A pay raise plan for Minnesota elected officials is a key point of difference as a House-Senate panel begins negotiations on a state agency budget bill.
The state Senate approved its bill containing pay raises for legislators, the governor and agency commissioners. The House didn’t broach the lawmaker pay topic when passing its bill.
Thursday’s conference committee hearing is the first of several expected before a state agency budget bill is finalized.
Lawmakers haven’t seen their base pay rise in more than a decade. If enacted, the raises wouldn’t kick in until 2015. For legislators, the initial bump would be about $10,000 as part of a proposal to tie their wages to the governor’s pay. The governor would see successive 3 percent raises and inflation-adjusted salary hikes after that.
They were tallying up the positives and the negitives yesterday as the proposed Senate Omnibus Tax Bill was released this week at the State Capitol in St. Paul – and the bottom line is that Minnesota Business Leaders are not happy.
Not that there aren’t a few positives in the Tax Measure. Beth Kadoun with the Minnesota Chamber of Commerce says those include a proposed reduction in the corporate tax and sales tax rate, the R & D research credit expansion, and the Mayo Destination Medical Center. However, Kadoun says all of those are outweighed by a one-point-eight-billion dollar tax increase, with a great portion of that falling on the business community.
And that Destination Medical Center proposal from the Mayo Clinic is proving a bit tricky, with Rochester Senator Carla Nelson – representing the District that includes the world renown medical facility – introducing an amendment yesterday that would have removed the D-M-C proposal from the Tax Bill, offering to send it to the Senate floor as a stand-alone measure.
Senator Nelson says the Mayo Clinic generates nine-billion dollars a year in state revenue, about four percent of the Minnesota gross domestic product, and also spends 700-million per year to purchase goods and services from four-thousand Minnesota businesses.
The amendment did not pass, however, and the proposal will remain part of the overall Senate tax package.by ndmuscle
The Senate’s soon-to-be-unveiled tax plan will likely affect more than 2 percent of the state’s top earners with an income tax increase, Senate Majority Leader Tom Bakk said Monday.
Bakk, a Cook Democrat, said the plan, set to be released in committee Tuesday, will include a so-called fourth-tier income tax that will be lower and broader than Gov. Mark Dayton’s proposed rate of 9.85 percent. He did not say what that rate for the top earners might be.
Bakk previewed the Senate plan Monday at a University of Minnesota forum with House Speaker Paul Thissen. The House tax plan calls an income tax increase on those making more than $400,000 a year, plus a 4 percent surcharge for two years on incomes over $500,000.
The Senate is also weighing expanding the sales tax to clothing and most consumer services while lowering the overall rate.
“Some people are probably going to lose elections because we are going to raise some taxes,” Bakk said at a University of Minnesota forum. He said some Minnesotans may not take kindly to their taxes being raised, “but sometimes leading is not a popularity contest.”
Unlike the House tax bill, Bakk said the Senate won’t include a controversial increase on alcohol excise taxes.
Thissen said Monday his chamber’s proposal would boost prices by 7 cents a drink. Brewers and alcohol industry insiders contend that’s not the case, and Bakk agrees.
“It’s more than that,” he said.
House and Senate Democrats will eventually have to reconcile the differences between their tax plans in a conference committee after both bills pass. Bakk said some form of a tax increase on top earners and a cigarette tax hike will likely become law this year.