Dear Neighbor,

The much-anticipated Governor’s Budget was released this week. It has already been dubbed “A Budget for a Better Wisconsin” because of its $3.7 billion in tax increases on all Minnesotans to pay for $2.7 billion in increased spending.

Even with the increased tax burdens he is asking Minnesotans to bear, the governor does not pay back the remaining school shift … a debt that is still owed to our schools from 2010. Click

for a brief video of me addressing this topic in a committee meeting.

Here are a few highlights of the governor’s budget proposal:

  • $37.9 billion in state spending for FY 2014-15 (compared to $35.2 billion in FY 2012-13)
  • 7.6% increase in spending and 11.9% increase in taxes from FY 2012-13 to FY 2014-15
  • $225 million in cuts to forecasted spending increases and $3.7 billion in new taxes

The governor goes on to propose $2.1 billion in new sales taxes on goods and services that are paid for by the middle class. While we are still waiting for a list of all affected goods and services, here is a sampling of the new taxes that we are aware of so far:

  • clothing over $100 per item
  • club memberships
  • over-the-counter drugs
  • personal care services and instruction (haircuts)
  • auto repair services
  • business-to-business taxes including legal, accounting, management consulting, advertising, and business support services
  • 94 cent per pack additional tax on cigarettes ($370 million)
  • 25% increase in income taxes on highest 2% of earners ($250,000 married, $150,000 individual)
  • “snowbird” tax (subject to a pro-rata income tax based on the number of days they are present in the state)
  • .25% transit tax for the 7-county metro area ($100 million a year)
  • online purchases (‘Amazon’ tax) and digital downloads

The Dayton administration indicates that the governor’s proposed taxes would cost Minnesota’s business owners alone more than $1.5 billion. This will undoubtedly make some of our most successful companies reconsider their expansion plans or even the state they proudly call home. In fact governors in other states (like Wisconsin) have already begun courting good Minnesota businesses to their more friendly business environment.

In addition, the DFL is also pushing through a bill that would raise health insurance costs and decrease choice in Minnesota. The proposal creates a new 3.5-percent tax on insurance premiums to fund a brand new government “super agency.” This agency would be subject to limited legislative oversight and have broad authority over our robust health insurance market. There are also serious data privacy concerns over the personal data that will be reported to federal agencies like the IRS and the Dept. of Homeland Security for ‘compliance’ purposes. This is not your basic “Travelocity for health insurance.” In fact, it reaches far beyond Obamacare mandates and severely curtails free-market choices in healthcare.