Minnesota’s Governor Mark Dayton (DFL) has proposed a fall Special Session, suggesting September 9, 2013 as the date. The Governor initially wanted to deal only with disaster relief. However, House Speaker Paul Thissen (DFL-Mpls) and other DFL legislative leaders asked to expand the agenda to include a repeal of the new state sales tax on repairs to farm equipment. The Governor announced his support to repeal the tax at Farm Fest. He has referred to the inclusion of the farm equipment tax which passed during the 2013 regular session, as a mistake. The disaster relief would provide financial assistance for Minnesotans who sustained damage from storms in June.
The DFL holds a majority in the House and Senate and can vote as a block to accomplish their agenda. To complete the Special Session in one day, however, the DFL needs GOP members to suspend the rules. Since the issue of taxes is being addressed and is always controversial, it will be necessary for the minority and the majority to come to an agreement on the issues to be considered. It is likely both parties will come to an agreement on the agenda.
House GOP Leader Kurt Daudt (R-Crown) has called for openness and transparency and has urged the DFL majorities to hold tax committee hearings. Daudt is pushing for a fix on other business to business taxes including the problematic warehouse tax. Dayton agrees that the warehouse tax should be eliminated but said he will deal with that during the regular session in February.
The Minnesota Chamber of Commerce is advocating a repeal of the other business to business taxes enacted last session. Those taxes include labor service charges for repair and maintenance of business equipment (imposed July 1); purchase of telecommunications equipment by providers (imposed on July 1) and warehouse storage and services tax (set to go into effect on April 2014). The Chamber argues that these taxes put Minnesota and Minnesota businesses at a competitive disadvantage. Due to these additional taxes, some companies are reconsidering expansions and making contingency plans to move services out of Minnesota.
State Revenue Lower than Expected
Minnesota Management and Budget announced Minnesota’s revenue collections for July. The state collected $20.7 million less than projected. July represents the first month of the FY2014-2015 biennium. Individual and corporate income tax receipts were less than expected but sales taxes were up. State revenue collections are announced on the tenth of every month by MMB.
Electronic Pulltabs Revenue Less than Projected
Electronic Pulltabs, operated via charitable gambling groups, were supposed to be the key financing element to the new Vikings stadium. The introduction of the electronic machines has not fulfilled the goals. Back in 2012, the per device revenue was projected to be $225 with about 15,000 devices expected to be used across the state. The results thus far are an average of $43.65 per device with about 1,200 active devices.
A back up to the stadium financing was passed in May of 2013. The plan included one-time floor tax revenue which was part of the new cigarette tax. The one-time floor tax revenue generates approximately $24.5 million for the stadium reserve account.