Earlier this week, state officials released the annual February budget forecast. The forecast, which is used by legislators and others to make sure the state’s budget is on track, shows a $328 million surplus – over $600 million more than the projected deficit of last fall. Tax relief at both the state and federal level has led to economic growth, higher wages, and the lowest unemployment rate in more than 17 years. In other words, Minnesota’s economy is in great shape.

The budget surplus is good news, but it also means the government over collected from its citizens. My colleagues and I will build on the momentum of last year’s historically-productive session to deliver a tax bill that protects your wages and continues to grow our economy – especially in Greater Minnesota. Over the next several weeks, we will examine ways to bring Minnesota’s tax code into conformity with the changes at the federal level and explore possibilities to put more of your own money back into your pockets.

“Advancing Minnesota” agenda

My colleagues and I unveiled our “Advancing Minnesota” agenda of session priorities, which includes tax conformity, infrastructure investments, improving school safety, fixing the state’s failed driver’s license system known as MNLARS, and other issues.

Federal tax reform has created a unique opportunity to further address Minnesota’s tax system and one of the priorities this session is protecting your wages from any inadvertent increase in taxes resulting from the federal tax reform passed last year. The federal changes give us a chance to explore ways to grow our economy to remain competitive with neighboring states and modernize Minnesota’s tax structure. We will focus on:

• Protecting your wages – the federal tax changes lower rates for 90% of Minnesotans, but exposes more income to state income taxes. Without legislative changes, Minnesota families and small businesses will overpay $459 million this biennium and $1.1 billion next biennium.
• Simplifying your returns – the federal tax changes make filing taxes simpler for nine out of ten Minnesotans, but without legislative changes, Minnesotans will have greater problems filling out their state returns.
• Growing the economy – the federal tax changes are already making an impact on the U.S. economy. Without legislative changes, Minnesota will fall behind our more tax-friendly neighbors, such as South Dakota, North Dakota, Iowa, and Wisconsin. 

Other initiatives for the 2018 session include removing burdensome regulations that are contributing to the decline in access to childcare in Greater Minnesota, funding mental health crisis centers to reduce the impact on jails and emergency rooms and getting people the treatment they need as soon as possible, battling back against the opioid epidemic, and making health care costs more transparent.

Finally, I expect a comprehensive bonding bill to pass this year. This will be a “bricks and mortar” bonding bill that will invest in sustaining and building infrastructure throughout the state, and will focus on maintaining state assets and investing in essential local needs such as road and bridge safety projects, wastewater treatment upgrades, and asset preservation. Mental health crisis centers will also receive the funding necessary to better respond to emergency situations. The bonding bill will draw from both state and local funding sources.

Water infrastructure projects

A bill to allocate $167 million to aid cities with critical infrastructure projects was introduced this week with bipartisan support. The bill provides the funding in the form of state bonding for three key grant and loan programs administered by the Minnesota Public Facilities Authority (PFA).

Due to the need in many of our communities to replace aging infrastructure and come into compliance with new, stricter water quality regulations, the number of cities and sanitary sewer districts currently planning to rebuild or upgrade their drinking water or wastewater infrastructure has jumped in recent years.

More than 300 cities, the bulk of which are in Greater Minnesota, currently have projects on the PFA’s project priority list, which identifies potential wastewater, drinking water, and storm water projects that are eligible to receive funding through PFA programs. The Minnesota Pollution Control Agency has estimated that local governments and the state are facing $5 billion in wastewater infrastructure costs over the next 20 years, while the Minnesota Department of Health estimates it will cost an additional $7.4 billion to upgrade and repair drinking water infrastructure over that same time period.