Time is running out for Minnesota lawmakers ahead of business tax hike

Calendar has become the biggest opponent working against Minnesota lawmakers who remain at odds over filling the state’s unemployment insurance fund and avoiding a no-deal business tax hike. by Saturday.

The Senate is due to leave town after its session on Thursday, meaning there is little time left for a deal. The issue is one of the most contentious since the start of the legislative session in January. Lawmakers were close to reaching a deal last weekend — even getting an optimistic mention in the state of the state from Gov. Tim Walz — but appear to have backtracked this week.

State law triggers an increase in payroll taxes whenever the unemployment benefit fund falls below a certain level. Quarterly payments — including the higher tax — are due May 2. Lawmakers should pass legislation to disable the switch.

This week, House Democrats passed legislation that includes $2.7 billion to fill the unemployment benefit fund, $1 billion in bonuses for workers on the front lines of the pandemic, and $161 million to extend unemployment benefits to hourly school workers during the summer months.

The provision on the hourly school worker is the last wrinkle in the negotiations. Democrats said it was necessary to close a loophole in the state’s unemployment compensation system.

“It’s really stupid in the state law. It says everyone is entitled to unemployment insurance except for these few people,” House Speaker Melissa told reporters. Hortman, DFL-Brooklyn Park. “Senate Republicans need to join us in getting this done.”

No one is certain that the provision will cost $161 million. House Democrats have said they estimate he will pay $28 million a year in additional benefits. What’s clear is that state taxpayers — not school districts — will pick up the tab, at least initially.

Republicans who control the Senate favor a clean bill focused solely on using $2.7 billion to fill the unemployment fund. This will keep businesses harmless as the state begins to repay federal loans taken out during the COVID-19 pandemic.

Senate leaders criticized their House counterparts for not being willing to agree to their terms earlier in the year, avoiding the drama of delays.

“Two weeks into the session, we passed a bill to fully reload the (unemployment insurance) trust fund with strong bipartisan support,” said Senate Majority Leader Jeremy Miller. , R-Winona, earlier this week. “We have made progress, but we haven’t reached an agreement yet.”

Minnesota Department of Jobs and Economic Development officials estimate that companies owe between $350 million and $400 million in quarterly payments as of April 30. While the size of the tax hike is based on a formula dependent on a company’s use of unemployment benefits, most businesses across the state face a tax hike.

Comments are closed.