Friends,

We are now one week closer to wrapping the budget cycle portion of the legislative session.

Most policy and fiscal bills are now being discussed in conference committee and will be coming to the Senate floor for final votes.

Early next week we will be taking up another new bureaucratic expansion and tax on Minnesota citizens, this time for Paid Family Leave.

Last year Republicans had put forward a proposal that was more focused on a business/employee model and worked on the hopes of managing cost and cutting out government overregulation.

The proposed Democrat version that we will be hearing will be creating a new agency, with hundreds of full-time employees, with a brand new government software system, to help manage this new PAYROLL tax.

We have had repeated issues getting an accurate cost of managing this new program going forward, and the current price tag is $1 billion in new government spending to operate this program.

On top of being extremely problematic for small businesses, especially in Greater Minnesota, one must also factor in that the requirement will impact all schools, counties, and cities, those entities may have to increase local taxes so they can absorb their employer costs.

Minnesota finds itself in an interesting situation that despite coming into this year with an $18 billion dollar surplus, we have now effectively spent every last dollar, with a new state budget coming in at $70 billion, up from $52 billion for the years of 22’ and 23’. Hopefully we will be able to navigate all the new spending and programs without succumbing to any major deficits or reactive tax increases.

Sincerely

Steve