Good morning and congratulations for making it to Friday.
A new lobbying law could put some Minnesota legislators in a tight spot and also raise problems for regulators in determining who must register as a lobbyist. MPR’s Brian Bakst reports the law approved in 2021 is set to take effect in January. It aims to bar legislators from working for entities that exist primarily for lobbying or government affairs work. The same prohibition would apply to legislators who take on certain roles at organizations that employ or contract with lobbyists. State Rep. Kurt Daudt, a former Republican House speaker who was just elected to a sixth term, and DFL Rep. Ruth Richardson, who will begin a second term soon, are just a couple of legislators whose jobs away from the Capitol have drawn scrutiny. Depending on how the statute is interpreted and enforced, it could require some lawmakers to choose between serving in the Legislature or continuing in their outside occupations. While the effective date is Jan. 3 – the start of the new session – the law won’t carry any real teeth until the House and Senate adopt enforcement rules. Both chambers traditionally police their own membership and are historically reluctant to challenge an elected official’s qualifications to serve.
Rochester wants to build a new, $65 million recreation center to meet demand for all the people who want to play sports like pickleball and soccer. As MPR’s Catharine Richert reports, the city wants to pay for it by extending its long-standing half-cent sales tax. Doing so would raise $205 million over about 16 years, and help pay for road and housing improvements, too. Otherwise, the city's sales tax expires in 2024. But those plans are on hold — at least until the Legislature gives Rochester permission to move ahead. Like every other city in Minnesota, Rochester can't extend or increase its sales tax without legislative approval — usually a few lines in a massive tax bill — but the Legislature failed to pass one in the last session.
Gov. Tim Walz still wants the Legislature to agree to rebate checks in 2023, but the governor says he’s open to the mechanism used to send out the money. “One of the things is we have to figure out how to craft this correctly because if it's just a state check back to them while the federal government's going to take 17 percent out in taxes we're trying to figure creative ways,” Walz told MPR’s Cathy Wurzer Thursday. “I'm just most concerned that we see tax relief for middle class Minnesotans.” The issue is whether they are income tax or sales tax rebates. During former gov. Jesse Ventura’s administration, the state used sales tax rebates to federal taxes on the money.
Peter Callaghan of MinnPost has a closer look at the prospects for “Walz checks” in the upcoming session: It was not shocking that legislative Republicans, especially those who controlled the Senate, didn’t care for the idea or the name. It was an election year and Republicans were unlikely to let the DFL governor send cash to voters just as they were considering his reelection. There was also some over-confidence at play as Republicans thought they would call all of the shots after the 2022 election and didn’t need to give DFLers any of the glory for tax reductions. A year later and with that election producing different results than Republicans expected, an idea that a previous House GOP leader called “election-year desperation” is now something the new House GOP leader calls a good idea. Because much of the current $17.6 billion surplus is left over from the current budget and isn’t expected to be sustained in the next, Rep. Lisa Demuth, R-Cold Spring, said uses should be one-offs as well. “It’s one-time money, so you have to look at possible one-time rebates to our tax filers,” she said. “It’s a discussion we would have as a caucus.”
And Demuth reacted to Walz’s Thursday comments about Social Security taxes. The governor said on MPR News that he does not support exempting all Social Security income from state taxes and that he would rather keep the tax in place on top earners. Demuth disagreed. "You know, we have a almost $18 billion surplus,” she told MPR’s Dana Ferguson. “And so when we look at eliminating the tax on Social Security, that's something that we campaigned on both Democrats and Republicans. I don't see any reason not to fully eliminate it. People have already paid those taxes. And I think we should consider and I would expect that we would eliminate it fully." There was a bipartisan plan on the table earlier this year that would have eliminated the tax, but the Legislature adjourned without passing it.
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