One of the bills that has been getting significant attention this year at the Capitol is paid family and medical leave. What is this proposal? It would create a new, mandatory 24 week paid leave program for ALL Minnesota employers and employees. The program, as currently presented, would begin taking effect in 2025, with implementation starting yet this year.
What’s in the proposal?
Employers will be charged a 0.7% payroll tax to fund the program. There is no cap on the payroll tax, meaning if costs for the program exceed the amount collected, the state will raise the tax. Employers may “charge back” employees for up to 50% of the payroll tax, but must do so under proportion, contract, or wage requirements.
The 2023 legislative session starts today, January 3, 2023. Greater Mankato Growth will be working vigorously to ensure the voice of our members is heard loud and clear in St. Paul. We will also keep members up to date on key issues and provide information you will need to be an advocate for your business. Be on the lookout for additional blog posts in the coming weeks and months as the session gets underway.
Greater Mankato Growth’s Board of Directors have approved a set of policy priorities. These priorities are the result of a lengthy process that included several opportunities for input: a membership survey, the Advocacy Committee, and hundreds of conversations with members. The priorities are comprised of many of the most important issues that affect our members.
Greater Mankato Growth will focus our advocacy efforts in these areas:
Elections don’t only impact capitol cities, they also impact every local board, council, and commission in our communities. This year was no different. There will be changes in leadership in a number of important local offices, including a new Mayor of North Mankato. These local leaders touch our lives every day as they manage critical infrastructure, teach our kids, and keep our communities safe.
Below is a breakdown of the results of local races.
City of North Mankato
Mayor
Scott Carlson – 50.65% (3,065)
Ben Kaus – 37.21% (2,245)
Kenneth J. DeWitte – 7.87% (475)
Warren Lee Anderson – 3.83% (231)
Mayor-Elect Scott Carlson replaces Mayor Mark Dehen who has served since 2011.
The results of the election in Minnesota were not what was widely expected. The conventional wisdom suggested Republicans would have a big night. In a midterm election with a lackluster Presidential approval rating, rising inflation, and prolonged economic uncertainty, it would seem that history would once again repeat itself. That didn’t happen. Instead, Democrats (DFL) carried voters focused on issues such as reproductive rights, election integrity/democracy, and public safety, especially in and around the Twin Cities suburbs. The graphic below shows this exactly (Graphic 1).
Polls showed a very tight race for Governor and Republican candidates for other statewide offices leading slightly. In the end, Governor Walz won by more than eight points, enough to “carry” the other statewide offices to victory for a clean Democratic sweep of all constitutional offices – Governor/Lieutenant Governor, Attorney General, Secretary of State, and State Auditor.
Graphic 1: DFL candidates continue to increase their share of the suburbs while also driving up votes in Hennepin County that has outpaced Republican gains in greater Minnesota.
We are already into the second half of the 2022 legislative session. Unfortunately there has not been a lot accomplished yet, despite the legislature setting a record for the number of bills introduced with more than 4,700 in the Senate and 4,300 in the House. It seems that legislators have a lot ideas, but have taken very little action. We have passed all the committee deadlines and the House and Senate have started to move on their omnibus bills: taxes, transportation, environment, etc. Not surprisingly, the House and Senate omnibus bills are vastly different on both policy and fiscal impact. Much work will have to be done to come together in conference committee or with leadership.
Budget Surplus
The Senate passed the first omnibus tax bill off the Senate floor in bipartisan fashion. Among other things, it permanently reduces the first tier individual income tax rate from 5.3% to 2.8% and eliminates income tax on social security income. The Senate Republicans touted this as the “largest tax cut ever,” totaling $3.38 billion this biennium and $5 billion in the FY 24/25 biennium.
The legislature is off and running full steam ahead! This the second year of the 2-year (biennial) legislative session. There are several themes that have been consuming the discussion early on: budget surplus, bonding, unemployment insurance trust fund, redistricting, and COVID closures. Here is a brief update on each area.
Budget Surplus
In 2021, the state passed a 2-year budget of $52 billion, a record level of spending. A key part of our budget is revenue, how much the state collects in taxes, fees, federal funds, etc. The state uses a forecasting model to try and make an educated guess of how much money will be collected (and spent) during the biennium. The state then updates their projections throughout the year with periodic “budget forecasts,” which update the revenue and expense projections. In November 2021, the state projected a budget surplus of $7.7 billion. As of Monday February 28th (the “February forecast”), that budget surplus jumped to $9.3 billion. The legislature does not technically need to do anything, they already passed a budget in 2021. However, ideas range from giving it back in the form of rebate checks, reducing taxes, or spending on new or existing programs. Governor Walz has proposed nearly tripling proposed rebate checks (“Walz Checks”) to $500 and $1,000 for qualifying individuals and couples. Senate Republicans have proposed permanently reducing the first tier individual income tax rate from 5.3% to 2.8% and eliminating income tax on social security income. House Speaker Melissa Hortman and DFL leaders have been cautious and suggested putting more in reserves while also providing unspecified support for families who continue to struggle through the pandemic.
The Greater Mankato Growth board of directors recently adopted the 2022 Policy Priorities. A key area of focus at Greater Mankato Growths is “Advocacy of the Marketplace”. As such, GMG adopts a set of policy priorities annually. These priorities represent important issues that we focus on throughout the year. We work with elected officials at all levels of government to ensure that policies are enacted that are pro-business and help our regional economy grow.
These priorities are the result of numerous points of input. We conducted a policy survey in October 2021, hosted the Minnesota Chamber of Commerce in Mankato for a small-group discussion, and our Public Affairs Steering Committee meets monthly with leaders from nearly all industry sectors represented.
In 2022, our policy priorities include the following focus areas:
Economic and Workforce Development
Tax Competitiveness
Strategic Investments
Healthcare
Childcare
Support Partner Organization
To view the full details of our 2022 Policy Priorities, click the image below or visit our Advocacy webpage.
Greater Mankato Growth Blog 