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Others’ Opinion: Surplus suggestions

Published 9:25am Thursday, March 13, 2014

First, this $1.233 billion state budget surplus is a good situation. We strongly prefer it instead of the past few years of deficits, the painful tax increases and program cuts.

The surplus also signals another very good thing: More Minnesotans have jobs.

Now the governor and legislators have to decide what to do with the money.

Gov. Mark Dayton and House members have practically fallen over themselves figuring out ways to deal with the surplus. This is behavior you would expect for lawmakers up for re-election.

The Senate, not up for re-election, has been slower to react. Senate DFL leaders claim they need more time to carefully examine every possible best use for the citizens of Minnesota.

The Times Editorial Board offers these strong suggestions:

—Repeal the three new business-to-business sales taxes passed in the 2013 session to help generate revenue for the state. One of the new taxes is scheduled to start April 1. The B2B taxes were ill advised. The state’s business tax climate is challenging enough without these taxes, which harm Minnesota’s competitive edge with neighboring states.

—Protect the rebuilt reserves. Some people are suggesting lawmakers nibble at some of the money that would be redirected into the reserve fund for state roads, education or services for the elderly and disabled. All of those ideas have merit. But the state shouldn’t count on surpluses each year.

—Here is a suggestion on what not to do: Don’t give the money back to taxpayers in the form of a rebate. Everyone enjoyed getting rebate checks during Gov. Jesse Ventura’s administration. But lean years followed.

—Align state tax law with federal law to provide $301 million in tax credits and deductions. Under a plan proposed by Dayton to correct these imbalances, married couples, working families, people paying for child care and those paying off student loans would benefit, according to a Minnesota Public Radio report.

—Develop a careful plan for some tax cuts for business and individuals. The proposal should target some of the biggest inequities in the state’s tax code. This should be looked at as a way to make the system work more effectively rather than a way to return $500 million to taxpayers.

Minnesota’s revenue picture has a rosy forecast. Lawmakers shouldn’t see handling such a surplus as a re-election strategy. Rather, they should act in ways that will benefit the state’s long-term economic health the most.

—St. Cloud Times


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