Sen. Gene Dornink: Working with a budget surplus

Published 5:32 pm Friday, January 7, 2022

Last month, the Minnesota Office of Management and Budget released a projected $7.7 billion surplus for the fiscal year 2022-2023 biennium. The budget and economic forecast of state revenues and expenditures are released twice a year, once in February and November. The purpose of the forecast is so that the Legislature can ensure budgets remain on track, in balance, and we can plan for future budgets. A surplus is always desired, but $7.7 billion above projected spending needs is way too high.

While the governor celebrates the largest surplus in state history, it is hard to be excited when I hear from my constituents and experience firsthand how difficult it is to manage a family budget with high inflation and rising costs for everyday items. This large surplus gives us many options for what we can do to make life more affordable for Minnesotans trying to recover from a challenging year financially and help our small businesses with continued efforts to recover from pandemic economic shocks.

During the pandemic, our small businesses took on a lot of burdens to keep their doors open and employees on the payroll, all while trying to navigate through unforeseen lockdowns, restrictions, and mandates. Now, the Minnesota Department of Employment and Economic Development (DEED) is preparing to send notifications to employers outlining significant Unemployment Insurance (UI) payroll tax rate increases to pay the existing $1.1 billion UI debt that was accrued during the pandemic. We should be using the projected surplus amount to pay the state’s debt, not forcing small business owners who struggled to keep their doors open to pay for it. Here in Minnesota, we have been blessed with so many fantastic businesses; continuing to raise our taxes may cause us to lose them to our border states.

Not only do we have to worry about losing our businesses to border states. I also continually hear from constituents that have lived in Minnesota their whole life considering moving to another state that has lower taxes and particularly states that do not tax social security. Minnesota is the fifth highest taxed state in the nation and is only 1 of 13 states still taxing social security or other retirement income. In my first session as your senator, I introduced a bill eliminating all taxes on social security income. Minnesotans are indirectly taxed twice on social security. Although my colleagues on the other side of the aisle will argue it is not double taxation because the funds you collect don’t come directly from your taxes, you are still paying into the state on both occasions. This has always been a top priority for me, and given the projected surplus, it is absolutely time to get this done.

The size of the projected budget surplus is staggering, but it is apparent that we need to use this money to help Minnesotans get back on their feet after a couple of challenging years. I look forward to working hard this upcoming session to invest in long-term solutions and make life more affordable. I take great pride in creating and contributing to a future for our children and grandchildren. I want to ensure that every person can prosper, grow, and succeed in Minnesota.

As always, I am here for you if you have any comments, questions, or concerns. Please feel free to reach out to me by email at Sen.Gene.Dornink@Senate.mn or call me at 651-296-5240.