Tax and bonding bills reach conference committees

If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk, I'll tax your feet
Taxman!
'Cause I'm the taxman, yeah I'm the taxman
—"Taxman" by George Harrison

As reported by Dan McGrath of Minnesota Majority, the Minnesota House and Senate omnibus tax bills are overflowing with tax increases (i.e., veto bait) for all Minnesotans, not just "the rich:"

[WARNING: The following explicit tax increases may offend some fiscal moderates and conservatives. Reader discretion is advised.]

The Senate plan (SF2074) calls for across the board income tax increases and a new top tax bracket of 9.25% to collect $2 billion in new revenues. The House plan (HF2323) is a patchwork of tax hikes on income, tobacco, alcohol, recreational vehicles, and even includes a tax on homeowners who have higher energy (natural gas) use during winter months...

The House bill also eliminates some pretty substantial tax deductions, like the mortgage interest deduction and education tax credits. A slew of other changes remove subtractions from federal taxable income and throw in some additions, like motor vehicle and property taxes paid, and some charitable contributions. All of this has the effect of inflating the amount of personal income that the state will compute taxes on. The House tax bill also establishes a new top tax rate of 9% on income over $169,000 (or $300,000 for married couples filing a joint return).

And don't forget Rep. Jim Davnie's (DFL-Minneapolis) proposal to tax purchases from online stores like iTunes and Amazon.com. Governor Pawlenty promises to veto all of these tax increases should they reach his desk.

Rep. Sarah Anderson (R-Plymouth) has her eye on the "emergency" bonding bill, also in conference committee. The Legislature typically passes an omnibus bonding bill in odd-numbered years only for structures in dire need of repair. Apparently, our DFL-controlled legislature is not about to let a good crisis go to waste, because Anderson reports that the bonding bill could exceed the customary limit of 3% of non-dedicated general fund revenues.

Why does this matter? If borrowing exceeds the three percent cap, the interest rate we pay on bonds will increase. "Consequently," said Anderson in an e-mail to constituents, "we will pay more for the bonds at a time when [the state is] $6.4 billion in hole. In addition, school districts will pay more for bonds for their building projects since their bond rating is tied to the state bond rating." Can you say, "property tax increase?"

It's time to send a message to the Legislature that a recession with high unemployment is the time to cut spending, not raise taxes. Stop by the Tax Cut Rally at the State Capitol grounds this Saturday, 11 am - 4 pm, and make sure the Legislature gets the message loud and clear. When he makes his appearance at the annual rally around 1:00 pm, you'll also have a chance to encourage Gov. Pawlenty to ink-up his veto pen and say, "Go ahead, make my day!"