Republicans in the Minnesota Legislature are marking the start of the state’s budget year by criticizing tax hikes enacted by Democrats.
Republicans say the $2.1 billion in tax hikes will slow the state’s economic recovery. Smokers will pay higher taxes on a pack of cigarettes, the state’s top two percent of earners will pay higher income taxes and some businesses will have to pay sales taxes on some services. Senate Minority Leader David Hann, R-Eden Prairie, says he’s concerned a new fourth tier income tax rate on top earners puts Minnesota out of line with other states.
“We’ve got, with this new tax rate, one of the highest tax rates in the country,” Hann said. “Those things just aren’t good. They’re not good news for job creators. They’re not good for anybody in the state.”
But House Majority Leader Erin Murphy, DFL-St. Paul, says the new funding is good for education, job creation and property tax relief.
“If we looked at our past, when we had a different income tax rate for high earners in Minnesota, Minnesota was thriving,” Murphy said. “I expect to see Minnesota continue to thrive because of the investments that we’re making in education.”
Murphy also discounts the fears that businesses will relocate as a result of their budget. Murphy also says their plan brings structural balance to the state’s budget. Republicans argue that a budget plan enacted during their two years in the Legislature is a better deal for the state.