Good morning, and happy Friday. Here’s the Digest.
1. Health care tax becomes focus of debate. The debate over a tax on health care providers in Minnesota took center stage at the Capitol this week, with both sides making their case for what should happen when the 2 percent tax is set to expire next year. But disagreements between Republicans in control of the Senate and Democrats in control of the rest of government could become one of the major sticking points in budget negotiations this session. During a rally at the Capitol on Thursday, DFL Gov. Tim Walz said he will push hard in negotiations with Republicans to keep the tax in place, arguing that without it, thousands of vulnerable Minnesotans will lose coverage. “I am more than willing and understand that I need to work with others when we have differences of opinion,” Walz told the crowd. “I am not willing to compromise people’s health or sacrifice our values for the sake of some fake bipartisanship that doesn’t matter.” But Republicans call the provider tax a “sick tax,” because they say the fees ultimately trickle down to Minnesotans who are paying their medical bills. Senate Majority Leader Paul Gazelka has said continuing the tax is a non-starter for his caucus. A new option emerged Thursday from a bipartisan group of state senators, including two doctors. Scott Jensen, a Republican from Chaska and a family physician who runs his own practice, said their bill recommends a new fee assessed on insurance claims, instead of providers. The proposal is also supported by a state doctors’ association. (MPR News)
2. Number of top earners in state grows. The number of Minnesotans in the highest state income tax bracket rose dramatically between 2016 and 2017, a trend that is expected to fuel a growing tax debate in the State Capitol. Nearly 73,000 Minnesota tax filers qualified for the top bracket in 2017, up from about 66,600 in 2016 — an almost 10 percent jump, according to data provided to the Star Tribune by the Minnesota Department of Revenue. The increase in people in the top bracket sparked fresh sparring Thursday about how taxes affect economic activity and people’s decisions to either move to Minnesota, stay or flee to states with lower taxes. A similar debate is happening in other states, as well as among the 2020 presidential candidates, where several Democrats have proposed raising taxes on the wealthy. President Donald Trump and his Republican allies in Congress passed major tax cut legislation in 2017, arguing that it would encourage business growth and job creation. In Minnesota, Republicans have long argued that the state’s high taxes relative to neighboring and Sun Belt states — especially on high earners — contribute to a flight of wealth out of the state. Democrats say the most recent state data don’t support that view. (Star Tribune)
3. State loses jobs for the first time since 2010. Minnesota lost 8,800 jobs in February, chiefly in construction as cold weather and heavy snow curbed work, the state jobs agency said Thursday. The unemployment rate climbed for the second straight month, rising just a notch to 3.1 percent from 3.0 percent in January. The state’s jobless rate reached a 19-year low of 2.8 percent for four consecutive months in 2018 before starting upward in November. The losses may reverse as good weather arrives and seasonal work emerges in farms and recreational areas this spring. But they come amid broader signs that a decade of growth in Minnesota’s 3-million person job market is slackening. For instance, for the year that ended Feb. 28, Minnesota actually lost jobs, only around 1,300, but it was the first loss over any 12-month period since July 2010. In addition, the U.S., which has been adding around 200,000 jobs a month in the past few years, added just 20,000 in February. (Star Tribune)
4. House votes to change sexual harassment law. The Minnesota House on Thursday advanced a bill that would add protections against sexual harassment in the workplace. On a 113-10 vote, lawmakers approved a change that would add language to the Minnesota Human Rights Act clarifying that harassment does not need to be “severe or pervasive” before it can be deemed actionable in court. The high legal bar has kept cases from being heard and denied justice to people who’ve experienced harassment, supporters said. “Victims have not received their day in court,” Rep. Kelly Moller, DFL-Shoreview, said. “Today we take affirmative action about the #MeToo movement by saying, ‘no more.’” A similar proposal also passed the House in 2018 but never made it to the Senate floor. The proposal came after two lawmakers, a Senate Democrat and a House Republican, were accused of harassment and resigned from their positions. Opponents of the bill said it could cause serious problems for business owners and could make it harder for those accused of harassment to receive due process. (Forum News Service)
5. Judge blocks Wisconsin lame-duck laws. A Dane County judge on Thursday blocked a series of laws that limited the powers of Democratic Gov. Tony Evers and Democratic Attorney General Josh Kaul. Within hours, Evers and Kaul used the decision to try to get Wisconsin out of a multistate lawsuit challenging the Affordable Care Act that their Republican predecessors joined. Until the judge’s ruling, Republican lawmakers were able to prevent them from doing that. The laws were introduced by GOP lawmakers and signed by Gov. Scott Walker after Evers and Kaul won their elections but before they took office. The scope of the laws and the overnight floor session used to pass them drew national attention. Dane County Circuit Judge Richard Niess on Thursday issued a temporary injunction to block the lame-duck laws after he found the Republican-controlled Legislature did not lawfully meet to pass them. Evers called the ruling “a victory” for the Wisconsin Constitution and immediately directed Kaul to withdraw Wisconsin from the Affordable Care Act lawsuit and Kaul quickly filed a motion to do that. (Milwaukee Journal Sentinel)