higher than expected.

I am looking at ways to fix this well intended but poorly written PFML bill. Stay tuned.

 

Carla Nelson represents District 24 in the Minnesota State Senate. District 24 includes all of Dodge County and portions of Olmsted County, including Byron.

 

 

 

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