St. Anthony: Minnesota Legislative Difficulty Despite Surplus Bitter Pill for Business

Despite a preliminary agreement in May to cut taxes and spending more than $ 3 billion, Republicans in the Minnesota Senate withdrew from the 11-hour deal with Gov. Tim Waltz.

Following a preliminary agreement, the session of the legislature ended without the adopted bills on taxes and bonds. Both sides continued talks until Thursday. The Republican leadership said the countries were far apart; DFL leaders said they were close to a deal.

Some of the proposed spending and tax cuts will boost Main Street, improve transportation infrastructure and attract federal matching funds, some of which may now disappear. They would fund more public health and public safety.

A special session now seems unlikely.

Many business organizations are dissatisfied.

For example, the RevitalizeMN coalition. It sought $ 20 million in state tax credits next year – and a 10-year extension – to match the federal tax credit. Its member companies are repairing destroyed structures that have been declared historically significant, such as the renovated Eli Theater and the Winona School, which became an apartment last year.

A University of Minnesota study earlier this year found that every $ 1 in government funding generates $ 10 in related investments and thousands of jobs that have paid construction workers $ 172 million over 170 historic properties over the past 11 years.

President Chris Sherman of developer Sherman Associates said he had bipartisan support for renewing the historic building tax credit. Now, as part of the suspended legislation, he is returning to the drawing board for historic projects such as the Duluth Armory, the St. Paul Landmark Center and the Minneapolis Northstar Center. There will be lost economic development, according to RevitalizeMN, a trade group of developers, bankers, contractors and workers.

Another small but significant business group asked for $ 20 million this session.

The Minnesota Commercial Railroad, an association of 15 short-haul railroads, covers tracks up to 25 miles long that have been abandoned by national consolidation railroads. The small lines serve hundreds of industrial companies in Minnesota. They have been receiving state subsidies since 1976 because they cannot afford the full cost of repairing the tracks.

“The failure of the legislature to pass a binding bill last month is a huge disappointment for the Minnesota Railways and Railways. [business] customers, ”said John Apitz, executive director of the Minnesota Regional Railroad Association. “This is probably the most important task that legislators have had in the last year of every biennium. These [investments would allow] heavier railway wagons, which means cost savings for freight forwarders and much less damage to our roads and the environment than transporting the same freight by truck. ‘

In addition, there is the Indigenous Heritage Initiative of 16 non-profit organizations of Native Americans in the twin cities, which sought $ 84 million in bond proceeds to renovate and renovate their educational and training, health and cultural centers, which have deteriorated due to lack of funding for years. The money would be combined with $ 64 million raised from private sources and needed to implement the projects, the group said.

CEO Joe Hobot of the Center for the Industrialization of Native American Opportunities, which provides high school education and vocational training to more than 1,000 people a year at an obsolete facility in southern Minneapolis, is leading a coalition of Indian groups working together for the first time. joint legislative proposal.

“We urge you to return to the Capitol … in a special session so that you can complete the work of the people, on behalf of the thousands of Indian voters who receive services in our organizations each year,” Hobot wrote to lawmakers this month. that some of the projects will be postponed indefinitely without state funds.

The longer it takes, he writes, the higher the cost of the projects.

The legislature adopted, and Waltz did approve, a $ 500 million “hero pay” package for front-line workers during the COVID-19 pandemic and $ 2.7 billion in federal money to recharge the depleted state unemployment insurance fund in a convenient way. business measure. This makes the business lobby happy.

“Some people wanted more, but there was already a significant increase in spending,” said Beth Kadun, vice president of tax policy at the Minnesota Chamber of Commerce. – Some good things have been done.

But the fiscal year ends in a few days, and there are elections in November that will give the winners control over an even bigger budget surplus.

The legislature, charged with several billion dollars this session to recover from the pandemic and surplus funds, had to go further this spring, amid a slowing economy, with investment in the Minnesota economy and people.

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