Dear Friends and Neighbors,

I hope you had a good Thanksgiving and are looking forward to the upcoming holidays.  I wanted to send you another update before things get too busy, about some recent news around the capitol. 

This week the State office of Management and Budget (MMB) released its November Economic Forecast for the upcoming year. The report projects a surplus of $2.4 billion for the 2024-2025 budget cycle. However, Minnesota state spending is projected to grow faster than tax revenue, leading to a projected budget deficit of $2.31 billion in the 2026-2027 fiscal year. In addition, Minnesota has $3 billion in its budget reserve – the largest budget reserve balance in state history.  

What does this mean for taxpayers?  It means that In one session Governor Walz and the Democrat controlled legislature took a $19 billion surplus, and with their irresponsible governing, turned it into a $2.3 billion deficit. They spent every dime of the surplus, exploded government spending by 40%, and raised almost $10 billion in taxes. It is beyond reckless. 

You may see media reports about the forecast being a “mixed picture” which is what the Walz Administration is trying to frame it as.  If you had $100,000 in the bank and a balloon payment due in 2 years of $100,000 would you call that a “mixed picture” or a looming financial disaster?

When we look at the engine of our growth, our businesses, the picture is not at all rosy, many of the small ones are shutting down, the medium sized ones are leaving for other states and the big ones are reducing their footprint in Minnesota or already have.  But the appetite of State Government for taxpayer money is so large that the DFL doesn’t want to consider tax cuts. Calling this a “mixed picture” means they are in denial.

I will continue to advocate for reducing government spending and giving back the surplus, before it is all spent, so that Minnesotans can take care of their families and Minnesota businesses can continue to invest, grow and thrive in this state.  

On Thursday, the US Internal Revenue Service announced that the Rebates given out as a result of last year’s tax bill would be taxable on federal returns.

The Minnesota Department of Revenue will be mailing out a Federal Form 1099-MISC to all Rebate payment recipients to use when filing their 2023 federal income tax returns in 2024. Recipients should expect their Form 1099-MISC by the end of January.  The payment is NOT taxable on your Minnesota return.  You can subtract it from your gross income and, in calculating your income for other purposes like Homestead Credit Refund (for Homeowners) and Renter’s Property Tax Refund. 

For general questions and information about the payment, visit The Minnesota Department of Revenue’s  Direct Tax Rebate Payments webpage.

Bulldozers showed up this week to clear the area outside the state office building known as Leif Erickson Park.  The area which used to be a shady spot with benches, shrubs and trees is now gone. The Leif Erickson statue will remain but the space where the trees were will be the site of an expansion of the State Office Building.  This expansion is now projected to cost state taxpayers $729 million and has been the Golden Turkey Award by the Center of the American experiment for wasteful spending.  There are 134 members of the Minnesota House so that’s $5.5 Million per member.  It is true that this is not only a space for members of the Minnesota house, but it also houses the Revisor of Statutes, the Library and some other joint offices of the Legislature.  Nevertheless, it’s a lot of money for a glorified office building. 

Another recent article noted that for the price of the expansion, they could build a skyscraper or two. What about some of that empty commercial office space?  

One of the things I remember about my time in the House was how the public could easily access their legislators in the building.  That access seems to be more difficult in the new design, with a public hearing space that is closed off from the office space. 

The construction will cause some headaches for visitors to the capitol in the next couple of years. The underground tunnels which connect the State Office Building to the Capitol will be closed until 2026 so if you are planning a visit to the Minnesota House during the next legislative session, you will have to go outside, as will members of the house, to access the capitol.

At the end of November, The Senate Bonding Tour made a few stops in Southeastern Minnesota to see infrastructure projects in Wabasha, Zumbrota and Red Wing. The Zumbrota stop (see the picture above) focused the North Zumbro Regional Wastewater project. This is incredibly important to the 5 communities it will serve -- Zumbrota, Pine Island, Goodhue, Wanamingo, and the Prairie Island Indian Community/Elk Run Property.  Each of these communities needed a new wastewater treatment plant. By combining their efforts into one large plant, they will save their taxpayers and the state money.  

Please contact me to share any issues, concerns, or feedback you have to assist me in best representing you.  The best way to reach me is by email at [email protected] or by phone at 651-296-5612. My legislative assistant is Margaret Martin, and her number is 651-296-4264.  

Sincerely,

Steve Drazkowski

Minnesota Senate, District 20, Wabasha, Goodhue, Winona, Olmsted, and Dakota Counties.

2411 Minnesota Senate Building

95 University Avenue W.
Minnesota Senate Bldg.
St. Paul, MN 55155