Comments on Current Issues
-Taxes and the Economy
According to the Tax Foundation, Minnesota’s state and local tax burden is 8th highest in the U.S. The Foundation also ranks our state as one of the 10 worst for business taxes. With rankings like these, I opposed Governor Dayton and the DFL’s $2.1 Billion increase in 2013 because I believed it would weaken our state’s economic competitiveness and impede productivity and wage increases. I remain opposed to raising taxes on our businesses and citizens. The goal of the 2017 legislature should be to strengthen our state’s economic competitiveness and to ensure that our tax and regulatory climate is conducive to attracting entrepreneurs and growing jobs.
I would support requiring a super-majority, a 60% vote of the legislature, to pass any new or increased income, sales or corporate taxes.
Raising the minimum wage to $12 or $15 would abandon the marketplace mechanisms which dependably set wages based on skill levels, productivity and market demand. For a single state (or city such as St. Paul) to mandate higher wages ignores the reality that businesses and customers can and will go elsewhere. Job flight and lay-offs will result. Many of these jobs are second incomes, not head-of-household income. Such a move will hurt all low-skilled and entry-level workers, especially young people and minorities. It will harm small businesses and create across-the-board inflation in wages and prices of goods and services. If an increased in the minimum wage is to happen, it should come through Congress so that all states operate on a level playing field.
-Reform of the Metropolitan Council
As a suburban representative, I am concerned about the growing power of the Metropolitan Council. The Council, which began as a regional planning agency necessary for coordinating metro area water and waste water and sewer infrastructure, has acquired considerable taxing and regulatory power despite being unelected and accountable only to the governor. In 2014, the Council adopted its Thrive MSP 2040 “guidelines” which are effectively mandates to cities which must be incorporated into their 10-year comprehensive plans and then submitted to the Council. Many suburban elected officials have publicly criticized Thrive 2040 because it omits new roadways and severely restricts single family housing. In addition, transportation and transit in the metro area are under the Council’s jurisdiction and are addressed in the 2040 plan. Because the 2040 plan seeks to reduce the construction of roads and increase the use of transit, the outcome will be increased traffic congestion and commute times. To fund the plan’s expansion of transit, Governor Dayton seeks a ¾-cent increase (atop the current ¼-cent tax) in metro sales tax, a proposal the Republican-led House of Representatives rejected in 2016.
A story of spiking premiums, starkly higher co-pays and fewer choices in coverage is what Minnesotans in the individual health insurance market have experienced since 2013. The story is much the same for Minnesotans employed in small businesses where higher costs of health insurance cannot be spread across a broad population. About 500,000 Minnesotans (10% of the population) are in these two categories.
Even employees in large corporations where health insurance is a benefit are seeing substantially higher premiums and co-pays.
This is not what Americans were promised when the ACA or "ObamaCare" was passed by one vote in the U.S. Senate. When enabling legislation for MNsure, our version of ObamaCare, was passed in 2013 without a single Republican vote, red flags should have gone up. Now, some $400 million taxpayer dollars later, with chronic software problems and technical difficulties still plaguing consumers and counties administering MNsure, the failure is monumental.
The most recent news about MNsure is that health plans (e.g., Blue Cross Blue Shield) are dropping out of the individual market. HealthPartners will no longer be offering plans outside the metro area. Other plans are capping the numbers of enrollees they'll accept to control costs.
In early October, 2016, news reports said insurance premiums will increase 50-67%, among the largest increases in the nation. This is on top of previous hikes of up to 17% and 49% in the past two years. Several constituents I've spoken to say they've been notified their plans are $1,500 per month for a family of two adults before the 2017 increases.
Prior to ACA and MNsure, 93% of all Minnesotans had coverage of one kind or another (now it's 95%). Minnesota was a leader in expanding health coverage. Our two U.S. senators should have fought to save our working system, but they did not.
In spite of a seriously flawed design, Congress passed the ACA in 2010. Mandates became huge cost drivers, and there were no provisions for controlling the system's costs. Not a single Republican member of Congress voted for ObamaCare's recipe of federalizing health care.
In Minnesota, the original projections for MNsure enrollment were wildly inaccurate (from Jonathan Gruber and Bella Gorman, aka the Gruber-Gorman Report). The projection was that by 2016, between 254,000 and 450,000 people would enroll. At the end of the 2015 enrollment, only 60,092 Minnesotans had purchased a plan, and those individuals were the older and sicker portions of the population, thus far more costly to serve. With premium revenue way down and costs are way up, health plans are reeling.
At the legislature, House and Senate Democrats have blocked all Republican-led initiatives to reform MNsure and the broader insurance market. Other than to subsidize it more, they have yet to accept reform proposals. On health care, it's clear the DFL's agenda is single payer government-run and rationed health care, whether or not it is a good thing for Americans' health or wallets.
A looming issue for taxpayers is a recent projection that by 2022, over 1 million people will be on Medicaid in Minnesota, nearly one-in-five. Medicaid is the broad category of health care covering the elderly and the indigent who are unable to provide for their own health care costs.
Does it seem like road construction was everywhere this summer? In the 2016 construction season, there were 246 road projects across the state totaling $936 million dollars. That does not include $700 million in county and city road projects! Our capacity for more projects certainly reached the limit in public patience as well as in actual road engineers, companies and construction workers.
Transportation is a basic state infrastructure priority for Minnesota. We rank 5th in total road miles of all states. A 2015 state budget of $5 billion for transportation was passed by the MN House and MN Senate and signed by the Governor. Proposals for $6-10 billion in new funding did not get resolved.
Funding for transportation comes from a variety of sources: the gas tax currently is 28.5 cents per gallon and is constitutionally dedicated to roads; the motor vehicle sales tax (MVST) is at least 40% dedicated to transit and as much as 60% dedicated to roads per a 2008 amendment to the constitution. Other funds include the federal gas tax and state bonding dollars.
New transportation funding has become a highly debated subject. One proposal is to add a wholesale sales tax on gas. This tax would rise with the rising price of gas -- from 16 cents to 24 cents per gallon. Another proposal is to dedicate to roads the existing sales tax receipts (about $300 million per year) from auto-related purchases such as auto repair, parts and auto body work. This approach, which I support, would dedicate money from the state's General Fund to roads and bridges, an approach which 33 other states use.
-Issues Facing District 38A
1 - Congestion on the freeways in our area has made commuting very frustrating. Solutions such as the MNPass project along I-35W in Blaine and Lino Lakes will relieve some of that congestion and give commuters more alternatives. I support the MnPass project.
2 - Cities in the northern suburbs are relying on groundwater from the acquifer for irrigation and watering lawns. This is not only expensive but it is unnecessarily depleting the groundwater resource which must be available for our drinking water. New methods for re-using surface water for irrigation are efforts I support and have authored legislation to advance. The City of Hugo is developing the first-ever housing development in the state which will use surface water collected in ponds for watering residents’ lawns.
3 - This area of the metro has lower commercial-industrial (C/I) property wealth than many others. As a result, property taxes on residences are higher than in some parts of the metro, and our schools have more difficulty raising local dollars. The Fiscal Disparities program has become essential to all local governments in Anoka County to supplement property tax revenue. More industry in our area would benefit our community.
What is the Primary Role of Government?
At the state level, the primary role of government is one of funding and providing those services which are a “public good”. A public good describes such things as a road, a library, a park – my use of which doesn’t diminish or detract from anyone else’s use. Providing for public safety is a fundamental role of government as is providing a welfare safety net. Like many, I believe government is doing a disservice when it enriches the benefits of the welfare system to a level that discourages work and self-sufficiency.
Much angst over government’s expanding role comes from its funding of projects like football stadiums that benefit a private business and are not a public good. Government intrusion into private industry in the form of subsidies or favorable tax treatments distorts the market and leads to crony capitalism and corruption. City-owned golf courses, for example, operate tax-free resulting in lower fees for golfers but set up unfair competition with privately-owned golf courses which must charge higher fees. In Minnesota, state government subsidizes local governments (cities) through the Local Government Aid program. This program gives out millions in carte blanc funding which in turn subsidizes inefficiency and over-spending by local governments who in turn organize to vociferously appeal to the legislature for more taxpayer subsidies.